Hiatus

The blog will be on hiatus for the next few weeks. Will be back soon. Stay tuned!

Mobile Home Park Maintenance Inspections

(Note: Inspections and regulations for mobile home parks will vary and depend on your local area laws. Check with your local government housing authority with any questions regarding inspections and local regualations).

Very informative video on mobile home park maintenance inspections. For those interested in working in and/or buying a mobile home park, it definitely has some good information. Check it out!

(p.s. If you're interested in reading more about the pros and cons of buying a mobile home park, check out this article).

"This video is designed to assist mobilehome park residents and owners prepare for a Mobilehome Park Maintenance Inspection (MPM) and points out common violations discovered."



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Investing 101: Learning the Market

By far, knowing the market is the most important key to success in investing in mobile homes. If you do not know your market, you will not be able to find a good deal. Why?

It's simple. If you do not know your market, you will not be able to see a deal if it comes across your desk because you do not know the values and prices of what people are willing to pay for that particular home in that particular area. Not knowing the market is dangerous and can lead to bad deals and/or missed opportunities.

So many times, I get folks telling me they can't find any mobile homes for $3,000. They tell me they've been looking in the newspaper, been driving around their area looking in parks and surrounding neighborhoods, online websites, etc. But, for some reason they still can't find a deal.

The reason they can't find a deal is because they do not know their market. How do I know this?

As soon as I hear they are looking for a mobile home for $3,000, I know they are not familiar with their market. If you knew the market, you would be able to spot that there may be different ways and different price points to make things work.

For example, what if a lead came across your desk for a mobile home and the seller wanted $10,000? Well, if you are looking for mobile homes for $3,000 you might just pass on that lead. Then, someone like me (who is knowledgeable with the market) knows that a $10,000 home in that area could sell for $25,000 owner financed. Or, I may have a cash buyer who is looking to spend $15,000 for a mobile home to put on their land.

So, you see the person looking for $3,000 mobile homes lost out. If that person knew the market and the demands of the market, they may have been able to put together a deal. Instead, it passed them by.

This is one of the reasons why I believe a lot of folks tell me they can't find any deals. They just do not take the time to learn the market.

In my experience, I find a lot of people just starting out are very impatient. They want to find a "deal" right away. They rush out looking for mobile homes at a certain price point, say $3,000, and spend all their time and effort doing this. Then, they say that they can't find any deals and say mobile home investing does not work.

I'm going to be honest with you, this business takes time. Success does not happen overnight. But, it can happen with enough persistance and belief that you can achieve your goals.

When I first started out, it took me 6 months to learn my market. Then, it was another 2 months until I did my first deal. In total, it took me 8 months to learn my market and accomplish my first deal.

To a lot of people, that seems like a long time. But, it paid off because I know my market very well now. The time I took to learn it has made me better aware of the types of deals I can put together based on the demands of the market.

If you are interested in investing in mobile homes, take the time to learn your market. Do not be impatient. It's an investment in you and your future.

By learning your market, you will obtain the knowledge to help you spot a deal. Kiyosaki once said, "You do not see with your eyes, you see with your mind."

If you have the knowledge in your mind (by knowing your market), that knowledge is power. And, the power of knowledge will lead to your success.

I'm going to leave you here with a video from John C. Maxwell that inspired this post.

Happy Investing!



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Terminology Tuesday - Cinder Block

(A stack of rectangular concrete blocks). Source: Wikipedia


(Note: I think it's important to know the terminology and words used when learning any new business including mobile home investing. I came up with 'Terminology Tuesday' as a day to go over the terminology used in the mobile home business. It's important to know the terminology when talking to people in the business so you're all on the same page).

As defined in Wikipedia:

"Cinder block may refer to:

In the United States, a concrete masonry unit (CMU) — also called concrete block, cement block or foundation block — is a large rectangular brick used in construction. Concrete blocks are made from cast concrete, i.e. Portland cement and aggregate, usually sand and fine gravel for high-density blocks.

Sizes and Structure

Concrete blocks may be produced with hollow centres to reduce weight or improve insulation. The use of blockwork allows structures to be built in the traditional masonry style with layers (or courses) of overlapping blocks. Blocks come in many sizes. In the US, the most common size is 8 in × 8 in × 16 in (20 cm × 20 cm × 41 cm); the actual size is usually about 3/8 in (1 cm) smaller to allow for mortar joints."

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Cinder blocks (aka concrete blocks) are used to support a mobile home. Concrete blocks are placed underneath a mobile home for support.

When moving a mobile home, the mobile home mover will attempt to remove the concrete blocks from underneath the home to prepare for the move. Once the mobile home has been transported to its new location, the concrete blocks will need to be placed underneath the mobile home again for support.

One thing you want to be sure when negotiating a move with a mobile home mover, is to see if the price quoted includes removing and replacing the concrete blocks. Some mobile home movers will only quote you a price to move a home, but may not include the removing and replacing of the concrete blocks for the move and the new location of the mobile home once transported.

Here's a video showing a mobile home move in preparation. In the video, you'll see the concrete blocks being removed from underneath the mobile home to get ready for the move. Check it out!



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The Realities of Real Estate

With the changing market of real estate, I thought I'd post up this very entertaining yet informative video on how different people view the value of real estate. This is definitely worth a watch. Enjoy!

"Everyone in the real estate transaction sees the home differently."



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Investing 101: Finding Buyers

I thought I'd address the age old question a lot of folks have been asking me lately, "How do I find buyers?"

If you are investing in mobile homes and plan to buy and hold the paper, the question is not, "How do you find buyers," but "How do you find the right buyers?" There's a big difference. Why, you ask?

The difference is that if you find the right buyers, you are working with people who are in it for the long haul. You are working with people who really do want an affordable place to live and call their own. By having a place to call their own, they will take care of it because it is theirs. Why would they ruin something that they own? You are working with homeowners.

Real homeowners are people who love their home so much that they are willing to do anything to save it. If something happens to them financially, they will do all they can to either try to work with their lender and/or get another source of income to help pay for their home. The mindset is that they do not want to lose their home.

On the other hand, if you are just out there to fill your homes and find buyers just for the sake of it - you are not working with people who are in it for the long term. You are working with people who may not really want a place to call their own. Actually, they may be running away from someone or something, and may just need a place temporarily.

They may tell you they really need a place and may even suggest they want a place to call their own. However, in reality they just need shelter for the time being. Are they looking for a long term situation? Maybe. Maybe not. And, that "maybe not" can be the start of a headache for you.

For example, I had a buyer who applied recently. Basically, he told me he really needs a place to call his own and wants to get into something asap. He told me he's living with relatives, going month to month right now. Told me that he's got a good job - been working at the same job for 10 years. But, his credit is not so good.

Ok. So, I wonder if he's got such a great job then why is his credit shot? Why has he had trouble paying his bills to make his credit not so good? I wonder.

So, he applied for the home - filled out the application and submitted all the required paperwork. The park did a credit check on this individual and yes, his credit was not so good. He had a very low credit score.

From the credit report, what I found out was that this potential buyer was 90 days past due on a home mortgage. He failed to mention this to me. In turn, the park manager called him up and told him what we found. It all came out over the phone.

The potential buyer told the park manager that he was currently in default for the home that him and his wife own - they are in the process of getting divorced. He told the park manager that he needs a place asap as the bank is going to be foreclosing on them soon and he's afraid he may be locked out of his house.

So, the park manager asks him straight out, "Are you planning to walk away from the home?" The potential buyer says "yes."

That's all I needed to know to make my decision. This was not someone I wanted to work with. Why? If this person walks away from an obligation, especially his home, what makes me think he won't do the same thing to me? Enough said.

So many times, I hear investors say how they just need to find a buyer(s) for their homes and just want to get them filled. They tell me they don't care and as long as they are getting paid, they're happy. Then, they tell me it's ok because if the buyer(s) defaults, then they can go ahead and take back the home and do it all over again. Simple as that, right? Not in reality.

In real life, if someone defaults and you put the wrong buyer in there with the wrong mentality (by wrong mentality, I mean someone who is not willing to cooperate and/or work with you), it could turn out to be your worst nightmare. And, by nightmare I mean those nightmares that haunt you for the rest of your life.

Have you ever heard the saying, "It's better to have a vacant house than it is to have a problem tenant?"

According to Murphy's Law, "Anything that can go wrong will go wrong." So, it's better to do things right the first time - find a buyer(s) who will take care of the home and really wants a place to call their own.

This is a long term investment - your investment. If you gamble by putting the wrong buyer(s) in the home, you are putting your investment at risk as well as your sanity. It's better to be safe than sorry.

I'm going to leave you here with a video from John C. Maxwell that inspired this post.

Happy Investing!



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Terminology Tuesday - Polybutylene Pipe (Aka "Grey Pipe")

(Note: I think it's important to know the terminology and words used when learning any new business including mobile home investing. I came up with 'Terminology Tuesday' as a day to go over the terminology used in the mobile home business. It's important to know the terminology when talking to people in the business so you're all on the same page).

As defined in Wikipedia:

"Polybutylene is a thermoplastic Polyolefin. It is created by polymerizing butylene. It is a semi-crystalline thermoplastic, and is also known as polybutene-1. It should not be confused with polybutene, a low molecular weight oligomer with a different repeat unit.

Controversy

The suitability of polybutylene for use in plumbing is controversial. Polybutylene plumbing was used in 6 to 10 million homes built in the United States from 1970 to the mid-1990s. Problems with leaks led to a class action lawsuit, Cox vs. Shell Oil, that was settled for one billion dollars. Polybutylene plumbing is still widely used in Europe and Asia.

The material oxidised when used in hot water systems, developing longitudinal cracks which eventually punctured the walls leading to floods and damage to properties. Many acetal resin fittings also cracked, a problem caused by chlorine attack. Even the low concentration (ppm) of chlorine used in most potable water supplies for purification was enough to initiate cracking."

Definition Link

Polybutylene pipe is usually referred to as "grey pipe" because it is grey in color. The majority of mobile homes built before the year 2000 will usually tend to have it.

In my experience, most sellers I have dealt with have taken out the old grey pipe and replaced it with PVC pipe - usually white in color. However, there will be cases where "grey pipe" still exists in the mobile home.

When you go to inspect a mobile home, be sure to look under the sink - see what kind of piping they have for each room with a water supply. Run the water from the sink and test it out. Look under the sink to see if there is any leaking.

Be on the lookout for a bucket under the sink near the piping - this will signal you that there has been prior leaking. If you see "grey pipe," chances are there will be cracking and/or future cracking down the road. These are issues that will need to be addressed in negotiations.

Happy Investing!

(If you enjoyed this post and would like to read more about mobile home repair, check out these books. Enjoy!)