All Forum Posts by: Mike Gennaro

Hey BP community,

Are there any satisfied buy and hold mobile home investors out there? Why does this niche seem so uninhabited? 

With $50K cash, we recently purchased and rehabbed 6 mobile homes, five of which are in a park, and 1 is on land. After bringing in a thick skinned property manager, we've got all of the fully rehabbed units rented and are loving the cash flow. Two are still being rehabbed. My lot rent averages $220/month, and the rents are $700.  

Compared to my other investments, (single family, SFR section 8), I do sacrifice long term appreciation with mobile homes, and banks won't even think of financing them. Other than that, if you can feel comfortable in this space, it's pretty lucrative.

Since I've heard so many negative points of view on buy and hold mobile home investing, I would love to meet and hear other opinions to the contrary. Is there anybody out there?

Best,

Mike Gennaro                                                                                                                        

Honest Leasing LLC.

225-931-3111

@Ron Garic , @Damon Armstrong 

Vanessa, 

If you choose the seller financed route, you could potentially continue investing under the bank's stringent debt-to-income radar, so to speak. In our still relatively limited experience, seller financiers are usually looking to get a higher asking price in exchange for the favor of the private loan. My wife and I have obtained three traditional loans and one lease with the option to purchase, resulting in most banks turning us down based on debt to income (non-portfolio lenders). A couple of our cash flowing properties do not yet count towards income because they are not fully seasoned. Meaning, the bank wants to see that a property cash flows for typically one to two years of tax returns before they count it as income.

 Robert Kiyosaki is a big advocate of seller financing, because no one would give him and Kim a loan for years. So he bought up several owner financed properties that offered 0% down, and he cash flowed. I'm sure that many of us will agree that just because you can get a bank loan, it does not mean you should. And private financing can be wise if you are a diligent investor, which it seems like you are:)

*If I would have known then what I know now, I would have used my first loan to land the largest deal that I could have. Then, I would have sought out seller financing from there. But who has the confidence to go really big on their first deal? It's wise to stick your toe in the water first and fail fast in a small way if you're going to fail, right Vanessa?

Best of luck and good question,

Mike

Yes, we've dealt with this before, and yikes! Try to get this issue outside of the owner's hands if possible. If you do allow them to do the "cleaning", be wise and add an addendum to the contract that says they have to pay rent for additional days that they stay to remove junk.

You can put it in the contract to have them remove all of their trash, but in practice it will never happen. 

If the home owner is really a hoarder, removing the junk would trigger a negative psychological response disallowing them from doing so.

In our experience, they home owner stayed an extra week picking through their trash with the help of a dedicated friend. The companion ended up doing any of the actual trash removal, which was very minimal.

We had to ultimately pay a crew to come and pick up the trash. 

Conclusion: This is a serious psychological issue you are dealing with, so set yourself up for success and charge rent or just pay out of pocket for the crew to clean. 

Thank you @Gregory Tregre ! Extremely helpful resource there. I'll follow up in the morning and let you all know how this pans out. I have also gleaned from other research that if you are not getting title immediately, such as in an owner finance agreement, you just draft up and sign a bill of sale, kind of like a purchase agreement.

Thanks again!

@Account Closed 

The lot is .3 acres in a little lake community in the country with camps, 3/2 brick flats, and mobile homes (not in a flood zone). There is water and electric available, but we need to establish service. I'm paying $2400 for a septic system to be installed.

Shoot, sorry I didn't post details:

I am purchasing the from Mississippi and moving it to Louisiana.

Hey BP,

I'm about to hand over the cash on my first mobile home purchase. Aside from myself, the seller and the owner who financed him will be present with the title. What paperwork do I need to execute this transaction? Does a notary have to be present? Any advice is welcome. @John Fedro 

Thanks,

Mike

Update on our mobile home investing mission:

So it's been about two weeks since we listened to that great mobile home podcast with John Fedro. After reading a couple books and scouring the classifieds day and driving for dollars, we've purchased a 10K lot with 1K down, owner financed and are now purchasing a mobile home and having it moved on site. 

@Jay Hinrichs

Do you know the average life of an oil rig or further, an oil town? I have been trying to find that missing piece of the puzzle. North Dakota's Bakken is a relatively new play, right? Are you noticing trends of the workers leaving the town high and dry with no long term economic growth? My exit strategy was to "mobile out" my RV park as the workers begin to thin in 10 years or so or sell the land when it may or may not appreciate, as a town grows around it.

Closer to home, we have the Eagleford Shale Play in Texas. I called around various RV parks in that area to find out what happens at the end of the oil activity, and no one knows yet.

I always remember the ironic antidote of those who got rich in the gold rush, those who sold the shovels. I'm not a get rich quick type, preferring to buy and hold. But even shovels become unnecessary at some point.

I was born in 1982 and don't know much about the history of oil trends and their effects on economies. Can anyone fill me in?

Thank you @Harold Anderson

Water is definitely an issue as well (no pun intended). It would be ideal to find a piece of land within city limits. You are saying that even if we find a rural tract that has well water, it will need to be tested regularly at great expense?

Yikes, I'm beginning to feel more and more naive. Nevertheless, I don't wan't to give up on my idea of providing oil field housing in some form or another.

Please help if you have any better ideas BP community...

There is much to be said about not litigating on principal, or righteous cause to anger. There were several helpful suggestions about settling. I'm sure between us in this forum, we could paper the walls with those who owe us money.

You said it yourself that it is stressful rehabbing out of state and that you are 1500 miles away. Where are your boots on the ground? Do you think you bit off more than you can chew and might need to pick up the phone and settle your differences, that maybe it's not the county clerk's fault he/she seems utterly useless? Your evidence of the contractor's poor work ethic is minimal and circumstantial at best. That the contractor didn't provide you with pictures seems like a stretch of an accusation when you don't have any trusted overseer on location or apparently didn't budget for the plane ride to your work site.

Ultimately, we all understand your frustration with the contractor, but it's to be expected. How well did you vet your contractors if at all? You've still got the power to make this right, and I think you already know your options: pay a lawyer to clean up the mess, pick up the phone and settle, or pay the contractor.