Day 1
I am still waiting for my hard money lender to send me the cash, I sent her a promissory note that said I would pay a flat 20% for a 36 month note. I know to some people that sounds nuts, but every way I break down the numbers I end up making bank.
Even with a really bad deal where I have to pay top dollar and it takes me three months to sell the mobile home, I still end up putting over $200 a month in my pocket (If you know ANYTHING about stick built homes you know that investors spend $100,000 and get a $200 a month payout after cost) and I LOVE that.
So with out the money in the bank (and hopefully on it's way) I set out today to do what John Fedro suggest and went to drive the speed bumps to see 30 mobile homes before I made my first offer on a mobile home.
Well, I started out... and fell flat.
To be honest this was actually my second time setting out to drive the speed bumps, the first time I got to a mobile home park, did what you are suppose to do according to the god father of Mobile Home Investing Lonnie Scruggs and introduced myself to the Mobile Home Park Manager and explained what I wanted to do... and she flat out told me that the park does not allow investors and now that THE SAFE ACT is in place no one can do it anyway.
That time I went home and spent about a week finding out that there were a whole lot of people arguing on both sides of the fence about if THE SAFE ACT even applied to Mobile Homes let alone Financing a Mobile Home you already owned. But Like anyone who really wants the answer I got it... and it turned out to be simpler than those people yelling across the fence realized.
I first saw what I thought could help me with THE SAFE ACT and Mobile Home Investing on a bookshelf about 15 years ago (before there was a THE SAFE ACT) and again on a YouTube Video about Mobile Home Investing. So I did what you are suppose to do, I paid a lawyer a consultation fee and found out that for where I live a Rent To Own strategy fit the bill and got around all those nasty regulations. (I am not a lawyer, and for where you live the rules might be different, so check it out before you go that rout OK?)
Anyway... I had been looking at CraigsList for a few weeks and there is a Mobile Home I would like to buy but it has to be moved and as everyone knows from reading Lonnie Scruggs book "Deal On Wheels" moving the Mobile Home is a bad idea because you have to pass the cost on to the buyer (but like I said... even with that in play I still make over $200 a month in passive income and that is paying back a lone at 20%... even with moving a mobile home) and I read in "Deals On Wheels" where Lonnie Scruggs places his "We Buy Mobile Homes" add in the weekly Penny Saver/Thrifty Nickle type paper.
So I picked one up and BAM! there it was... a Beautiful 1982 Schult Mobile Home for under $2000. I was so excited to find it, and even more excited when I called the owner and found out they were really motivated to sell in a hurry and knocked $500 off the price before I had even started asking.
I started talking to the seller and did my whole bit about not being able to afford much, and that I worked for a( imaginary) boss who was tough as nails and that I would need to come out and take some pictures to show her before we could really talk. She agreed to let me see the place and then dropped the price again by $600.
As I was driving to the Mobile Home Park I was feeling pretty full of myself thinking I had gotten really lucky because the seller was so motivate to sell they had knocked $1,100 off the sale price before I had even gone into my bit about how my (still imaginary) boss doesn't pay over "X" price for a mobile home this old in a park... and then I saw why the place was so cheap.
I came driving up to Lot 72 and the place looked like it was part of the set for Sanford and Son, there was crap everywhere. When I got out of my truck a man came walking up to me and introduced himself as a friend of the family that was selling and he would show me the home, and he took me through the back door through the kitchen.
Only when we got the door open... home was a pretty lose term.
The whole floor was missing in the living room... I don't mean bits and pieces... the whole floor from the front of the Mobile Home to the kitchen was gone and all the appliances were gone too.
The Oven, the Dishwasher, the Refrigerator, the Washer and Dryer, and then to top it all off... the Hot Water Heater was gone too.
One of these things isn't such a big deal... if you check CraigsList often enough you know that any one of these things comes up used for under $100 all the time, but needing all of them was going to be a pain, and then the missing floor too!
Walking to the back of the Mobile Home I felt that at any moment my foot would fall through the floor and I clearly saw the toilet and tub were both listing to one side towards each other and that told me this was bad.
Cut to the end....
I get out side and the guy tells me how much I want to offer because he already has instructions how low to go, but before I made my offer he wanted me to know the roof needed to be replaced. And then he just stood there with a look on his face.
I told him I wasn't interested and to tell the sellers I was sorry.
Here is why I walked away... say the sellers had lowered the price of the Mobile Home as low as $500 as their rock bottom price and I picked it up at that.
To buy all the appliances, the new floor, the roof, to pay the handy man who was going to do the work and to pay lot rent on top of that... we are talking at least 3 to 4 thousand dollars and that is for a 1982 Mobile Home.
I have been checking out CraigsList for over a year... I can pick up and 2003 Mobile Home that is in very good shape for less than that, and a 2003 Mobile Home is a better seller than a 1982 Mobile Home.
So I walked away... this try failed, but there will always be another one.
Thanks for Reading,
That Mobile Home Guy
That Mobile Home Guy
Wade
