All Forum Posts by: Mike Gennaro

@Joshua D. ,

I think that the "anti-trailer" sentiment that is written into most local ordinances is lost on many investors who are outside of the mobile home investment sphere. If we keep up our properties and screen our tenants, perhaps some of those stigmas will go away. I wish you luck!

Thanks @Jonathan Cope ,

I think the father in law moment was the hardest part to overcome, haha.

Best,

Mike

After our first tenant eviction, we checked out completely from our real estate dreams-- we quit. Our most courageous moment was starting over.

I remember walking to the door of that rental to post the final notice before eviction, with my father in law, who had warned us sternly that rental properties were nothing but trouble. It was a mortifying tail between the legs moment, but my primary emotion was blame towards the tenant.

After we sued and won, we never saw a dime, but the judge proclaimed that we were right. In hindsight, taking responsibility for our own improper screening was the catalyst for us picking up the pieces and moving forward.

Just today, three years later, we received a call from a real estate agent that was screening a potential tenant. He said the tenant, one of our past tenants, that they were considering had a lien against them. Knowing that it was our troublesome tenant, we said, "Don't rent to them!" 

Will there be other evictions? Yes, but now we know we have the courage and the know how to keep moving forward.

Thanks for your input @Rachel Townsend .  Speaking of turnover, we begun our first eviction of a mobile home tenant today (on my birthday). There has been no serious drama, just a failure to receive payments and loss of communication with the tenants. Our fabulous property manager handled the legalities in court today. It cost us $125, but caused us no stress thus far.

@Derald Everhart 

Hey, I understand your pain about not being able to rent in all parks. I've found that making a personal visit with a park manager can help your case. I showed up nicely and reasonably dressed with a clean truck and business card available to show that I was a serious potential "tenant." To the lot managers, everyone that rents a lot is a tenant. This allowed me to at least get a few words in edge wise with the manager at one particular park. By the end of my quick pitch, I was allowed to rent in his park. The managers are looking out for their interests, which are mainly to look good in the eyes of the park owners.

In my region of Louisiana, I'd take an educated guess that the ratio of rental allowing parks to non-rental allowing parks is about 1 out of 4. 

Question Derald, if lot rents are $600-$700, how much rent can you charge your tenant?! In Louisiana, lot rents are $250-$300, but income levels are lower here as well.

#1. Rehab two more trailers and place tenants by Dec. 1.

#2. Because we have property management in place this year, I would like to take a breather from around December 20th- 25th to enjoy the holidays with family.

#3. Keep all of my buy and hold units rented with quality tenants. I have a rhyme that I say to myself whenever I get anxious, so I'll share it for anyone else out there that needs to stay positive:

"My tenants pay, my tenants stay. All is well with my rentals today," lol. Don't make fun; this has helped me get through a few restless nights.

Thanks @Jon Klaus ,

I'd like to fire a couple questions your way:

What is your purchase price range on your mobiles on land? Are you able to refinance the land once the property is paid off? Can you inform us of the significance of them being permanently attached to the land? How do you find most of your deals?

@Eric F. 

We found our amazing property manager through another investor. We meet our local investor colleagues through our area REIA's and through talking to various people we meet about investing. I use two property managers, one for my Section 8's and one for mobiles. You may need to call around, but most property managers just want to know how much rent you will be receiving so they can figure out how much they will receive.

When we had 6 mobiles on our hands, four vacancies and two existing tenants that were really challenging to collect from, we offered our property manager bonuses to fill vacancies and put the squeeze on existing tenants. She went right to work, and we've never looked back. It was well worth the extra money to incentivize our manager to put in the extra work to get us up and running. 

I mention this to help you nudge any potential property managers to take on your MH portfolio. It will certainly take them extra work, so pay them well. There is so much money to be made that a couple more percentage points awarded for good management won't hurt.

@Brad Richard Craigslist is a legitimate resource and obvious choice for higher income sellers. However, if you were selling your home for $5K or below, would you have the internet in this home or even on your phone in order to list on Craigslist? I'll list my favorite lead sources below and the deals that came from them:

Craigslist: We bought three MH's for $8500 each from an overwhelmed investor.

Park Manager: One MH in bad shape with a decent exterior for $1500. The park is my favorite one, featuring a vibrant community of tenants and owners. This MH needs about $10K of work.

Through my wife, a realtor: For $1000, we bought a beat up 76' trailer on one acre of land. We now co-own the place with the seller's x-wife, who skipped town a few years ago and has never paid taxes on the property. Our attorney advised us to sue her for complete ownership after we've owned the place for three years and paid the property taxes all by ourselves. We rehabbed the unit for around $12K and have a tenant in place paying $700.

Newspaper Ad: We bought a 93' 3/1 in excellent condition for $7500. It was originally listed for $10K. We had to move it for $2500.

So in our case, it has taken nearly $10k to set up each trailer. I think it is quite difficult to find a trailer in decent condition in the place you want it for $5000. This is only because I haven't done it yet.

@John Fedro has done it several times and he has really proved to be a first class source of answers and encouragement as we set up shop. Although he uses a different exit strategy and prefers not to buy and hold, his podcast #75 on BP is still very helpful.

Best,

Mike Gennaro

Thank you all immensely for your knowledge. We're going to go with @Nathaniel 

@Nathaniel Busch 's suggestion after checking with our CPA. 

Best,

Mike Gennaro

Honest Leasing LLC.

My friend and I own a leasing company. He has a 401k that he would like to extract some money from for use in our company. We are new to the legalities of this. Do we need him to roll over into an IRA first? Self directed IRA's are heavily covered in other forum posts which we will access. Even if we get the money out, can we use it in our own company?

Thanks,

Mike Gennaro

Honest Leasing LLC.

@Ron Garic