All Forum Posts by: Kevin Campbell

Please find the event on Meetup for further details.

https://www.meetup.com/505-b-c...

Welcome to the 505 B.C!

This is a book club specializing in Real Estate Investing! From time to

time we will add in books about Financial Freedom and other closely

related topics.

It is highly encouraged that you read or have read the current book, but

all are welcome if you have something to add to the discussion.

We will meet in the 3rd. Tuesday of the month, doors open at 5:30,

discussion starts at 6:30. Refreshments available for purchase.

This is very new, please hit the attend button on Meet Up if you are coming.

Let's start off with the biggest real estate book! Even though it's not
really a real estate book, it's the most recommended book on BP!

We need to be precise with our terms. All of these are "Manufactured" homes.

1. Single Wide Mobile Home sitting on blocks. Could be in a park or on own land. Here in New Mexico these are considered personal property.

2. Multiple Section (Double/Triple) Mobile Home sitting on blocks. Could be in a park or on own land. Here in New Mexico these are considered personal property.

3. Multiple Section (Double/Triple) Mobile Home attached to permanent foundation. Usually, the foundation is concrete pillars that the home sits on and is attached. Then it uses traditional mobile home skirting. Almost always on own land, but doesn’t have to be. Here in New Mexico these are converted to “real property”.

4. Modular Homes are a completely different animal. They have a full foundation. Can be a basement or crawl space. They look like a traditional site-built home. The biggest thing with “modular” is they can participate in market appreciation. Here in New Mexico these start out as “real property”.

Hope this helps!

~Kevin

In my experience, 1 mobile home doesn't work. In fact, I started to break even after 4 units! The cash flow is great, percentage wise anyway. But it doesn't take much to wipe out months of cash flow if you only have 1 unit.

Now with 12 units, the occasional problems are only minor bumps in the road!

FYI, only 1 of my rentals are in a park and it cash flow about the same as the other 11 for now. However, those other 11 were purchased on a REC and will start being paid off in the next 2 years. Then they will cash flow like crazy! 

As for appreciation, the good side of no appreciation is that you are not paying for someone else's appreciation when you buy! I've been thinking about starting a thread about MH appreciation, I think I'll go do that now.

~Kevin

If you are interested in used mobile homes, my suggestion would be to find a wholesaler in you area.

Local Meet Ups, Craigslist, Zillow, ect. Basically start looking for homes!

Either you will run into a wholesaler or find as many homes as you need!

~Kevin

One of my mobile homes is in a park (10 total 3 in parks) that requires owner occupancy. Here in New Mexico, mobile homes have a title just like a car. The title is in the buyer's name with me listed as the lien holder. The title is at the escrow company. A copy of the title was used to by the buyer to prove owner occupancy. She was pre-approved by the park before closing. 

Here in New Mexico, the DMV has a process, it's long but not too tough. Don't remember all the details, but it involves them doing a VIN search. If it hasn't been reported stolen, you contact the last registered owner. If you can't contact the registered owner, you then have to post a legal notice in the newspaper. Not sure what happens next.

Check with your state's office.

I've been "lurking" for a while here on BP. Learning while I save up some cash.

Anyway, a deal has presented itself and I would like to know if I should pull the trigger.

Details:

Single wide mobile home on my street. A friend of my girlfriend wants to buy it but conventional financing is not possible because of down payment requirements and it's below the $20k minimum.

Purchase price is $15k.

I would take a loan from my 401(k) for $10.5k at 3.5% and use $4.5k cash to fund the deal.

I would write a note to the buyer for $20k at 7% for 8 years.

No down payment. This has me concerned the most. But she just doesn't have it. No brainer if she could do $5k down.

Her payments to me (escrow) would equal my 401(k) loan. Approx $200.

The term on the 401(k) loan is 56 months.

I would not see any cash flow or profit until then. But she would continue to make payments for another ~3.5 years for a total profit of ~$8k.

Obviously this would be a real contract with recourse but its still loaning money to a friend.

The title would be in her name with me in first position. And she would be responsible for all maintenance, repairs and lot rent.

What do you think?

waiting to build down payment & rehab money. Also getting more time since a foreclosure & bankruptcy. 

Not too worried about timing price. Sounds more like speculating than investing. I'm only going to buy & hold tho. 

If you don't get a match, temporarily stopping contributions to a Roth to help get REI going is ok, in my opinion anyway.

REI will give better return but a much higher hassle factor.

I would suggest a mix for long term. 

~Kevin

I'll try to bring the discussion back to what I think the OP was asking.

I think I'm in the same boat as you. Little money and wanting to break into the REI racket.

I live on a relatively tight budget, loosened a bit after I paid off ALL my debt.

I'm putting in 6% into my 401(k). That gets me the max company match. I love free money!

If there wasn't a match, I would probably wouldn't put in any in right now. Not because of baby boomers or what i think the stock market will do. But because that would allow me to get into REI faster.

The rest is going into a savings account for my first rental early 2017.

Hope this helps,

~Kevin