I started visiting CRE Online in November 2004. I read it just about daily. I bought both Lonnie Scruggs books (A real heartfelt thanks to Lonnie for writing them) and started driving the speed humps.
I bought Tony Colella’s Investing in Mobile Homes with Land. Thank you, too. I just added my second land/home package.
I have also bought Ray Alcorn’s, DealMaker’s Guide to Mobile Home Parks, too. (I’m sure I will thank Ray, too, as soon as I buy my first mobile home park.)
I have read all these books at least twice and some three times. I wanted to follow Lonnie’s way of doing this. So, first things first; I met with several managers with positive results from most.
Deal #1: January 2005
In January 2005, I bought my first land/home package and put too much money into the fix up. I bought it for $23,000 for a 1981 14×70 3 bed/2 bath on a large lot on a cul-de-sac street.
Spent $6,000 in fix up. (Yes, it makes me sick, too. I have no idea how it went that high, but it did.) I rented it out for $600/month for two months.
Then I sold the home and rented the lot Lonnie-style. I sold the mobile home for $15,000 with $600 down and $305/month for 60 months. Lot rent is $200/month.
I will do my best to never sell this land and rent the lot forever. The buyers have been paying like clock work. Not sure there is a way to figure yield on this kind of deal.
Deal #2: April 2005
In April 05, through a manager, I bought a 1984 14×76 2 bed/2 bath IMMACULATE for $7,000. It sold in two days for $19,000 at $402/month for 60 months. 281% Return on Investment (ROI), I think. Still trying to figure yields.
Deal #3: May 2005
In May 2005, through a manager in another park, I bought a 1979 14×57 2 bed/2 bath in really nice condition. I initially made a deal of $3,000 as long as there were no shocks from manager.
The manager said all new owners must remove window air conditioners and replace them with central air. I had already heard of the possible a/c issue.
So, the seller and I agreed on $2,000. And if I could sell the home with the new owners responsible for fixing the problem, I would give her the original $3,000. This is the reason to talk to the managers. I had looked at some of the homes for sale in her park, but the prices were too high.
Then the manager said, “Go talk to the lady in that mobile home. She is helping another lady who has already moved out.” This seller had moved out eighteen months ago.
No “for sale” sign, but I got the number from the neighbor. She has been paying lot rent for eighteen months at $190/month, plus electric and gas. And the manager brought me a buyer three days later.
It sold for $9,300 at 9.9% interest. The $300 is for the washer/dryer they wanted to buy that was still in the trailer. They put $2,000 down and $198/month for 44 months. The buyer agreed to the window unit removal and central a/c, and manager helped convince them. Done deal!
The manager got a $200 finder’s fee. She said she wants more next time if she has to do this much Spanish translation again. I smiled and gladly agreed.
The original seller got her extra $1,000. This seller cried when my wife took her the extra $1,000. She did not figure she would see us again. So stick to your word. I’m not too good at figuring yields, but I know it’s good.
I visited this buyer three weeks ago to finish a paper I forgot. He has replaced wood flooring in one bedroom and put new vinyl in the rest of the house. And granite counter top in the bathroom–yes, real granite. I’m sure it was left over from a job.
The window a/c units are still there. The manager must have made a deal with them.
Deal #4: August 2005
The manager has already called and told me about another and we have visited two or three times. In August 2005, I got a contract on my second land/home deal three lots down from that first expensive package. I promise not to go crazy with this one.
I want to try out the full landlord stuff like Tony Colella does, and I am going to rent this for around $650/month. If that works out, it will stay that way. If not, I will sell the trailer on payments and rent the lot.
What a perfect way to send my kids to college. One starts Baylor University in two weeks, the other is in her third year at University of North Texas. I only need two deals for UNT and about fifteen for Baylor. So, have I done okay so far?