Don't pay too much, don't sell too cheaply, get to know every park manager, learn your areas eviction laws (tenant/landlord) read Deals on Wheels by Lonnie Scruggs, Be honest and know your craft, just as in any business.
Learn what the homes will sell for in the local market. Aim to sell at 90-95% of that price (too sell quickly) then pay no more than half that price including all Mandatory repairs.
Be paitent the deals are there. Last Friday I bought a 1982 MH for $2700 (needs ~ $800 in fix up+ $300 Lot rent + $200 cushion) I'll have ~$4k in it and will maket at $8.5K if all repairs are done less in as-is. Going rate for this area is $7K-$10K financed.
Owner origionally wanted $8k. with Dec. lot rent due... he was very motivated.
My tip be paitent, let the seller talk, try not to offer a price too soon, be the "pro" - they'll think you know more than you do.
What does constitute good MH investing in the following areas -
1) low rent(how to calculate low rent or it depends on an area)
2) Location
3) MH manufacture, year built
4) surrounding income, low/middle
5) Park manager, and park regulations
I am sooooo not an expert in this. BUT, this is my experience:
Dad died last year. he had a 1959 MH in a park. Not advertised but park didn't rent to anyone under 55. We had the MH sold in a month after credit and park approved the new buyers.
When doing research, I learned that in Lompoc CA, there is not a MHP to be found to move your MH in to. So much so, that the red cross had donations of MH's and had no place to move them so they went up for sale. Buyers were those that had land already.
MH rental is a big thing as it is a military city and homes in CA are WAY to high.
Now, I went to visit my " grandma" ( also in Lompoc CA) every week as a child. She lived in a MHP that had a family section and a senior section. When Dad died, I went to the park, Not a single for sale sign in the windows.
A word of caution, as Reiaddict had a great experience in a Sr. MHP...and I've had a very poor experience in Sr. MHP.
A MH I had in a Sr. MHP for several months just would not sell, to my sorrow...and I ended up letting it go for about what I'd paid, with no profit, after I paid the MHP lot rent for those intervening months.
The morale I drew was that Srs., are, in this area, slow shoppers, don't want to finance and a much poorer market than family MHP buyers.
No more Sr. MHP MHs for me, unless somebody else is paying the rent.
But my dismal experience in the Sr. MHP did lead me to start financing MHs for buyers and this has worked out very well.
So these days I just tell all sellers and MHP mgrs that when they do get a great potential buyer, but that buyer needs buying money, call me and I'll look into loaning the buyer his purchase price.
Last one I did had these facts:
Seller sold for $18,000, $2500 cash down payment and note for $15,500, 12%, $250 M Pmt.
I did a partial purchase of that note, and bought $11,000 of that note ( and the first pmts on it) for $9,000 cash, for a yield to me of much better than 12%.
(get out your fin. calc. and see if you can figure what my yield is)
The seller still owns the back end or "tail" of the note, so is still involved with me on the MH...and if/when my buyer walks, will have to help me re-sell it so as to get her part of that note.
VERY nice feature of just doing the financing like this is I"M not paying any lot rent to the MHP...and believe me the sellers are extremely motivated to help me, and discount the buyers's notes so as to get out from under that lot rent themselves.
When you buy a MH, does a park manager have to run a credit check on you, an investor, or you should negotiate with him not to run?
I have talked to some managers over the weekend. MH in my areas are now mostly double that price in ten of thousands to start. I am trying to focus on singlewide for quick sale.
Do any of you have some success with 55+ park or is it only if an investor is 55+ year to buy?
Yes, MHP Mgr will, if he wants, run credit on any buyer but they don't normally do so for the REI who's not wanting to live there, and if you'll take the time to cultivate and visit with the mgr., frequently they'll help you find a buyer for your MH.
It is really key to doing any deal in somebody else's MHP that you get along with the MHP Mgr and try to get on friendly terms with him/her as they can really hurt you if you don't.
Park manager plays a very crucial role in the business for sure. This is the part I don't like.
Did someone ever offer park managers fee if he helps you find and close deal easily, like pay $100 for every deal? Will this offer upfront have negative effect or should I offer the fee after a few visits so he is more comfortable with me? I guess it's really depends on different personality. But everyone should love to get pay easy money I suppose.
Don't pay too much, don't sell too cheaply, get to know every park manager, learn your areas eviction laws (tenant/landlord) read Deals on Wheels by Lonnie Scruggs, Be honest and know your craft, just as in any business.
Good Luck,
Shawn(OH)
The biggest single mistake I see is the eager new MH buyer pays too much, then maybe is stuck with his mistake and is unable to find "greater fool'.
So buy cheap is single best thing you'll hear.
BUY LOW SELL HI
How much below the market in general an investor need to get: 20-30%?
What are some of the technique experienced investers deploy to locate and find great deals, I know negotiation skills are the big asset?
Learn what the homes will sell for in the local market. Aim to sell at 90-95% of that price (too sell quickly) then pay no more than half that price including all Mandatory repairs.
Be paitent the deals are there. Last Friday I bought a 1982 MH for $2700 (needs ~ $800 in fix up+ $300 Lot rent + $200 cushion) I'll have ~$4k in it and will maket at $8.5K if all repairs are done less in as-is. Going rate for this area is $7K-$10K financed.
Owner origionally wanted $8k. with Dec. lot rent due... he was very motivated.
My tip be paitent, let the seller talk, try not to offer a price too soon, be the "pro" - they'll think you know more than you do.
Do most MH come without land, just lease from the park?
Would it be better to buy with land?
"Do most MHs come without land?"
Yes, most MHs are going to be found in MHPs, and the MHs there are 99% rented to the tenants who own the MHs and pay rent for their spaces each month.
Is it better to buy MHs on land?
Depends on what business you're wanting to be in.
Basic "Lonnie" deal involves no land, just little MH that can be bought low, sold higher.
Hi John,
What does constitute good MH investing in the following areas -
1) low rent(how to calculate low rent or it depends on an area)
2) Location
3) MH manufacture, year built
4) surrounding income, low/middle
5) Park manager, and park regulations
Whoa! You need to get and read & re-read Deals on Wheels before doing anything else.
MH business can be built anywhere on little, older MHs that you buy cheap, sell higher.
Want to get more sophisticated? Sorry, it's too simple a business and the best way to learn is just by doing.
I am sooooo not an expert in this. BUT, this is my experience:
Dad died last year. he had a 1959 MH in a park. Not advertised but park didn't rent to anyone under 55. We had the MH sold in a month after credit and park approved the new buyers.
When doing research, I learned that in Lompoc CA, there is not a MHP to be found to move your MH in to. So much so, that the red cross had donations of MH's and had no place to move them so they went up for sale. Buyers were those that had land already.
MH rental is a big thing as it is a military city and homes in CA are WAY to high.
Now, I went to visit my " grandma" ( also in Lompoc CA) every week as a child. She lived in a MHP that had a family section and a senior section. When Dad died, I went to the park, Not a single for sale sign in the windows.
Lesson I learned?
MH and MHP are HOT in CA
My 2 cents
A word of caution, as Reiaddict had a great experience in a Sr. MHP...and I've had a very poor experience in Sr. MHP.
A MH I had in a Sr. MHP for several months just would not sell, to my sorrow...and I ended up letting it go for about what I'd paid, with no profit, after I paid the MHP lot rent for those intervening months.
The morale I drew was that Srs., are, in this area, slow shoppers, don't want to finance and a much poorer market than family MHP buyers.
No more Sr. MHP MHs for me, unless somebody else is paying the rent.
But my dismal experience in the Sr. MHP did lead me to start financing MHs for buyers and this has worked out very well.
So these days I just tell all sellers and MHP mgrs that when they do get a great potential buyer, but that buyer needs buying money, call me and I'll look into loaning the buyer his purchase price.
Last one I did had these facts:
Seller sold for $18,000, $2500 cash down payment and note for $15,500, 12%, $250 M Pmt.
I did a partial purchase of that note, and bought $11,000 of that note ( and the first pmts on it) for $9,000 cash, for a yield to me of much better than 12%.
(get out your fin. calc. and see if you can figure what my yield is)
The seller still owns the back end or "tail" of the note, so is still involved with me on the MH...and if/when my buyer walks, will have to help me re-sell it so as to get her part of that note.
VERY nice feature of just doing the financing like this is I"M not paying any lot rent to the MHP...and believe me the sellers are extremely motivated to help me, and discount the buyers's notes so as to get out from under that lot rent themselves.
When you buy a MH, does a park manager have to run a credit check on you, an investor, or you should negotiate with him not to run?
I have talked to some managers over the weekend. MH in my areas are now mostly double that price in ten of thousands to start. I am trying to focus on singlewide for quick sale.
Do any of you have some success with 55+ park or is it only if an investor is 55+ year to buy?
Yes, MHP Mgr will, if he wants, run credit on any buyer but they don't normally do so for the REI who's not wanting to live there, and if you'll take the time to cultivate and visit with the mgr., frequently they'll help you find a buyer for your MH.
It is really key to doing any deal in somebody else's MHP that you get along with the MHP Mgr and try to get on friendly terms with him/her as they can really hurt you if you don't.
Park manager plays a very crucial role in the business for sure. This is the part I don't like.
Did someone ever offer park managers fee if he helps you find and close deal easily, like pay $100 for every deal? Will this offer upfront have negative effect or should I offer the fee after a few visits so he is more comfortable with me? I guess it's really depends on different personality. But everyone should love to get pay easy money I suppose.