Thursday, July 15, 2010

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



Since I receive a lot of requests for more case studies, I thought I'd make another post for "Does It Look a Deal?"

(Note: 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."

This lead came from a park manager in conversation while we were sitting in the office having coffee and donuts. (Guess who brought the coffee and donuts?)

(Note: What has worked for me with park managers is spending a lot of time with a select few I enjoy working with in nice, family style parks. For me, quality is more important that quantity. I don't mind spending a whole morning or afternoon with one park manager - it's building the relationship that counts. I see so many investors out there who try to "network" with everyone only to create mediocre relationships. For me, I've learned it's better to create a few really strong relationships than a lot of mediocre ones. Again, this is just my experience).

In any case, I learned from the park manager that this home was abandoned and taken back by the park. The park wanted to get rid of it.

They were trying to sell the home for $2500. But, the park manager told me I could have it if I just wanted to fix it up and start paying lot rent in a few months.

(Note: Now, some people may get excited about getting "free" homes in this business. But, for me "free" homes really mean expensive homes because most of these homes need a lot of work and take a lot of time to fix up. Though some have tackled these types of opportunities and have been successful at it, just by looking at the outside of the home I knew this was not my type of deal. For me personally, I'd rather spend my time on a home that needs less fix up and conforms to what the types of people I work with (usually families) are looking for (i.e. larger homes) that I know I can stand behind (i.e. support my product, know it's a good home) than something that needs a lot of fix-up work that is smaller and not really sure if I'd live in myself. Again, it's very important for me personally to be able to stand behind my product. If I cannot see myself living in the home (as well as living in the park), then I pass on the deal).

I "thanked" the park manager for letting me know about this opportunity. I told the park manager just from looking at the outside, it just really wasn't my kind of deal. The park manager understood - said someone could make something out of this but the park wasn't willing to give it away to just anyone, it had to be someone they knew and trusted to make it work.

So, as I write this the home is still sitting there in the park. No one really knows it's for sale as there is no "For Sale" sign. Again, most of the deals I work are "inside deals." In my experience, the key to being successful in this business is getting to the deals before everyone knows about them. And, that can only be done by building strong relationships. In the end, it's quality not quantity that counts.

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!

3 comments:

arshad said...

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Scott Costello said...

I couldn't agree more about building strong relationships with the right people and only a few of them. Build them slowly and they will last.

Mobile Home Gurl said...

It's definitely true. I really learned how important this concept is and have really incorporated my "quality over quantity" concept both in my personal as well as business relationships. Thanks Scott for sharing your thoughts and for stopping by!