Terminology Tuesday - Carport

(Note: I think it's important to know the terminology and words used when learning any new business including mobile home investing. I came up with 'Terminology Tuesday' as a way to go over the terminology used in the mobile home business. It's important to know the terminology when talking to people in the business so you're all on the same page).



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As defined in Wikipedia:

"A carport is a covered structure used to offer limited protection to vehicles, primarily cars, from the elements. The structure can either be free standing or attached to a wall. Unlike most structures a carport does not have four walls, and usually has one or two. Carports offer less protection than garages but allow for more ventilation."

Source Definition Link

Most times, carports can be found in more high end parks. Typically, carports found in the parks are made of metal material and cost quite a bit of money - many I've heard cost around $1000 and up. Usually, it will be the homeowner (not the park) who will foot the bill and pay for their own carport (if they desire one).

Here's an example of a typical carport from The Home Depot:



(Note: Most mobile home parks will have rules and specifications on what they allow/don't allow. If you find yourself working in a park that allows car ports, make sure you know what the specifications are before you buy (not after) just in case there may be a specification and/or conflict issue).

When talking and negotiating with sellers, I've found some have tried to up sell the fact that they have a carport (if they have one) attempting to add value to the home and justifying a higher price.

However, in my experience it's usually the mobile home itself (as well as the park) that give value in the eyes of buyers. Usually, something like a carport (or a shed) would just be something extra but would not be the main factor in determining the ultimate value of the home. In most cases, it's not going to make or break a deal - it's just an extra bonus.

My general rule of thumb:

Look around at the other homes in the park. As long as the home I'm looking at blends in (with or without a carport), it's decent. Same thing goes for a shed and/or an awning. As long as the home blends in with the rest of the neighborhood, it's fine in my book.

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!

Movie Pick: Duplex

Since it's Friday, I thought I'd keep it light and share with everyone another funny and entertaining real estate related movie, "Duplex."

Here's a scene from my favorite part of the movie:



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Enjoy!

p.s. If you've joined my Facebook Page already, I just wanted to say "thanks" for all your support. If you know anyone else who may be interested in learning about mobile home investing, feel free to send them over. Thanks again!



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Done Deal: 4/2 Singlewide Mobile Home In a Park

Since I've received a lot of requests for more case studies, I thought I'd make a post on another one I closed on recently.

(Note: This mobile home is very similar to this deal with the same title. The only difference is that it's a few years older. But, it does have the same specs).

This one was referred to me by the park manager in one of my favorite parks.

(Note: When first starting out, you'll find there are parks you like and parks you don't like. It's all a matter of personality and your comfort level. For me, I prefer high end parks due to this experience - it's just my comfort level. I enjoy working in high end parks because of the clientele - I find it attracts the types of people I feel comfortable working with. Again, it's all a matter of personality and what works for you).

The park manager told me the seller had been trying to sell this one for 2 months. I had just found out about the deal as I had returned from a trip. So, it was already 2 months into the sales process when I started working on it.

So, I decided to check it out and met up with the seller. On my first visit, I learned the seller had already moved out of the home - it was vacant. The seller had bought a new home out on land about 2 months ago. For two months, the home had been vacant.

When I went around and inspected the home, I found it matched my buying criteria. Usually, I will only take on homes that have cosmetic issues and not much fix up work - no major rehabs for me. As long as all the major systems are in working order and the structure is solid, I'll take it on.

If there are issues with the roof (i.e. major ceiling leaks) or with the major systems in the home - it's too much for my criteria. I look for homes that don't need much work that don't take too much time to fix up.

(Note: Since I work in high end parks, the lot rent fees are higher than low end parks and can add up. This is why I need something in pretty much move in condition so I can get it on the market and get it sold fast).

Looking through the home, it just looked like it needed a major cleaning and a bit of touch up work. In high end parks, most buyers look for quality - not cheapness. Especially in this economy, it truly is a buyers market.

After looking around the home, I asked the seller how things were going with the sales process. He told me he had a few buyers go through the home. There was one family in particular who was really interested.

Though, he told me he wasn't sure if they had the funds to buy the home. They had asked him if he was willing to owner finance to them. Though, the seller told me this was not an option for him because he wanted to cash out and not deal with this home anymore.

If he were to seller finance, then he would still be tied to the property - he wanted to cut off all ties. Plus, the seller told me since he lived further out now he didn't want to deal with this home and the issues that would come up if the buyers didn't pay and he had to take the home back.

After talking for a bit, the seller asked me what I thought. He told me the park manager told him that I may be able to help him out.

(Note: Since I've been in the business for awhile and have gained a good reputation, it's the park managers that are my cheerleaders - they are the ones selling and promoting me. Most times, I end up being more of a consultant to sellers than anything. When meeting with sellers, I don't try to buy the home out right unless I see it as a good fit - it must be a win/win situation for both me and the seller. The deal must match the seller's needs as well as mine).

I told him there are a couple of problems here - the home needs to be properly staged. First, the condition of the home. I told him the home really needs to be staged well - it needed a good cleaning and a bit of touch up work. The floors, walls, ceilings - they were all dirty.

In order for this home to sell and attract the right kind of buyers, I told him he would need to really give the carpet a good cleaning - there were patches of stains throughout. I suggested a home cleaner if he didn't want to spend the money for a professional carpet cleaning company.

Then, I told him it would really need to be cleaned inside and out. I highly suggested using a professional cleaning company if he didn't want to do the work. I also suggested he may want to re-paint some of the areas of the home as it needed a bit of touch up.

After going over the inside of the home, I talked about the outside. I told him he would need to sweep the porch and do a bit of landscaping outside. Maybe he wanted to re-mulch around the house and plant some nice flowers. I reminded him the outside is the most important as it's the first thing people see when they drive by. If the home does not have curb appeal, then in most cases people will not take the time to look at the inside.

As I explained to the seller about the things that needed to be done to fix up the home, I could see the seller getting overwhelmed. Since I do this on a regular basis, I know what the majority of buyers are looking for - they want a nice home.

Most buyers (i.e. homeowners) do not want to buy a home that needs work. They want everything all fixed up. And, especially in this economy - it's a buyers market.

Since I work in high end parks, I rarely sell homes "as-is." The homes I sell have to be in pristine condition - it's just what the types of buyers in these parks attract. It's extremely difficult to sell a home in high end parks in "as-is" condition and command retail price - it's just not going to happen.

After giving my input to the seller, I asked the seller what he wanted to do. I told him if he wanted to work with me, I could buy the home but I wouldn't be able to meet the price he was asking for. I told him with the fix up work needed and since this was a cash deal, it would have to be less.

(Note: When he first put the home on the market, it was listed for 30k. When I got into the deal, he was at 25k).

The seller told me at this point he was open to the possibility of working with me. I asked him if I could get some estimates from my contractors on the costs of some of the fix up work, would he be willing to negotiate the price?

He said, "Yes." He told me he would like that and would like me to show him the estimates. So, I agreed to get the estimates and we agreed to meet again in a few weeks.

(Note: Typically, when I'm working deals I don't rush things unless the sellers are truly motivated. If they are semi-motivated, I give it some time in between meetings to let them mull things over. I find that time has a way of increasing motivation).

After a couple weeks, we met again with the estimates. The seller looked it over as I explained each item in detail. He said he understood the home needs work. And, he told me he didn't want to do the work himself.

After going over the estimates and the fix up work needed, I asked the seller what his best cash price would be. Then, I was silent. At this point, he told me he'd take 21k for the home. Then, I asked him - is that the best you could do?

(Note: Going into the deal, I already knew the market. I knew a home like this would sell in the low 30k range owner financed).

Then, he went down to 18k. And, then asked me what I'd be willing to take the home for. I told him 14k cash with a quick closing.

At this point, he said he would have to think it over. He said he really wanted to get more than that. I backed off and said, maybe he should continue showing the home and see what happens. But, he said he didn't want to leave things up to chance. So, we agreed to meet again in a couple weeks.

After a few more weeks go by, we met again. This time I asked him what he thought. He told me he'd take 17k for the home. I told him I still think that's a bit too much for me. I asked him if we could meet halfway. He asked, "You mean, between your 14k and my 17k?" I said, "Yes."

He then said, "How about 16k?" Then, I said "Well, that sounds good but it's still a bit more than I was willing to spend." I think I could go for 15k. Then, he said "Really 16k is my bottom line price." So, I said "How about 15k and you take the outside shed?"

(Note: Many times there will be an outside shed that goes with the home. It's nice to have but is not a major selling point (in my opinion). Really, it's the home and the type of park that really makes a difference to most buyers).

He was a bit surprised with my counter offer. He told me he thought he needed to include the shed with the home. I told him, "No, really I don't really need that - it's not a requirement for me." Then, I reminded him having a shed would actually be good for him since he could have a place to store some of his items. He told me, "He never thought of that."

So, he agreed. And, that was that.

To make a long story short, I bought a mid 1990s mobile home, 16x80 with 4 bedrooms and 2 baths for 15k in a high end park. I sold the home to a family who had relatives already living in the park - I received $2500 down and it cash flows in the $500/month range for 10 years.

Though this deal took a bit of time and negotiating back and forth, all my hard work paid off. It made for another nice and relaxing cash flow payday for many years to come.

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!

Terminology Tuesday - Deck

(Note: I think it's important to know the terminology and words used when learning any new business including mobile home investing. I came up with 'Terminology Tuesday' as a way to go over the terminology used in the mobile home business. It's important to know the terminology when talking to people in the business so you're all on the same page).



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As defined in Wikipedia:

"A deck is a flat surface capable of supporting weight, similar to a floor, but typically constructed outdoors, often elevated from the ground, and usually connected to a building. The deck of a house is generally a wooden platform built above the ground and connected to the main building. It is generally enclosed by a railing for safety. Access may be from the house through doors and from the ground via a stairway. Residential decks can be constructed over steep areas or rough ground that is otherwise unusable. Decks can also be covered by a canopy or pergola to control sunlight. "

Definition Link

In general, mobile homes usually have decks attached to them in order to gain entrance to the home by the use of stairs. Most mobile home parks require both a deck and a porch (or back stairs) to the front entrance and back entrance of the home respectively.

Each park will have certain specifications as to the dimensions of mobile home decks and requirements. Most will require safety features such as railings and specific materials used.

Personally, I encounter more involvement with mobile home decks when I am dealing with a mobile home move. In these cases, sometimes the owner will want to keep their deck and/or porch. Or, the mover will not move the deck and/or porch. So, I've had to be more involved with decks in these type of cases.

In one case, I got lucky. The park manager had saved a deck for me. So, I was able to save costs that way and not have to look for a deck or have one built on site.

If a deck is needed, usually one will need to be built on site by a professional carpenter. Right now, I'm in negotiations with a bank regarding an abandoned home they took back where the prior owners took the deck as well as the back porch (not to mention the skirting and air conditioning condenser unit).

Here's a pic of the home:

No Deck



No Back Porch or Back Steps



If you do find the need to build a deck, it's best to look around at the homes in the neighborhood. For this deal, I took a few pics of the homes in the neighborhood and their decks to give me an idea of what I wanted.

Home next door



Home across the street



(Note: If you're doing business in a mobile home park, make sure you check with the park manager as to the specifications and requirements of decks and/or back porches/steps needed in the park. Last thing you want to do is build a deck with the wrong specifications and/or requirements).

As it turns out, my carpenter told me it would take about one week to build both the deck and the back porch steps. This would need to be built on site.

If you'd like to read more about the process of building decks, check out this article "How to Build a Deck in Front of a Mobile Home."

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!

Video: "The Landlord" Movie

Since it's Friday, I thought I'd keep it light and share with everyone this real estate related video trailer for the movie, "The Landlord." Enjoy!

"The Landlord is an independently produced horror/comedy film about the young owner of a demon-haunted apartment building, who must continually find new tenants to replace the ones who get devoured. It is playing at film festivals in the US and Europe in Fall 2009, and will be available in stores, online, and through NetFlix in Jan/Feb 2010.

Finding tenants has never been a problem for Tyler, though he does have trouble keeping them alive to pay rent. No matter how nicely Tyler asks the demons not to eat the renters (or to at least wait a month or two), they never listen. But all that might change when Tyler takes a liking to the newest tenant, a desperate young woman running from monsters of her own."

p.s. If you've joined my Facebook Page already, I just wanted to say "thanks" for all your support. If you know anyone else who may be interested in learning about mobile home investing, feel free to send them over. Thanks again!



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Deal or No Deal: 2/2 Singlewide Mobile Home On Land

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 1990s, 14x60, singlewide mobile home. I found this one through an ad on craigslist.

(Note: I don't really use craigslist a lot. Most of the deals I find are a direct result of my network. Though, I do check it once in awhile to see what's out there. So far, I've only found one deal through craigslist).

Basically, the sellers (who were a husband and wife) had initially purchased this home for themselves and moved it to their land. However, when they got it to their land they did not account for the hookups which ended up costing too much money for them.

Though they were able to afford the move, putting in a septic and water system would have cost them $6800 and $3800 respectively. What had happened was that they thought they already had the infrastructure on their land. However, when they looked into it after the move they found out that it was not within their boundaries - the water system was on someone else's land.

(Note: These sellers had this land for many years - nothing was on it. They had bought the land years ago and planned to use it sometime down the road. Up to this point, it had been empty).

When I spoke to the sellers over the phone, they told me specifically that the home needed to be moved off their land. So, whoever ends up buying it needs a place to move it.

Being in the business, I already have a couple parks to work with for these types of situations. Though each park does have their specifications on what they allow and don't allow into their parks.

(Note: Some people have asked me about getting free lot rent from parks. Some parks will allow you free lot rent for a few months or even longer. Though, most of these parks tend to be more lower end type parks. It's really up to you and your comfort level on the types of parks you want to work in. For me, I'm more comfortable with high end parks (due to this experience) - that's just my personality).

The park I had in mind was more a high end park - hey had already agreed to work with me to fill in their vacant lots and help pay for the move. Though, they would have the authority to approve/disapprove what comes in.

So, I went ahead and made a trip out to inspect the home. Here are a couple of pics:

Outside of home







Rotted siding issues due to no flashing





Inside of home

Living room







Kitchen





Bedroom 1



Bedroom 2



Bathroom





Utility area



Hallway



Overall, the home was in fairly good condition - it looked very well kept. Since it was not hooked up, I could not test the water and the electricity - I had to rely on the sellers feedback and my "gut feeling."

(Note: For me, it's less of a risk if I can test out all the systems in the house to make sure they work (i.e. electricity, water, etc). If one and/or all of the systems cannot be tested, there's a possibility there may be some unknown issues that will come up in the future once everything has been hooked up. I found this out through one of my experiences moving a mobile home. I was able to test out the electricity but not the water (since it wasn't on) - I had a 50/50 chance that at least the electricity worked. Though, when the home arrived at the new site I faced some plumbing issues with the home - it cost a bit of time and money. Lesson learned: It's best to be able to test out all systems if you can).

After assessing the pros and cons, I decided to pass on this deal. Why?

For me, it was just too big of a risk. It had a couple of factors going against it for my own criteria. First, it was a 2/2. Usually, the buyers that I work with prefer a 3/2 and larger. So, I knew this would sit on the market longer. Second, I could not test out any of the systems in the home. For me, this was a big risk especially since it was on a piece of land and needed to be moved. Lastly, it had to be moved. The amount of time and money for a 2/2 for me that needed to be moved that I could not check the systems in the home to make sure they worked was just too much.

So, I passed this lead on to a fellow investor. This investor actually works the same park as I do. Though, specializes in 2 bedrooms and smaller homes which are usually moved from a piece of land into the park.

Since this fellow investor already worked with a market for those looking for 2/2 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.

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!

Terminology Tuesday - Kool Seal

(Note: I think it's important to know the terminology and words used when learning any new business including mobile home investing. I came up with 'Terminology Tuesday' as a way to go over the terminology used in the mobile home business. It's important to know the terminology when talking to people in the business so you're all on the same page).



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As defined in eHow:

"Kool Seal is one of several reflective coatings on the market to finish or retrofit roofs increasing their thermal resistance and improving their resistance to water damage. Kool Seal comes in tow formulations, one a white elastomeric flexible finish that is painted on with a roller or compressor sprayer. The second is an aluminum based sealant that is painted on with a roofing brush and is embedded with aluminum particles. Both products are designed to be applied full strength and should not be thinned. Kool seal also makes sealing tape used to prep the roof for its reflective coat."

Source Definition Link

When going out to inspect a mobile home, it's really important to look for signs of any water damage on the outside and the inside of the home.

For damage to the outside of the home, check the siding - make sure there is proper flashing, and the roof. If the roof looks like it is deteriorating and/or rotting away, ask the seller when the last time the mobile home was property sealed.

(Note: As a general rule of thumb, mobile homes should be inspected and re-sealed every 2-3 years. However, this will vary on the type of mobile home (i.e. materials used, age of roof, etc).

Without proper sealing done to a roof, there is always a chance of water getting into the home. Over time, if the mobile home is not properly sealed water will seep into the home causing water damage. And, that is not a good thing.

Recently, I looked at a home that had not been properly sealed. The seller bought the home 5 years ago and had not done any sealing to the home whatsoever.

When I first walked into the home, I knew it had major issues due to the roof not being re-sealed. Here are a couple pics to show signs of water damage:

Living room area

(Note: Recently painted walls near the floor - visible signs of water damage).



Floor area replacement - whole area under plywood covering hole where particle board eroded

(Note: When inspecting a home, be sure to lift up everything including the carpet (if you can) to check the floor underneath).




Soft spot in floor (left corner)



Kitchen



Kitchen sink - water seepage and possible mold





Utility room - floor damage

(Note: Here there was a hole the floor - the particle board gave out. Usually, any sign of water indication of water damage will speed up the deterioration of particle board. Before, there was a hole here - the seller replaced it with a piece of plywood as seen here).



Closet - water stain



Bathroom sink - water seepage and damage to wood (left side)



Master bathroom - Foam used to stop water seepage

(Note: Any time I see this yellow foam, I always ask the seller about it. Most times, sellers will tell me (if they are being upfront and honest) it's due to a water seepage issue).



Bathroom - floor replacement due to water seepage issue

(Note: If I see a lot of areas in a home that have floor issues, I know it's going to involve a lot more money and time. Plus, it shows the home has issues and mostly probably due to water damage. One or a couple areas of a home needing floor work is ok. But, if floor work is needed in multiple areas then it becomes more involved).





Ceiling stain - inside of bedroom closet

(Note: When inspecting homes, be sure to look at the ceiling not only in the open areas (i.e. living room, bedrooms, etc) but also in the closets. Most times, if there are issues the seller does not take the time to check the closets when presenting a home to show).



Front door entrance - foam used to stop water seepage





Outside of home - no flashing and rotting wood near the top of the roof



Like a car, a mobile home needs regular maintenance. It's imperative this be done on a routine basis. Otherwise, over time it will cause issues and get worse if not properly taken care of.

Water damage is a big issue and very common in many mobile homes I've inspected. Be sure to always be on the lookout for any signs of water damage. I hope these pics help you to see the issues that can come up when inspecting mobile homes.

Happy investing!

p.s. If you'd like to read about a case study on a home that had water damage issues, you can find the post here. Thanks for reading!