Friday, May 29, 2009

Redrum Realty

Thought I'd post this short video up based on the film since it's real estate related. Enjoy!

"The twins from the Shining quit haunting and seek a future in real estate."

Video Link

Thursday, May 28, 2009

Top 10 Home Repair Books

If you're going to get into mobile home and/or real estate investing, it's very important to know the basics of home repair. There will be times when repairs will need to be made. Even if you decide not to do the repairs yourself and decide to hire a contractor(s), it's important to know home repair basics so you know exactly what's involved for each project. (Note: One thing about contractors, you will always want to get at least 3 opinions for each project. This way, you can get a feel for rates in your area. Also, you can always negotiate whether or not you want to provide materials and just pay for labor, or both. The choice is up to you).

Here's a list of my Top 10 Home Repair Books that have helped me. I hope it will help you, too!

1. The Manual For Manufactured/Mobile Home Repair and Upgrade
2. Energy and Repair Guide For Manufactured Housing
3. Mobile Home Repair: An Inexpensive Metal Roof You Can Install
4. Black & Decker Complete Photo Guide to Home Repair
5. Home Improvement 1-2-3: Expert Advice from The Home Depot
6. The Complete Idiot's Guide to Simple Home Repair
7. Better Homes and Gardens Big Book of Home How-To
8. Home Improvement for Dummies
9. Dare to Repair
10. How to Fix Everything For Dummies

Tuesday, May 26, 2009

Terminology Tuesday - Seller (Owner) Financing

(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:

"Seller financing is a loan provided by the seller of a property to the buyer, to cover part or all of the sale price. This process, also known as owner carry back or owner financing, is used in a variety of situations as a creative financing option. An owner carry back can be used as a vehicle to sell a home if the potential buyer does not qualify for a loan that will cover the full cost of the property.

Example: John and Linda would like to buy a home. However, this time when they visit ABC Bank they are told, due to their high amount of debt, they do not qualify for conventional financing at all. Once again, they go to their realtor who suggests that the owner may be willing to carry back the loan. The owner agrees and finances the couple for $350,000, terms are agreed upon, and the owner starts collecting payments from John and Linda.

If an owner decides they no longer want to collect the payments the owner can sell the note on the house, a process called note buying, to a company that provides such a service. In such cases, the owner will be paid a certain amount of cents on the dollar and get a lump sum instead of collecting payments over the life of the loan. The buyer of the note then assumes control of the deed, and John and Linda will begin paying the bank instead of the owner.

Another way an owner carry back would benefit an owner is, after the sale of the home, s/he would be receiving a steady monthly income. In some cases, owners can avoid paying capital gains tax on the sale of their property by carrying back the loan."

Definition Link

There are many ways to make money investing in mobile homes - this is why I enjoy investing in mobile homes.

Happy investing!

Friday, May 22, 2009

Money As Debt

In order to be a wise investor, it's very important to understand money and how it works. Knowledge is power. In the past, I've talked about the importance of getting personal finances in order. It's very important to learn how to control money and not let money control you. Here's a video that has helped me to understand more about money and how it works. Enjoy!

"Money as Debt' tells in very simple and effective graphic terms what money is and how it is being created."

Part 1

Video Link

Part 2

Video Link

Part 3

Video Link

Part 4

Video Link

Part 5

Video Link

Thursday, May 21, 2009

5 Reasons Why I Enjoy Mobile Home Investing

Many people have asked, "Why invest in mobile homes?" So, I've decided to answer the question here with 5 Reasons Why I Enjoy Mobile Home Investing. Here they are:

1. No Late Night Phone Calls

For all the landlords out there, you may be able to relate. As a landlord, you still have to take care of all the repair issues for your tenants since they are renters. Either you can take care of them or you can hire someone to take care of them for you. Either way, it will require time on your part whether or not you are physically doing the work and/or managing someone to do it for you.

With mobile home investing (if you decide to sell on owner financing), then you are dealing with homeowners - not renters. There's a big difference. Homeowners are responsible for taking care of their home since they have an interest. Renters do not. Most times, since renters do not have an interest in the home they will expect certain repairs to be made which is the responsibility of the landlord. More responsibility = more calls.

2. No Repair Issues

Again, if you are a landlord - you will need to take care of all repair issues for your tenants. With mobile home investing (f you decide to sell on owner financing), you deal with homeowners not renters. Homeowners will be responsible to take care of all the repairs on the home which means more money in your pocket and less time involved.

3. No Middlemen

In most cases, there is less people to deal with when investing in mobile homes. When you are buying a mobile home (in most cases as personal property), you will be dealing directly with the seller in most cases. Rarely have I seen a real estate agent involved unless you are buying the mobile home and the land. Usually, it will be too much money to sell using a real estate agent to sell a mobile home. Also, when you are going to close on the home you usually just deal with your local government authority in your area. Some people have asked whether they need a title company. In most cases, "no" but it also does depend on the comfort level of all parties involved. If you and/or the seller feel more comfortable, you can use a title company to close.

Likewise, there will be less people involved in terms of property management since there's nothing to manage if your dealing with homeowners. (Remember, homeowners are responsible for taking care of the home). Probably the only management you will have to deal with is the park management (if you decide to buy in parks) though usually they will only call you if there's a problem. Less people involved=less stress.

4. Lower Costs

Let's face it - it takes less money to buy a mobile home than a single family home (most of the time). What does this mean? It means lower costs in all areas including closing costs, insurance, taxes, etc. Since you have less money into it, it frees up more of your money to go out and do more deals. More money=more deals.

5. Less Time Involved

This is probably my favorite reason to invest in mobile homes. Since you are dealing with homeowners who are responsible for taking care of the home, it frees up your time to do other things. Most of the time, you are just there to collect payments - that's it. Sure, you may have to deal with the park management (if you are buying in parks) but that's only when issues come up. Once you complete a deal, that's it - no more maintenance issues and/or dealing with calls from renters. Think about it. If you are a homeowner, when was the last time you called your bank for a repair issue? Never. That's not your job - it's the homeowner's job.

Less time involved means freeing up time to go out and do other things like looking for other deals. With mobile home investing, once you've established yourself and have a few deals going then you don't have to work as hard scurrying around looking for other deals. Again, it's all about cash flow. Plus, the cash flow coming in from your current deals will help to fund new deals. More time + more money = more deals. And, more deals=more cash flow=more time to enjoy life and do the things you want to do, not the things you have to do.

So, there you have it 5 Reasons Why I Enjoy Mobile Home Investing.

Happy Investing!

Wednesday, May 20, 2009

Q&A: Mailbag

(Note: I've received many questions from people about mobile home and/or real estate investing. From time to time, I will post the ones I find interesting/relevant. If you have a question, feel free to send it in. Thanks!)

Q: I am ready to start investing in mobile homes. However, I will be relocating out of state in about a year. I am a little skeptical to get started right now because I will have financed homes that will be located out of state after I move. Do you think I should still pursue this right now or wait until I move and start then?

A: Personally, I'm not an advocate of investing out of your area - it just makes things more difficult if problems should come up. Since knowing the market is very important, it may be difficult if you are away and have homes in your present area - the market could change, situations could change in your market. If you're not there, it may cause problems.

If you're just starting out, one thing you can do is learn your market and look for deals for other investors - bird dogging is a good way to start and get the experience without taking all the risk. This way, you'll get some experience. Then, when you move to your new location you'll have the experience to go out and start off (if you choose) on your own.

Tuesday, May 19, 2009

Terminology Tuesday - Lot Rent

(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).

Lot rent is a form of rent paid to the owner of the land where a mobile home sits on. This can be in a mobile home park. Or, on a lot or bigger piece of land. Paying lot rent to the land owner gives the owner of the mobile home the ability to keep the home on the lot.

There are 2 parts - the mobile home and the lot (aka the land). Each can be owned by different owners or can have the same owner. In cases where the mobile home is owned by a different party than the owner of the lot, the mobile home is considered personal property.

If you are purchasing a mobile home and you want to keep it on the lot, it's best to talk to the landowner first to see if it can stay there.

Friday, May 15, 2009

Make Mine Freedom!

With all the turmoil we're having economically and politically in the world, I thought I'd post up this video. This was made in 1948.

"An educational film exhaulting in the democratic, capitalist way of life in America - and warning of the dangers of "isms."

Video Link

Thursday, May 14, 2009

Top 10 Sales Books

Learning how to sell is one of the most important skills to have in business. To me, selling is not only one-sided - it is finding a need and filling it by creating win/win situations. (By the way, if you're also interested in the topic of "negotiation" check out this link).

Let's face it - most people don't like to sell. Whenever I hear this, I always remember the old saying:

"People don't like to be sold. But, they love to buy."

If people don't like to be sold but love to buy, then how do we sell? Simple. Don't.

Again, to me selling is simply finding a need and filling it. So, what you need to do is find a need (i.e. people who need your products and/or services) and fill that need. That's all there is to it.

I've learned the art of selling by simply reading books on the subject and applying what I've learned - it's more of an art than an exact science. At first, it doesen't come easy. But, with a little practice it becomes natural.

Here's a list of my Top 10 Sales Books that have helped me. I hope it will help you too!

1. Selling With Integrity
2. The One Minute Sales Person
3. Selling 101: What Every Successful Sales Professional Needs to Know
4. Little Red Book of Selling
5. Sales Dogs
6. How to Master the Art of Selling
7. The Psychology of Selling
8. Secrets of Power Persuasion
9. Zig Ziglar's Secrets of Closing the Sale
10. Integrity Selling

Wednesday, May 13, 2009

Mobile Home Investing 101: Tip of the Week

(Note: From time to time, I'll post up mobile home investing tips to help with your mobile home investing endeavors).

Central Air Conditioning (A/C) Vs. Window Air Conditioning (A/C) Units

Most of the mobile homes I've encountered (but not all) have all had central a/c units - a big luxury for any mobile homeowner. Though, this may be rare when buying the older used mobile homes (typically 80s and older).

Most of the time, the older mobile homes will have window a/c units instead of central a/c. So, then you are faced with either keeping the old window a/c units or providing a new central a/c unit.

In my experience, it's best to keep the original infrastructure in place. The home may not be equipped to handle new technology such as a new central a/c unit. Plus, this can be very costly. In my area alone, it costs at least $1600 for a new central a/c unit to be replaced and installed. (I recommend comparing repair costs in your area - costs vary from area to area).

If you choose to keep the existing infrastructure in place, you may encounter some resistance from potential buyers. I've had people ask why there is no central a/c unit in the past. How do I handle that question?

Basically, I tell them the window a/c units may actually save them money in energy costs since most times it takes less energy to use them. Then, I explain to them that a central a/c unit may cool other parts of the home that is not being occupied and/or used thus utilizing more money in energy costs. When potential buyers hear this, most times they agree especially in these economical times when every penny counts.

(If you would like to read up more on mobile home repair, I highly recommend these books).

Happy investing!

Tuesday, May 12, 2009

Terminology Tuesday - Personal Property

(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:

"Personal property is a type of property. In the common law systems personal property may also be called chattels or personalty. It is distinguished from real property, or real estate. In the civil law systems personal property is often called movable property or movables - any property that can be moved from one location to another. This term is in distinction with immovable property or immovables, such as land and buildings".

Definition Link

Mobile homes can be classified as either personal property or real property. If the mobile home is not attached to land, it is considered personal property. On the other hand, if the mobile home is attached to land it is considered real property. The definition of "attach" and how a mobile home is seen as "attached to land" may vary from area to area. Check with your local government authority for further clarification.

Friday, May 8, 2009

Mobile Home Repair - Bathroom Trim

Video Link

Thursday, May 7, 2009

Quality Vs. Quantity

I thought I'd address the topic of Quality Vs. Quantity. Recently, I've had some people ask me about the default rate with mobile home investing.

Turns out, there are some people out there who have done some mobile home deals saying that it didn't work out because they had to take back the homes every 3-4 months. Folks, it's all about quality. Not quantity.

Since I've been a landlord and managed my own properties in the past, I have experience in this area. I'd much rather go for someone long term than short term. This is why I screen all my buyers personally. Yes, if I do a deal in a park, the park managers have their own application process. But, I have to do my own due diligence. Here are the 3 top factors I look for when screening buyers:

1. Job History and Income

I verify all jobs past and present. I send an employment verification form for verification for each job. Once I receive the employment verification form back, I call and follow up to clarify any questions I may have. In addition, I also require all prospective buyers to submit current and past paycheck stubs and their W-2 for the past 1-2 years. Then, I take the info and analyze it. Basically, I use the rule of 3rds - the rent/payment required cannot be more than 1/3 of their gross income. If the rent/payment is more than 1/3 of their gross income, they simply cannot afford it. This is nothing new - this is one of the rules lenders usually use.

Now, what if the buyer(s) don't supply this information? Simply put, they cannot move forward with the application. This paperwork is a requirement. If they simply refuse, in most cases they may not be the most qualified candidate.

2. Landlord and Rental History

A park manager once told me the landlord history is one of the first things their park checks - it can say a lot about a person and their ability to pay. I've never forgotten this statement. In most cases, it has rung true. Again, I check all past and present landlord rental history by sending a landlord verification form. Once I receive it back, again I follow up with each landlord to clarify any questions I may have.

Now, what if the buyer(s) do not have any landlord and/or rental history? One such case is if they have been living with family and/or relative(s). In these types of cases, I still have them list them as references and verify the info they write down. Sometimes buyer(s) do pay some money in the form of rent when living with family and/or relatives. This information is all verified. If the information they list check out, it scores points with me as being honest - a very important quality to have.

3. Criminal History

In general, the parks will be sure to check this. I do my own search through the public databases in my area. When potential buyer(s) call in, I always tell them this is one of the most important things that will be checked. In most cases, this deters a lot of people who may have a criminal history.

Apart from these 3 factors and screening potential buyers, I also take the time to meet prospective buyer(s) - I show the homes myself. Why? It gives me a sense of who these people are and I can tell a lot from people just by meeting them.

Let's face it - it's one thing to talk to people on the phone but it's another thing to meet people in person. Sometimes people may not be what they seem to be when you talk to them on the phone - you find these kinds of things out when you meet them in person. To me, it's very important to meet potential buyer(s) in person - this is a long term relationship. I'd much rather take the time now and screen carefully than rushing in (which I find a lot of people do) and filling it fast.

Remember the race with the turtle and the hare? The turtle eventually won.

Happy investing!

Tuesday, May 5, 2009

Terminology Tuesday - Travel Trailer

(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:

"A travel trailer or caravan is a trailer towed behind a road vehicle to provide a place to sleep which is more comfortable and protected than a tent (although there are fold-down tent trailers). It provides the means for people to have their own home on a journey or a vacation (holiday), without relying on a motel or hotel, and enables them to stay in places where none is available.Travel trailers and caravans vary from basic models which may be little more than a tent on wheels to those containing several rooms with all the furniture and furnishings and equipment of a home. They are used principally in North America, Europe, Australia and New Zealand and are rare elsewhere, so this article deals mainly with those continents/countries. In all of these locations it is generally illegal for people to ride in a travel trailer or caravan while it is being towed on a public road."

Definition Link

Monday, May 4, 2009

Clayton Homes' iHouse Debuts in Omaha at Berkshire Hathaway Shareholders Meeting

Yes, it's true - manufactured homes are going green. Literally. Wow, fancy. This just in from the Clayton Homes' iHouse blog:

"It is 5:40 am and we are preparing for the debut of the i-house at the annual Berkshire Hathaway shareholders' meeting. We are featuring the two bedroom i-house with a one bedroom Flex space. It is priced starting at $91/sq ft. With every option possible, it is priced at $139,000 for 1292 sq ft. You can add solar power in increments of 2 kWh for $13,400 and lower energy costs to as low as $1 a day. This has been an exhilarating experience and the entire team at Clayton knows you will like what you see - a great value, in a truly green and energy efficient package."

For more info, check out the video!

Video Link

Friday, May 1, 2009

The Landlord

Thought I'd post this funny short video up from Will Ferrell since it's real estate related. Check it out!

VIdeo Link