Update: 3/2 Singlewide Mobile Home In a Park (Bank Owned)

Thought I'd give everyone an update on the mobile home I mentioned in this post - I've been in negotiations with the bank on this one.

So, I got all my numbers together on the fix up work needed to bring this home in marketable condition. And, I presented my offer to the bank. Here's what I came up with:

$1800 - condenser air conditioning unit (none there)
$1325 - carpet, padding and tack stripping (carpet gone in all rooms including hallway)
$776 - skirting (skirting gone)
$783 - front porch to be built on site to park specifications (none there)
$297 - back porch to be built on site to park specifications (none there)

$4981 - total fix up work

(Note: This is why it's important to build a team. With just a quick phone call, I can call up my contractors and they can estimate for me what these items would cost).

In addition, I made it a stipulation that the taxes must be paid and brought current (there were around $500+ in back taxes owed) as well as the lot rent (2 months back lot rent - $1000+).

Along with my offer, I also noted that the home will stay in the park if my offer is accepted.

(Note: Per the bank rep, I was advised my offer had a better chance of being accepted if the home were to stay in the park).

So, how did I come up with my offer?

Well, going into it I already knew the market. I knew a home like this would sell owner finance around the mid 20k-high 20k range. I knew the down payment amount would probably be around $2500 and cash flowing in the $500-$600/month range.

Based on these numbers, I knew the most I could get myself into this (total) would be around 13k. I worked backwards based on the fix up work needed. So, I came up with an offer of 6k.

(Note. When negotiating and making offers, you always want to give yourself some room to negotiate. Most times, I go in with a lower offer than my maximum allowable offer. Then, I expect some countering back. If I can arrive close or at my maximum allowable offer, then I'm able to make the deal work).

When I presented my offer to the bank, I justified my offer to the bank rep. I told the bank rep there's just no way I could go higher with all the things missing that the home needed. The bank rep understood and told me it's actually a decent offer.

Furthermore, I told the rep I'd be willing to up my offer if the bank were able to provide all of the items or some of the items needed. I told the rep my main concern was the missing a/c condenser unit and the front porch, which are very big ticket items. If the bank were able to provide these items, then I'd be willing to up my offer.

Though, when I said this the bank rep responded with a "Uhhh, we don't do that kind of stuff. We're just trying to sell this thing "as-is." But, I was trying to be the good investor so that I could give them options. And, the bank rep told me it was much appreciated as most investors they run into just give them really low ball offers with no justification whatsoever.

In any case, the bank is mulling over my offer on this one. So, we'll see.

(Note: I don't really spend all that much time with the banks. Usually, the homes that I pursue with the banks are only those that are pointed out to my by the park managers in my favorite parks. For this one, the park manager told me about it as the eviction took place 2 months ago - it had not even made the bank's distribution list of homes taken back yet).

I hope this example will help give you a better idea on how I go about negotiating and making offers.

Speaking of negotiating, I've been in negotiations on quite a number of other mobile homes. This time of the year (spring and summer) is one of the best times to find both sellers and buyers - people are moving out as well as moving in.

To give you an idea, here are a couple of other things I'm working on:

3/2 Singlewide In a Park, 16x80



3/4 of an acre mobile home lot with 2 mobile homes





2/2 Singlewide In a Park, 14x76



These are just a couple as there are quite a number of them with the time of the year and all. Though, I will continue with the updates along with the case studies since many have said they have enjoyed reading them.

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!

Investing 101: Real Estate Is A People Business

(Note: Image courtesy of LumaxArt)

"Everyone always wants some new things. Everyone likes new inventions, new technology. People will never be replaced by machines. In the end, life and business are about human connections."

Michael Scott, The Office

With the evolution of technology today, it's very easy to get lost in all the "noise" of the Internet superhighway. Right now, there is a lot of hype out there about social media and its usage regarding platforms such as Twitter, Facebook, MySpace, LinkedIn, etc.

With all the hype and talk about social media, it's very easy to get confused and "lost" in what its true value can bring. Social media is a tool that can help build your business. Notice I said "tool," not substitute.

A lot of people are under the impression that social media is a substitute for doing business - it's not. There is no substitute for good old fashioned networking - human interaction face to face and/or via the telephone.

Sure, you can network with people online and build a great Twitter, Facebook, MySpace, etc. following. However, when it comes down to doing business you have to ask yourself the question - Is this really helping you and your business get to your goals? If it's not, then you have to change gears.

So many times, I get folks telling me they can't find any deals. They tell me they've been looking and looking and can't find any mobile homes for $3,000. They tell me they've been looking in the newspaper, been driving around their area looking in parks and surrounding neighborhoods, online websites, etc. But, for some reason they still can't find a deal.

Well, I'm here to tell you - you won't find a deal advertised in the local paper and/or online. It just doesen't work that way. Deals are made through negotiating - not through advertisements. Probably every single one of my deals, the seller started at full retail price. Let's face it - most people start there because no one wants to get ripped off. It's just human nature.

Where the deals come in through negotiations is really getting to the root of the problem(s) of the seller and getting to know each other by creating win/win situations. When I meet a seller, I have a very casual approach. I do not do any hard selling at all. I let the seller talk. I listen and see what exactly the seller wants to do and why they want to do it. It's that simple.

Ok, so if it's that simple - how come it's so hard for people to make deals? The reason it's hard for people to make deals is because they come across to the sellers like they just don't care. How is this?

Well, most investors come off as "vultures" because they try to do all the talking and tell the seller what they should do - tell the seller what their home is worth and what they can expect them to sell it for. Then they go on and try to scare the seller saying that no one's going to buy their house for that price. This is a big turn off for sellers.

Let's face it - no one likes to be bossed around. If someone pushes, we push back. It's just human nature. This is why it's hard for most investors to make deals - it seems like they just don't care. So, what happens is the few who do make the deals come out the winners because they are the ones who demonstrate to the seller that they do care. And, if someone shows that they care for you - they will in turn care for you back. It's just human nature.

Right now, I'm working with a park - the park manager is basically kicking out all of the investors who bring bad business to the park. What's happening is these investors just let anyone into their mobile homes and don't really take into any consideration of the park and the obligation to pay lot rent.

Their attitude is they really don't care if their buyers and/or tenants don't pay lot rent - all they care about is getting their own payment and/or rent. I was actually in the office hanging out with the manager one day when a tenant came into the office. She told the manager that she just couldn't pay the lot rent and that the investor who owner financed her home told her she doesen't have to pay lot rent as long as she pays the mobile home payment she's ok. The park manager blew up and got really mad.

So, now the park manager is asking these investors to leave her park. They will have the option of either moving their homes (with their buyers and/or tenants) or they will have to sell their homes. (Note: This has been a concern for many people wanting to get into mobile home investing. Yes, I have heard of other investors who have been kicked out of parks and it's a possibility if you bring bad business to the park. For me, I bring good business to the parks and find quality, long term tenants. In fact, the park manager and owners want me to keep doing business in their parks. As long as their lot rents are getting paid, they are happy).

In addition, I'm also working with the park manager for some of the park owned homes as well as some of the bank owned homes in the park. For most parks, they just want their lot rent paid. Doing owner finance mobile home deals is not their forte. So, what happens is they may have to do them because they get stuck with some of these homes and they end up going bad. They would rather work with someone who knows how to fill homes with good quality buyers and/or tenants than have to fill them themselves.

So, you see - it's all about human interaction and creating win/win situations for all. Most investors out there are out to create win/lose situations. Sure, they may be able to snag a deal or two but they won't last for long.

As Seth Godin points out, the only way you can get people to do business with you is to have them talk about you. No amount of advertising and marketing can change the way people see you. If you build your business with an honest reputation of helping people and creating win/win situations, people will spread the word and refer others to you. It's as simple as that.

The reality is most investors put dollars before people. When you put money before anything else, you will lose. You will lose out on deals, long term relationships and you will lose out on business. Money is just short term.

Building relationships and a reputation for being honest and helping people is long term. In the end, business involves people. And, people never go out of business.

I'm going to leave you here with a video from Gary Vaynerchuk that inspired this post.

Happy Investing!

(If you enjoyed this post and would like to read more about negotiating, check out these books. Enjoy!)



Video Link

Top 10 Negotiation Books

In my prior post, I mentioned the importance of learning essential business skills - one very important skill is negotiating.

Most times, when people hear the word "negotiate" it gives them a bad feeling - it makes people feel like someone is taking something from them, creating a win/lose situation.

However, negotiating is nothing like that. To me, negotiating is having the ability to create win/win situations for everyone. Now, I know that maybe we all won't get exactly what we want but we can try to at least come to an agreement that makes all parties feel comfortable.

In order to learn the skill of negotiating, I read and learned from books. Then, I used the techniques from what I learned and used them in real life situations - this is where you really learn the skill of negotiating.

Here's a list of my Top 10 Negotiation Books that have helped me. I hope it will help you too!

1. The Art of the Deal
2. Getting to Yes
3. Getting Past No
4. Negotiate This
5. Secrets of Power Negotiating
6. You Can Negotiate Anything
7. Trump-Style Negotiation
8. The Negotiating Paradox
9. Harvard Business Essentials Guide to Negotiation
10. Negotiating For Dummies

Negotiating and Making Offers

So, I made a few offers this weekend. It's funny as I didn't even think these sellers would even consider my offer. Know what I learned? Most times, the most important thing is not always price but TRUST. People want to work with people they like and know they can TRUST. With my knowledge that I gained from my network, I laid it out there with these sellers this weekend. Told them how it is, what's going to be involved, and gave them options. I played it like I don't really need to buy which is true because last thing I want to be is a motivated buyer. I will only buy at the right price, I don't need to buy. They may need to sell or not sell. It's up to them. But, I can only offer my best price and stick to that price as long as it makes financial sense. Well, guess what? These sellers appreciated my honesty. They actually WANTED to work with me. One seller, I even told him he may be able to get a higher price with someone else than with me. But, he actually accepted my verbal offer. Now, I'm just waiting for him to find a new home to replace the old home with. Wow, I guess reverse psychology really works! In any case, I learned that not everything has to be hard. It's all very simple. The harder I work and more effort I put on a deal, the harder it is. On the other hand, when I put less effort into trying to make a deal work, the easier things get. Now, I've got something to compare to with some of these other sellers calling me. All of a sudden, I'm calling the shots - not the other way around. One thing I've learned being in the business world, you gotta learn to play on your own court and call the shots. Truly, that's how people become successful and make those killer deals we all hear about.