Thursday, April 22, 2010

Done Deal: 4/2 Singlewide Mobile Home In a Park

Wow, I finally closed with the buyers who were approved on this deal over the weekend.

With my last update, I had mentioned the buyers had signed the park paperwork along with the deposit for the park and first month's lot rent . So, all that was left to do was my paperwork for the mobile home.

Unfortunately, I had been sick and tax time had come. So, we had to postpone the closing paperwork. Since the buyers had already signed the park paperwork, they agreed and understood they were now responsible for the lot rent.

In any case, we finally closed over the weekend. I just had to push this back until I got better and finished up taxes.

Though, it didn't go as smoothly as I expected (as they never do). When the buyers arrived at the home, the husband had forgot his ID though his wife had hers. Before we had even met, I told them on the phone we needed everyone's IDs for the paperwork for the home.

(Note: The reason I require IDs is because I get all the papework notarized - I do things just like the park. Other fellow mobile home investors have told me that's not necesssary but that's just the way I operate. Since I started out investing in real estate, I'm used to dotting all my "i's" and "crossing all my t's" - it's just the way I am. And, I've transferred this to the mobile home business).

In any case, the buyers had to go back and retrieve the second ID. I agreed to wait at the home for them to return so we could proceed with the paperwork.

(Note: When going out to meet buyers and sellers, you may have some down time. I always recommend bringing a good book to read (something that can help you with your business) to keep you occupied in between meetings - it's a good opportunity to catch up on your reading).

When the buyers had arrived at the home with the second ID, it was already mid-afternoon. My bank (where I usually go to get things notarized) was already closing. (Mind you, this was a Saturday - it's hard to find a notary open past mid-afternoon on Saturdays).

So, I called around various establishments who performed notary services (i.e. Mail Boxes, etc., Kinko's, etc). However, all of them were already closed. At this point, I was pretty upset. I told the buyers if we could not find a notary today (And, no I was not going to use a mobile notary who would be charging $100+ to come out plus $2.00 per page/signature), then we would have to re-schedule for next week.

However, the buyers really wanted to move in over the weekend. They told me they were already packed and wanted to use this time to move in.

(Note: I never allow buyers to move in without doing all the necessary paperwork, submitting the entire deposit amount, and having all the paperwork notarized. I'd rather do everything in one fell swoop, not halfway and/or in bits and pieces. Some investors allow buyers to move in without paying the entire deposit amount and making it up in payments - this is not my style. I'd rather do things my way and have all the requirements met beforehand so the process is complete).

In search of a notary, I dialed so many numbers. With my last ounce of energy, I finally found one that was still open - it was going to close in an hour. So, I hopped in my car and the buyers in theirs and we were off to the notary.

When we got to the notary, we went over all the paperwork and had it all signed and notarized (of course). I was just about to hand over the keys to the buyers when I had noticed the down payment they were going to give me for the home was all in cash. Yes, that's right - cash.

They had an envelope filled with cash and were attempting to count it all out - in 100s (the down payment amount was 2k). Ok, my rule of thumb is that I never take cash - it's there to protect both the buyers and myself so that we have a record of what's been paid. The only form of payment I accept is cashier's check or money order.

I informed the buyers we really needed either a cashier's check or money order - we cannot do the transaction in cash. (I always explain this upfront, though sometimes people can forget as they get caught up in their day to day lives).

The buyers asked if I could just take it since it's already late in the day and told me they weren't concerned about having a paper record - they said they trusted me that I would acknowledge they paid the full amount for the down payment. However, I told them this is not how I operate - we need to have a paper record to show what has been paid so there is no confusion.

The buyers understood. Thank goodness, there was a place up the street that issued money orders and was still open. Again, I hopped in my car and the buyers in their and we drove off (once again) to get a money order issued and to finally complete the transaction.

When we arrived, the buyers returned with a money order for 2k. In turn, I gave them the keys. We parted our separate ways, and yes - the deal was finally closed. What a day!

Again, this is a 4/2 singlewide mobile home in the late 1990s, 17x80, in a 5 star (high end) park. Here are some pics:

Living Room


Master Bath

Outdoor Storage Shed

As always, I feel that all of the deals that I've done have all required hard work and persistence - it's not easy. But, it's definitely worth it. Once the deals are put together and closed, all the hard work and effort pay off.

Going into the deal, I already knew the market - I knew this would sell fast (being a 4/2 in a 5 star park) somewhere in the mid 30k-early 40k range, which it did.

In this case, I spent 16k for the home, received 2k down and it cash flows in the $600/month range for 10 years. Plus, it's in one of my favorite parks (a 5 star park). And, I prefer doing business in high end parks that attract quality buyers - quality is what's important to me.

As Warren Buffett says, "It’s far better to buy a wonderful company at a fair price than a fair company at a wonderful price".

Happy investing!

p.s. If you're just starting out and aren't quite sure where you'd like to begin, here's an article that may help. Thanks for reading!


marilyna said...

Wow. Great deal. That is some amazing cash flow.
It's neat that you're so particular about the details. I'm sure it helps you sleep at night!

Mobile Home Gurl said...

Thanks, Marilyn - glad you enjoyed the post!

Yes, I guess I'm really detailed. Though, it does help me get my sleep, which I value very much these days - thanks for stopping by!

p.s. I got a call from the buyers yesterday. They have 2 more family members (2 separate families) also looking in that park. But, they told me they only want to work with me. Though, it's taken time to gain trust and a reputation, once it's solid - all the hard work pays off bringing in a constant flow of sellers/buyers and making this a fun business!

Anonymous said...

You are so disciplined, doing business by the book. I could learn a lot from you...

Congrats on this deal!

Jon Klaus from BP

Mobile Home Gurl said...

Thanks Jon! It's nice to hear from you, thanks for reading and for stopping by!