Thursday, July 1, 2010

Deal or No Deal: 2/2 Singlewide Mobile Home In a Park

Since I've received a lot of requests for more case studies, I thought I'd make up another post for "Deal or No Deal."

This one is an early 1980s, 14x76, singlewide mobile home in one of the parks (high end) I prefer working in. The sellers had called and found me through a friend living in the park - they said they've heard what I do and asked me to check this one out.

(Note: In the beginning, I had to do a lot of marketing and networking to get the word out on what I do. My style is to be as personable as possible - I don't try to act as a big whig. I guess I follow Lonnie's style of just being a small operation - it's worked for me. Again, everyone will have their own style of doing things).

When I received the call and heard the sellers' story on why they were moving, I had a bad feeling. Basically, they told me they needed to leave because they just couldn't live in the house anymore - there was too much work that needed to be done to fix up the home.

They had been living in it for 5 years. Though, they've had so many issues with it - the central a/c had just broken down and the water heater was going to need to be replaced soon. These were just a couple of things mentioned.

(Note: When I hear the words, "We can't live in this house anymore," it's a major red flag to me. I've had so many cases where I've had these types of calls - most of these types of calls always require the home needing a lot of work and to be fixed up a great deal).

Since the home was in a park (high end) that I prefer, I decided to go ahead and make a trip out to inspect the home. Here's what I found:

Outside of home

Mold and flashing issues near top

(Note: The gutters had not been cleaned out for a very long time. Also, the roof had not been re-sealed since the sellers bought the home 5 years ago. There are signs of water damage on the outside as well as the inside of the home).

Back of home

Side of home

More flashing issues and water damage to masonite hardboard siding

(Note: If you notice lines of water stains (as in the pic below) down the siding of the home, it's indication of flashing and water damage issues. For this home, it was apparent around the entire outside of the house).

From the outside alone, I knew there was going to be a lot of work needed to be done. Since there was a lot of water damage to the outside masonite hardboard siding (due to flashing, roofing and gutter issues), the outside alone would require a lot of work to replace the rotted and damaged areas especially since it was all around the entire home).

Inside of home

Living room



(Note: There were some soft spots in the floor in the hallway - this had never been replaced by the sellers).

Bathroom floor

(Note: Some parts of the existing floor had collapsed. The sellers had started to remove remove and repair some of the areas. However, they did not finish as it required too much work and money).

Underneath bathroom sink

(Note: The baseboard had collapsed due to water damage - this was not repaired).

(Note: There were also signs of water damage in the bathroom above the shower. The picture did not turn out well, so I'm unable to include it here. Though, rings of water stains on the ceiling are usually indications of water damage and issues with the home).

Window a/c unit

(Central a/c had broken down - it was the original to the home).

(Note: While not always a deal killer, I've found it much more difficult to sell homes in high end parks that do not have central heat and air. In most cases, buyers who are looking in high end parks prefer homes with this feature).

After a thorough inspection of the home, I decided to pass on this deal. Why?

For me, it was too big of a risk for the time and money involved to fix up the home. It had a lot of factors going against it to meet my criteria. Not only did the outside of the home need a lot of work, but the inside as well.

(Note: When I asked the sellers the condition of the home when they bought it 5 years ago, they told me it was a major fixer upper. The previous owner had not taken good care of the home either. And, these sellers told me they had to make a decision (due to money issues) to either fix up the outside or the inside of the home - they could not do both. So, they decided to put their money into fixing up the inside of the home. But, they were unable to finish due to money issues).

Also, the fact that it was an older home and a 2/2 without working central heat and air would be a challenge with the type of clientele I tend to work with. In my experience, the types of clientele I tend to deal with prefer homes to be fixed up with central heat and air, as well as a preference for 3/2s.

So, I passed this lead onto a fellow investor who specializes in buying fixer upper type homes and specializing in 2 bedrooms and smaller homes .

Since this fellow investor bought mostly fixer upper type homes and worked with folks looking for smaller homes, I saw it as a better fit. Plus, it would be a better use of my time to pursue other deals that better fit my criteria.

(Note: Some investors think competition is a bad thing. I'm here to say, it's actually a good thing. Everyone has their own criteria on what makes a deal. A deal to me may not be a deal to you. And, vice versa. By knowing other investors in the business, you open yourself up to more opportunities).

Though this was not a deal for me, it was a possible deal for my fellow investor. And, everyone has their own criteria on what makes a deal. For me, this one just didn't fit mine.

(Note: After telling the sellers I had decided to pass on this one, I did refer them to my fellow investor - they appreciated that. Though, they told me they really had wanted to sell to me as they liked and trusted me. They even dropped the price down to $2700 (they started at $5500) but told me they'd be negotiable with me even on that price as they were already packing - they had already found another home in another park. I "thanked them" for their kind words, I told them the fellow investor I referred this to works these kinds of homes all the time and I thought it would be a better fit. The sellers thanked me and appreciated the referral. It's always good to be able to come up with solutions for folks. Not every lead will turn out to be a deal, but I always make it a point to help others and figure out solutions to their problems).

I hope you enjoyed reading this case study of "Deal or No Deal." I hope it will help you to better understand the thought process when evaluating potential mobile home investments.

If you would like to share a story on a home you've recently passed on or pursued (aka "deal or no deal"), I'd definitely be interested in hearing about it!

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...


I love reading your deal or no deal posts. I find it extremely interesting to go through and hear your thought process.

The reason I find it so interesting is this is exactly the type of deal I would have done 10, 11 years ago. Honestly, I'd still do it today.

We have the same style in the sense of we try to be personable and not act like a big shot, but we definitely differ with our buying criteria and I think it really has to do with the fact that you have a lot of high end parks around you.

They aren't as common around here.

Here's an example of a deal I did before:

I read an ad in the paper that said: FREE MOBILE HOME.

I called and they said the first one was there would get it for free. So I hauled my behind over there (as Lonnie says "you can't steal in slow motion.)

This home was in the worst shape ever! I'd say it was about 10 times worse than the one you showed here. There literally was no living room floor. You had to be super careful walking in the living room because the floor was well a big hole! The whole house was just beat to crap.

So I did what any normal person would do and said that "I'd take it!" lol

We did title work and I had an add in the paper shortly after that said something to the effect of:

3/1 mobile. Low down/Low monthly. Fixer.

Got a call from a lady and sold it to her for $3k with $500 down. She had me paid off in about 1.5 yrs. Loved it.

Interesting to hear the differences between investors and areas isn't it?

Keep these coming...I love 'em!

Chris Cliff said...

Wow... I guess I need to get schooled up on the mobile home game, 'cause I would have suggested burning that mobile. Guess I have worked on them enough to know what a pain they really can be.

Mobile Home Gurl said...

(Carey) Glad you enjoyed the post, Carey! Yes, I agree - everyone has a different criteria on what makes a deal. For me, I'd rather spend more on something already fixed up and ready to go with little repairs than something that needs more work - it's definitely different for everyone. I guess I just never really got into the whole rehab thing, though I know others who really enjoy rehabbing a lot. Thanks for sharing your story, it's very interesting to see different perspectives and viewpoints!

p.s. And, yes I've actually been in a home before and stepped on one of those holes in the floor which claimed to be a soft spot (actually it was covered by carpet) that completely went out and my foot went through the entire floor!

(Chris) Hi Chris, Yes everyone has a different perspective and buying criteria on what works for them. Some of these homes that need a lot of work can end up taking up a lot of time and a lot of money. Though, there are some who prefer these types of opportunities and can make it work for them. I guess it's all a matter of personality. Thanks for the note and for stopping by!