What To Look Out For
I don't like this at all (due to my preconceived prejudices and notions) but my daughter is moving out. she has been looking for a place and I told her in no uncertain terms that I won't help her get a place 'downtown'. so, she has been looking out in the county further and she has found two mobile homes she likes. both are in parks. I've read through the threads this a.m. and I just don't know what questions to ask.
lot going up unreasonably every year appears to be a problem - how can I control that or are you just at the owner's mercy?
if we find a decent one will it hold it's resale value for 2 or 3 years as we'd certainly make improvements rather than let it deteriorate.
when you purchase a mobile home in a park, can you move it whenever you want (naturally subject to whatever your agreement is about the lot rent)
I saw one post about 'stars'. where do I find out what 'star' these parks are rated
I've looked in the Sunday paper and have absolutely no idea how to price one of these things - some go for as much as a 'real' house and others are very cheap - I naturally understand there will be a huge difference in the condition of these
I know the one she likes is $13,000. if we bought that and she lived there for 2 or 3 years, can I then resell it sort of rent to own for the $13,000 (or whatever the going rate would be). I understand the park must approve anyone I'd move in but is there generally some type condition that they may not unreasonably withhold approval?
any idea of where I should start - other than insist she find a nice little condo as I want? I don't even know if I'm asking you guys the right questions. Help, please!!
Question: lot going up unreasonably every year appears to be a problem - how can I control that or are you just at the owner's mercy?
Answer: You can not control what an owner charges for lot rent unless you obtain a long-term lease
Question: if we find a decent one will it hold it's resale value for 2 or 3 years as we'd certainly make improvements rather than let it deteriorate.
Answer: No mobile homes depreciate in value as a whole - sometimes placing on a fixed foundation help control deprecation a little better.
Question: when you purchase a mobile home in a park, can you move it whenever you want (naturally subject to whatever your agreement is about the lot rent)
Answer: Yes, but it is costly.
Question: I saw one post about 'stars'. Where do I find out what 'star' these parks are rated
Answer: Woodall publishes a directory of ratings for RV/Campground facilities, as well as a number of sub-directories and regional guides. www.woodalls.com.
I would suggest this site to help http://www.consumersunion.org/video/mh/mhvideo.html
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thanks.
as a place for my daughter to live, I've got to do a lot more homework & thought.
as an investment, if you can get places for under $5000 it appears to be, perhaps, a lucrative line
Why not buy a small mobile home park? Cap rates on those look pretty good - your daughter should be able to live in one of the MHs and the park would still produce an adequate cash flow. Just thought I'd throw it out there...
Mark.
I will look into that - didn't initially see any on any of the commercial brokers sites in my area - but even if there were it's probably more than I'd want to spend right now and possibly more time than I've got to manage it. I've bought 3 properties since May and have one more to buy so I will definitely look a little further. But, I generally don't like the idea of her living in a trailer park (again my preconceived notions - I should never, ever watch Jerry Springer). she naturally wants to go NOW but we've really got until the middle of January so I'm not allowing her to rush into anything without doing some homework.
again, thanks.
Might ease your mind some to know that NO MHP is going to let just anybody move into their MHP, and will do pretty extensive credit and background check before hand.
Frequently they won't even allow a cosigner, but demand their contracted tenant have OK credit, no evictions, no judgments, decent income, etc.
So just because she wants to live in a MH in a MHP is no reason to think it's going to happen.
I don't have kids, but I would never put them in a mobile home. Right now I have a situation at my park where a girl bought a trailer at 19, lived in it for a couple years, wanted out, and has proceeded to claim to sell it twice. Now it sits abandoned with her grandmother stuck with payments while she has left the state with a guy. Unless you want the trailer yourself, don't buy it. Help her rent something, even if it's downtown. When you're that young, you don't know what you want to do Friday night, much less next year.
esevans - for not having kids you do have a grasp on their nonfunctioning brain cells. I know the brain cells are in there but when they start to work fulltime I haven't figured out yet.
my next question. they are asking $13,900 for the trailer. it has been empty for at least 4/5 months so the former owner is paying lot rent plus her loan. she got married and according to the realtor doesn't want anything, just to walk away. I want to offer $8000 or $9000 for the trailer. if she truly does owe $13,??? is there a way around that? will the lender take less money even if the lady hasn't defaulted yet? this park will only allow owner occupied so she can't rent it out. I was thinking if she and her new husband own a home that I could take a Note from them and put a lien on their new house for the and have them pay me back at a lower interest rate than they pay the lender.
any experienced ideas/thoughts?
Are you familiar with "Lonnie" deals?
Sounds maybe like you're not, and you should get and read L. Scruggs' book "Deals on Wheels" to understand how REI's make money in this MH market.
And once you start looking, you'll find some good, liveable MHs for all kinds of prices, beginning at zero...so don't buy anything until you've looked around a lot.
Then, when the D wants to move on, she could sell on a note for a lot more than she/you paid in cash.
I just ordered it. You're right, I know, as you can see from above, absolutely nothing about mobile homes. $34 will hopefully be a cheap education as it looks like she's set on a mobile home. (lots and lots of parks in the area surrounding the small town she works in)
# 1 ROT (rule of thumb) in any MHP deal is talk to the MHP mgr and find out what they know, what they'll allow, who they'll approved, their rent, their requirements, if they're likeable people, etc.
I've learned the costly way that if I can't get along just great with the mgr, it's better for me to walk/run early and work somewhere else.
By the way, I work with lots of MHPs in my area and know of only one that allows just a few of us Lonnie guys to rent or lease. Most MHPs here don't allow any renting.
Hey Jug2000,
Sometimes it is the way you say things that make an impression on the other person. Also, it is how they interpret what you have said. I bet if you told the park manager, with a friendly smile on your face, that you were so happy that you were buying this mobile and if she might be able to help you with the transaction when you sold the property, that life would just be grand.
Then let her know that you were buying the mobile and then you were selling it on a "contract for deed". Do not mention renting with option to buy. This way the mobile will be owner occupied.
Rick has brought up an important point..
The way to educate the MHP Mgr is to say: "You know, of course,that wnen I sell a home, I can sell with either a Deed or RE contract, and that's done a lot...and that's exactly what I want to do here, so your MHP tenant WILL be the buyer, and not a renter, but won't actually get the title until the REC has been paid in full"
Then show them the sales contract so they'll know they aren't being kidded.
let the t/b pay cash to go towards the purchase say $150 or 1 % now he's a owner and can legally live in the park. you can have him sign a quit claim to the prop. that you will exercise if he doesn't follow thru on the l/o agreement......km
kenmax, I'm new to this mobile home business (so new I haven't jumped in yet - just ordered Deals on Wheels and want to get that and read it before I make an offer) but quit claim what? the title? In my unknowledgeable world I've never heard of such a thing.
When dealing with mobile homes in parks that you do not own you should always check with park manager and or owner to see the terms on rent/lease of lots.
I have several restrictions on my lease agreement in my mobile home park see http://www.thecreativeinvestor.com/ViewTopic36611-21-1.html
There is no reason to get up set with the with park manager and or owner!
It's their property and as a property owner do we not have the right to approve what goes on in our parks.
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