Thursday, June 10, 2010

Does it Look Like a Deal?: 2/1 Mobile Home In a Park

With the popularity of the "Deal or No Deal" case study series, I thought I'd start a new one here.

While the "Deal or No Deal" case study series focuses on the mechanics of my thought process of evaluating mobile homes from beginning to end, this new case study series, "Does it Look Like a Deal," will focus more on a quick outside evaluation of mobile homes - I use this evaluation to prioritize the leads I pursue.

When I first hear of a home for sale, I evaluate 2 things. First, the park. And, second - the home itself.

If the home is in a park that I'd live in myself and feel comfortable working in, then it passes the first test.

(Note: I've mentioned before I only work in high end parks now due to this situation. For me, it's all a matter of comfort level - I prefer high end parks due to the type of clientele it attracts. Figuring out which parks you choose to work in will depend on your personality and comfort level).

Second, I evaluate the home by doing a drive by.

(Note: This is where me and Lonnie differ. When a lead comes in from the park manager while in the park, Lonnie goes to the home and meets with the seller that day. For me, I like to do a drive by of the outside to see if it's even a home I'm interested in pursuing - I don't buy every home that comes up available, even if it's cheap).

Now, most of the homes I pursue have a certain look - they are usually bigger and newer compared to the traditional "Lonnie" deal. Why is this?

For me, I tend to evaluate these homes more from a homeowner type of mentality and the type of clientele I usually work with. I have to ask myself, "Would I (my clientele included) live in this home?"

My thought process is that if it's not a home that I would live in (see the value in), then why would someone else? There's an old saying that if you don't stand behind your product and believe in it, then it's going to be really hard to sell it to others.

Just by looking at the outside of a home, I can tell whether or not I want to pursue an opportunity. I use the drive by method to prioritize which homes will take priority and use of my time. I don't want to put all my time and effort into a home I really don't think I can sell to the type of clientele I usually work with despite the price - I've been down that road before. For me, cheap doesen't necessarily mean better especially when working in high end parks.

(Note: This is just my experience and preference of doing things. I'm sure some have had different experiences. This is just what has worked for me).

In any case, this lead (see pic above) came in from a park manager while I was at my favorite park (a plus!). The park manager told me the seller had just come in a few days ago to let him know that the home is for sale.

(Note: Usually, when a seller in a park decides to sell their home they must notify the park manager. Having a good relationship with park managers is key to success in this business).

The park manager told me the home is a 2 bedroom, 1 bath older style home. Though, it was originally a 1 bedroom - it was converted to a 2 bedroom. When I heard this, I became leary. Usually, I do not like homes that have had any type of conversion.

Moving along, the park manager went on to tell me the owner was asking $9500 for the home.

Now, I've said this before - the asking price does not matter. It really doesen't because everything can be negotiated.

I see a lot of folks out there who look for deals based on asking price. In most of the deals that I've worked, the seller had started at retail price. It was only through negotiating and really building rapport with the seller (aka earning trust) where I was able to negotiate win/win situations.

To some, $9500 on a home is too much. For me, $9500 on a home would be a great price for the type of home I usually buy. Again, it's very important to learn your market. Without knowing your market, it's going to be really difficult to evaluate opportunities.

In any case, after doing a drive by of the home I knew this was not something I wanted to pursue. It just didn't fit the "look" of the types of homes I buy. So, I told the park manager I'm not really interested in this one.

(Note: Remember, there are so many homes to choose from - it's a buyers market especially in this economy. The sellers have to sell but you don't necessarily have to buy).

After talking again with the park manager, I was made aware of another opportunity. This one was due to a divorce situation. The park manager said it's a bigger home, newer, and something maybe worth looking into. Here's a pic:

After doing a drive by, I knew right away this was a home I wanted to pursue. I am currently waiting for the park manager to set up a meeting as the seller is still finalizing their divorce situation.

(Note: Notice none of these pics have "For Sale By Owner" signs. That's because most deals I've found are insider deals - these sellers just don't want to take the time to have so many people go through their homes. Most times, they'd rather work with the park manager to help them find a buyer - this is where I come in).

I hope this has helped to show you the process I use of evaluating and prioritizing the homes I pursue based on a quick outside drive by evaluation.

When it boils down to it, I only pursue opportunities that I feel comfortable working with. Again, it's all a matter of comfort level and personality.

Happy investing!

p.s. Feel free to leave comments on any post either here and/or my Facebook Page. Comments are always welcome, thanks for reading!


Carey_PA said...

Love this posts Rachel. I find it so interesting to see how your style sometimes is different than perhaps Lonnie's or myself.

When I say style of course you know I mean homes that you choose to purchase.

I have also done straight up typical Lonnie deals. I'm trying to think and I don't think there are any "high end" parks around me lol but hey I could be wrong.

Question for you, I don't know if you remember me telling you about a park I worked in when I first started out in mh's in 1999 and they've since been through different management companies.

Now they're management company and even a management company around a local park to me are the types of companies that actually advertise the homes in the park for sale as FSBO's and the number goes right to the park sometimes.

I'm sure some of them could be park owned homes but what do you think would be the best way going about meeting with a park manager that likes to have some type of say in the sale of a park home?

Am I making any sense here? lol

Quick question....does blogger have plug-ins like wordpress? Shae just asked me to put an awesome plug-in on my blog that let's people get notified when they're comments are responded to. It's super useful (I'm sure you've seen it in action on Steph or Shae's blog.)

Mobile Home Gurl said...

Glad you enjoyed the post, Carey!

Regarding your question, it's going to depend - some parks actually have a separate team to handles sales for their park owned homes, management can be a whole separate department.

The best bet would to actually go into the park offices themselves and talk to the park manager - whoever is managing the park (i.e. dealing with tenants, lot rentals, etc) will be the best person to deal with.

I've actually had good success working with parks who have management companies involved. Many of them have been really open to working with me. Basically, it all boils down to personality. And, finding a good fit for you as well as for the park.

Regarding blogger plug-ins, I'm not really sure. I'm sorry, I'm not much of a techie :( I've basically stuck to the basic settings, I haven't really attempted anything complicated blogwise. Maybe Shae or Steph may have some answers, I think Steph started out with blogger too! :)

Thanks for the note and for stopping by!