(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: Do you know of any lenders who lend on used mobile homes? If so, do you know their criteria and/or qualifications?
A: In this economy, it's really hard to find lenders who lend on used mobile homes. There are some that used to lend but are not in the business of lending anymore with used mobile homes.
Most of the lenders who are in the mobile home business today usually lend on new homes. These are the ones who tend to work with the big mobile home dealers - their credit score requirements are quite high, require higher down payments and in most cases interest rates in the double digits from what I've seen and heard.
If you're looking for a lender for used mobile homes, other options are private money and/or hard money depending on what your needs are. Otherwise, having cash in this economy is the best way to go unless you try to buy with seller financing.
Happy investing!
Showing posts with label mobile home investing question. Show all posts
Showing posts with label mobile home investing question. Show all posts
Thursday, February 25, 2010
Thursday, February 18, 2010
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 really interested in learning about mobile home investing. But, I hear a lot of people saying "Lonnie deals" just do not work because you end up putting too much money into these cheap homes and end up taking back the home over and over again. Do "Lonnie deals" really work?
A: In my opinion, "Lonnie deals" work but not for everyone. Anyone who has been in real estate for awhile has heard the following saying, "You just can't make money in real estate." The people who have said this are people who have not had real estate work for them. On the other hand, there are others who have really been successful in real estate. So, you see there are two sides of the coin.
Honestly, it all boils down to personality and your style. In my own personal experience, being a landlord and dealing with renters just did not work for me. On the other hand, "Lonnie deals" and dealing with homeowners has worked for me. When I go out and look at mobile homes, I ask myself two questions:
1) Would I live in this home?
2) Would I live in this neighborhood?
If the answer to both of these questions is "yes," then I pursue it. On the other hand, if the answer to these questions is "no" then I do not pursue it. When I go into a deal, I look at it first as a homeowner (who I deal with) and then as an investor - not the other way around.
Believe me, I've learned this lesson through experience. I got into a bad deal once where I looked at the home solely as an investor - bad idea. Why? In any business, I believe you have to have a product and/or service that you believe in and that you can stand behind. I don't buy cheap homes in bad neighborhoods - it's just not my style. The only reason I'd possibly look into buying a home in that kind of neighborhood is if I would move it. Otherwise, I just won't go into the deal.
So, you see - "Lonnie deals" work but not for everyone. Here is an article titled "Why Lonnie Deals Don't Work For Me" just to get another perspective. Now, this article sparked much controversy and debate among mobile home investors. Some even got really upset. However, notice the title. It does not say "Why Lonnie Deals Don't Work," it says "Why Lonnie Deals Don't Work For Me." Big difference. In the end, it will be your experience and your experience alone that will determine whether something will work for you.
Happy investing!
p.s. If you would like to learn why "Lonnie deals" work for me, check out this article. Thanks for reading!
Q: I am really interested in learning about mobile home investing. But, I hear a lot of people saying "Lonnie deals" just do not work because you end up putting too much money into these cheap homes and end up taking back the home over and over again. Do "Lonnie deals" really work?
A: In my opinion, "Lonnie deals" work but not for everyone. Anyone who has been in real estate for awhile has heard the following saying, "You just can't make money in real estate." The people who have said this are people who have not had real estate work for them. On the other hand, there are others who have really been successful in real estate. So, you see there are two sides of the coin.
Honestly, it all boils down to personality and your style. In my own personal experience, being a landlord and dealing with renters just did not work for me. On the other hand, "Lonnie deals" and dealing with homeowners has worked for me. When I go out and look at mobile homes, I ask myself two questions:
1) Would I live in this home?
2) Would I live in this neighborhood?
If the answer to both of these questions is "yes," then I pursue it. On the other hand, if the answer to these questions is "no" then I do not pursue it. When I go into a deal, I look at it first as a homeowner (who I deal with) and then as an investor - not the other way around.
Believe me, I've learned this lesson through experience. I got into a bad deal once where I looked at the home solely as an investor - bad idea. Why? In any business, I believe you have to have a product and/or service that you believe in and that you can stand behind. I don't buy cheap homes in bad neighborhoods - it's just not my style. The only reason I'd possibly look into buying a home in that kind of neighborhood is if I would move it. Otherwise, I just won't go into the deal.
So, you see - "Lonnie deals" work but not for everyone. Here is an article titled "Why Lonnie Deals Don't Work For Me" just to get another perspective. Now, this article sparked much controversy and debate among mobile home investors. Some even got really upset. However, notice the title. It does not say "Why Lonnie Deals Don't Work," it says "Why Lonnie Deals Don't Work For Me." Big difference. In the end, it will be your experience and your experience alone that will determine whether something will work for you.
Happy investing!
p.s. If you would like to learn why "Lonnie deals" work for me, check out this article. Thanks for reading!
Wednesday, July 22, 2009
Investing 101: Mobile Homes Vs. Mobile Home Parks
Recently, I've been getting a lot of mail from people who are new to the mobile home business asking me if it's a good idea to buy a mobile home park. They've told me they've heard that mobile home parks are great investments - they have read articles and have gone to real estate forums.
Folks, the only way to learn a business is to experience it first hand. If you're not familiar with the mobile home business, the best way to get involved is to start small - do a deal or two and see if you like it. I say this over and over again. A lot of times, people get excited about the dollars and the returns they hear about when they don't think about the big picture and what's involved.
By doing a small deal, you will learn the basics of mobile home investing. From there, if you enjoy the business and truly want to pursue it in the future then you can go on to do bigger deals. But, if you start by getting into a big deal from the get-go and have no idea how to run a park, manage a park, hire people, buy and sell homes, market knowledge, etc. - then you will find yourself "stuck" and a good investment can easily turn into a bad investment if not properly managed.
I'll give you an example. I knew an investor who owned a few single family homes. He never did a "Lonnie" deal in his life. Though, he was convinced that mobile home parks was one of the best investments. So, he took a mobile home park bootcamp and went through the training. After the training, he bought his first park - a 60 space mobile home park.
After a few months, things were going well until one day he had a problem - a big problem. Some waterlines (including the main waterline) broke in the park. He had it looked at and found out it would cost him $60,000 to get it fixed. Well, he didn't have $60,000 cash laying around in his bank account. So, he ended up refinancing some of this single family homes and pulled out the cash from there. So, a few more months roll by and he gets a problem with his septic tank - this time it would cost him another $25,000. This time he has to take a home equity loan against his own house.
Turns out, this investor had so many issues come up that he ended up selling the park for a loss - it cost him too much time and money since he did not know the mobile home business first hand. When he bought the park, he did not have a team in place and was not prepared for the issues that came up. He also had a hard time filling his park and finding homes since his market knowledge was limited.
Here's what can happen when these infrastructure issues come up:
Video Link
Another investor I knew bought an 80 space park, again after taking a mobile home park bootcamp. The park was half full - this was a turn around project. She had never done a "Lonnie" deal either. Her experience was in rehabbing single family homes. Turns out, the spaces could only fit very small 12 feet by 50 feet homes - they do not make them this small anymore. She tried to find homes that would fit the spaces and was unsuccessful. Instead of re-spacing the lots as she did not want to do this as it would involve an entire infrastructure electrical upgrade, she decided to get mobile homes to fit the spaces custom made. Each home would be $12,000. Ok, problem solved right?
Turns out, these custom made mobile homes were only 1 bedroom. She tried marketing the homes for buyers but it was very difficult. She tried targeting the senior citizen market but soon found they too were picky and/or could not afford her prices as they were on a very fixed income. Like the first investor, she was not prepared for these issues that came up.
These stories are not meant to scare but to inform and increase awareness. It's much better and less risker to start off with a small deal than it is to get stuck with a big deal. If you make mistakes with a small deal, at least they are small mistakes. On the other hand, if you make mistakes with a big deal they can be big - huge and can possibly bankrupt you if you are not prepared.
I'll leave you with a story about The King, the Pawn and the Peon. I hope it will help you to see the importance of starting small and learning through your experiences. It is the small successes that will determine the large ones. And it is the small successes where I have learned the most.
Happy Investing!
Folks, the only way to learn a business is to experience it first hand. If you're not familiar with the mobile home business, the best way to get involved is to start small - do a deal or two and see if you like it. I say this over and over again. A lot of times, people get excited about the dollars and the returns they hear about when they don't think about the big picture and what's involved.
By doing a small deal, you will learn the basics of mobile home investing. From there, if you enjoy the business and truly want to pursue it in the future then you can go on to do bigger deals. But, if you start by getting into a big deal from the get-go and have no idea how to run a park, manage a park, hire people, buy and sell homes, market knowledge, etc. - then you will find yourself "stuck" and a good investment can easily turn into a bad investment if not properly managed.
I'll give you an example. I knew an investor who owned a few single family homes. He never did a "Lonnie" deal in his life. Though, he was convinced that mobile home parks was one of the best investments. So, he took a mobile home park bootcamp and went through the training. After the training, he bought his first park - a 60 space mobile home park.
After a few months, things were going well until one day he had a problem - a big problem. Some waterlines (including the main waterline) broke in the park. He had it looked at and found out it would cost him $60,000 to get it fixed. Well, he didn't have $60,000 cash laying around in his bank account. So, he ended up refinancing some of this single family homes and pulled out the cash from there. So, a few more months roll by and he gets a problem with his septic tank - this time it would cost him another $25,000. This time he has to take a home equity loan against his own house.
Turns out, this investor had so many issues come up that he ended up selling the park for a loss - it cost him too much time and money since he did not know the mobile home business first hand. When he bought the park, he did not have a team in place and was not prepared for the issues that came up. He also had a hard time filling his park and finding homes since his market knowledge was limited.
Here's what can happen when these infrastructure issues come up:
Video Link
Another investor I knew bought an 80 space park, again after taking a mobile home park bootcamp. The park was half full - this was a turn around project. She had never done a "Lonnie" deal either. Her experience was in rehabbing single family homes. Turns out, the spaces could only fit very small 12 feet by 50 feet homes - they do not make them this small anymore. She tried to find homes that would fit the spaces and was unsuccessful. Instead of re-spacing the lots as she did not want to do this as it would involve an entire infrastructure electrical upgrade, she decided to get mobile homes to fit the spaces custom made. Each home would be $12,000. Ok, problem solved right?
Turns out, these custom made mobile homes were only 1 bedroom. She tried marketing the homes for buyers but it was very difficult. She tried targeting the senior citizen market but soon found they too were picky and/or could not afford her prices as they were on a very fixed income. Like the first investor, she was not prepared for these issues that came up.
These stories are not meant to scare but to inform and increase awareness. It's much better and less risker to start off with a small deal than it is to get stuck with a big deal. If you make mistakes with a small deal, at least they are small mistakes. On the other hand, if you make mistakes with a big deal they can be big - huge and can possibly bankrupt you if you are not prepared.
I'll leave you with a story about The King, the Pawn and the Peon. I hope it will help you to see the importance of starting small and learning through your experiences. It is the small successes that will determine the large ones. And it is the small successes where I have learned the most.
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.
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.
Thursday, April 30, 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: Is it necessary to hire an inspector to inspect a mobile home? What are the major areas of a mobile home that should be inspected?
A: Inspecting mobile homes are usually just like inspecting single family homes. I just inspect everything from top to bottom including the roof (is it leaking?), major systems - electric, water, gas, etc., the carpet (look for soft spots), the outside - check the roof outside, the siding (usually wood or aluminum), the skirting, etc.
Usually, I just go in and inspect just like I would be buying as a regular homeowner. I think what types of things I would be concerned with if I were buying as a homeowner. I turn on the lights - make sure they work, run the a/c, run the water, etc.
If you feel more comfortable having an inspector do an inspection, that's an option. For me personally, it's not necessary. If you go this route, you can get a sense for what an inspector looks for and use it as a guide for future inspections.
For more info about how I conduct my own mobile home inspections, feel free to check out my article on inspecting mobile homes.
Q: Is it necessary to hire an inspector to inspect a mobile home? What are the major areas of a mobile home that should be inspected?
A: Inspecting mobile homes are usually just like inspecting single family homes. I just inspect everything from top to bottom including the roof (is it leaking?), major systems - electric, water, gas, etc., the carpet (look for soft spots), the outside - check the roof outside, the siding (usually wood or aluminum), the skirting, etc.
Usually, I just go in and inspect just like I would be buying as a regular homeowner. I think what types of things I would be concerned with if I were buying as a homeowner. I turn on the lights - make sure they work, run the a/c, run the water, etc.
If you feel more comfortable having an inspector do an inspection, that's an option. For me personally, it's not necessary. If you go this route, you can get a sense for what an inspector looks for and use it as a guide for future inspections.
For more info about how I conduct my own mobile home inspections, feel free to check out my article on inspecting mobile homes.
Thursday, April 16, 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: Do I need a dealer license to start investing in mobile homes?
A: In some areas, you may need what is called a "dealer license" if you are planning to buy and sell mobile homes. Check with the local government authority responsible for manufactured housing in your area. They will be able to supply you with the necessary information and guide you through the process.
Q: Do I need a dealer license to start investing in mobile homes?
A: In some areas, you may need what is called a "dealer license" if you are planning to buy and sell mobile homes. Check with the local government authority responsible for manufactured housing in your area. They will be able to supply you with the necessary information and guide you through the process.
Thursday, March 19, 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: Do you buy mobile homes for cash flow or do you flip?
A: Mostly for cash flow. There have been instances where investors want me to wholesale to them - some people don't want to go out and do all the work to go out and look to put the deals together.
Q: Do you buy mobile homes for cash flow or do you flip?
A: Mostly for cash flow. There have been instances where investors want me to wholesale to them - some people don't want to go out and do all the work to go out and look to put the deals together.
Subscribe to:
Posts (Atom)
Posts
