I came across this ad.
"i have a 12 foot by 50 foot mobile home for sale. it's an older mobile home model but in very good shape. It is presently rented , but the renters know i am trying to sell it and are ready to move out at anytime. It's got the best Directv for $50 a month and is a very quiet neighborhood.The price is $4250"
So I sent him an e-mail saying
"If I were to pay the
full price for this, and wanted to keep the renters, how much are they paying
and what would the cash flow be?"
He sent me back an e-mail asking for my phone number and later that night I got a call from him.
I asked him what the make and model was of the Mobile Home and he did not know accept it was a 1970's Helmet, I must have let out one of those "oh...." sounds because he asked me what was the matter. And I explained that my partner and I only buy mobile homes that are 20 to 15 years old, and right away he dropped $1,000 from the price. I knew right then I had a motivated seller. I then asked how many rooms and bathrooms and he told me it was 2 bed one bath, and then I asked him about the park and he explained it was really small had only 3 mobile homes on it, they all three shared the Direct TV and that was $65, the Water, and they all chipped in for the Mini Dumpster they used for trash and for and they paid $35 for that. I asked him what the lot rent was and he acted like he was confused. I realized he must own the land the mobile homes are on, so I asked him how much the renters were paying and he sort of recovered because he said the renters were paying $380, and the lot rent was $160.
I then explained that I was a Mobile Home Investor and my partner and I bought mobile homes based on the cash flow they generated and the lowers cash flow we would accept is $250 a month, and that his was only generating $120 a month.
***
A little side note here... my partner and I don't have two nickles to rub between us, but we have a list as long as our arms of people who want to lend money for the mobile homes after we have sold the mobile home. So it would be like they bought a partial note on the mobile home. More then one of those people said they would lend us money on the front end if we would pay a higher yield. I was offering 15% for back end, and just told people we would pay 18% on the front end.
The reason I was so put off by this deal was that a lone for 2 years at 18% for $3,500 payment would be $147.35, the $120 didn't cover it.
***
And then I asked something I forgot, I asked him where the mobile home park was and he said it was at a place next to a lake that is two hours away and it had a convince store across the street, a gas station next to that, and there was a fast food place across the street from them on the other side of the street from the mobile
And I said... "Oh, normally my partner and I buy mobile homes in a more urban area"
Again the seller acted like he was caught off guard, it was like it had not occurred to him that an investor would want to buy the mobile home.
And he balked... he dropped the price another $500!
I told him that I really wasn't sure we could make it work, but I would need to talk to my partner and that he and I would make a decision the next day and I would get back to him.
And I swear... he sounded like I was a long distance girlfriend who had told him she had met someone else and was conflicted over if she still loved him or not. (If you are ever in that situation... as soon as the words "I met someone else" come out of the mouth... it's all going to be down hill just hang up and do your best to let it go because it's already gone)
My partner and I live at opposite ends of the county, he is checking the mobile home parks at his end, and I am checking the mobile home parks at mine that way we have a really good coverage area, so we meet up at a KFC or McDonald half way between us once a week to touch base and more often if we have to discuss stuff like banking or anything we need to plan to buy.
I sent my partner the link with an e-mail explaining I didn't like the deal but I was intrigued by it because it was a good first deal to cut our teeth on if we could swing it.
The next day I explained to my partner what was going on, I logged into the website where the seller had his ad to show my business partner and the seller had changed his ad.
It now read:
i have a 12 foot by 50 foot mobile home for sale. it is like a 1970's model but in very good shape. It is presently rented if you want to use it as a rental the renters are paying $400, but the renters know i am trying to sell it and are ready to move out at anytime. It is already sitting on a lot which rents for $100 a month. it's got the best Directv for $50 a month. i mean you get all the possible channels. it is a very quiet neighborhood. There are only two other trailers on the lot. There is a Quick Trip right across the street and a restaraunt is just next door. I can send pictures if you want.
The trailer can be moved if you want.
Well thank you for checking this out, and i look forward to hearing from SOMEONE from oy there.
The price is $4250 or Best offer. i am really hurting for money in this economy.
My partner thought it was a go, and I explained it was in a town 2 hours away, and I was not comfortable with that. The other thing was how the broke stuff out for billing, I had to pull carpet from my house and I still am paying for the mini dumpster, it's only $20 a month, my water bill is $30, and my dish network is $75, but there was no real way to break that out of the mobile home payment so the buyer had to pay it instead of us to raise our return.
My business partner agreed and I told him that I was going to think about it and then contact the seller and see if we could work something out, he said that was fine and just to let him know.
I drove home, sat down with out the TV or Spotify on and it was just me and the cats for about 20 to 30 minutes trying to figure out a way to make this happen.
And here is what I came up with,
I e-mailed the seller and explained that my partner and I were really sorry but the price was too high for such an old mobile home, that I had tried to find a price for a 1970's Helmet Mobile Home but I could not even find a listing for a brand by that name, and then there was the distance from town that really threw us for a loop. That we had the idea the only way this would work for us was for us to buy the Mobile Home and then have him kind of manage it for us for like $50 a month, but at the price he had with the cash flow as it was we did not see how that was possible but we wished him the best.
And that was yesterday and he has not gotten back to me.
Honestly the only way I see this working is if the seller really drops his price to like $2,000 or $2,500. That way the payments to our lender can be between $100 to $150 a month for 24 months and if we can get the seller to agree to manage the mobile for like $50 a month.
That way we get between $45 and $50 a month, it's not a lot but it's like I was telling you before, by it's self it's a large combo pizza for the gang and some pay for view once a month, but if you do the same thing over and over again, 10 deals just like that is a car payment.
And that wraps up the deal we walked away from.
Wade
Wednesday, May 30, 2012
Watch out for People like "Mr. Knuckle Head" when seeing if Mobile Home Investing is for you.
If there is one thing that really upsets me is people who set the deck when playing their cards about if mobile home investing works or not to show you a loosing hand.
As an example... do a Google search for "Mobile Home Investing" and you are going to find about 20 to 30 articles about how it does not work all by the same guy on article websites. This guy sells a product for Mobile Home Park Investing.And he has a really great point, rent out the dirt and there is almost no way you can get screwed over.
The thing is if you did not know this guys name or his partners you would not realize he is telling the same story over and over again just changing it up a bit.
His story goes (to paraphrase) something like this...
He goes out and tries to do a Lonnie Deal and buys an older mobile home for around $5,000 and then ends up spending $8,000 to fix the mobile home up and can't sell it for the price to recover even that cost, he ends up selling for $5,000 just to get rid of the crumby mobile home and just washes his hands of the whole thing.
Here is my problem with this knuckle head approach.
A Lonnie Deal up front is a pretty straight forward affair, buy low sell high.
But then if you really did read Lonnie's books "Deal On Wheels" or "Make Money from Mobile Homes" to paraphrase he flat out tells you to go out and learn your market, go out and see mobile homes for sale to learn their value and keep doing that until you come across a deal where you just know you can't loose money.
Got that?
You keep going to look at Mobile Homes until you understand the underlining value of the Mobile Home.
And depending on how much you research (I mean seriously folks if your Google research stops at the first 10 pages your really not getting a good idea, Google list the most popular sites first, the best information is not always popular) you will see some Mobile Home Guru's tell you to see 30 Mobile Homes and some tell you to see 100 and then later will admit they have never had a student go the full 100 most stop at around 15 to 25 having found the low hanging fruit that is easy pickings.
And then there is the second thing about Mobile Home Investing that Mr. Knuckle Head pisses me off about, if you have done any research you know that you give the seller a $100 bill and have them sign an offer to buy with the contingency you will have your handy man check out the home and give you a price on the cost to fix anything.
Yeah... some people skip that part, but why would you if you really thought about it? I mean why take the risk? Pay someone $100 to check the Mobile Home out and while they are doing that you check that the tax and license are up to date. If the Mobile Home is a looser your out $200 not $3,000 or more, if it's a keeper you roll that $200 into the cost of the Mobile Home when you sell it. Same thing goes for the Origination fees to be compliant with the SAFE Act. Just roll it into the cost of the Mobile Home when you sell it.
Look at Mobile Homes being sold by other Mobile Home Investors, they stick out like a sore thumb on Craigslist, almost everyone has something in the description saying they offer financing if you need it and they normally have more then one Mobile Home for sale in a thee month span so you will see the same phone number. And here is the proof in the pudding.. if they can do it so can you.
And that is what it's all about... if anyone else can do it where you live, then you can do it to.
Don't let some jack ass with an ulterior motive screw you out of something you want to do. I am one of those people to is specious of naysayers by nature kind of guy. When someone tells me something I always ask myself these three questions... "Why Are They Telling Me This?",. "What Do They Hope I Will Do With This Information?", and "What Do They Hope To Gain From Me Knowing This?" 9 times out of 10 most people shoot their mouth off with out thinking just to hear themselves talk and so you will think they are smarter than they really are.
No problem... ignor what they say.
But there is that 1 out of 10 (as an example did you know that on average 1 out of every 10 people will test positive as a psychopath? See 1 out of 10... it matters in the big picture as well as the small) that when he or she is telling you something, it's either to get in your way, or to put you on a path they want you to walk because they get something out of it.
Now again... the guy talking garbage about how Mobile Home Investing does not work and Mobile Home Park Investing is a gold mine... he is right, they are Gold Mines. But here is where I am coming from, my partner and I are investing in Mobile Homes for the cash flow they give us for such a small investment. Emphasis on the word SMALL.
My Ex Hard Money Lender lived in LA California You couldn't even find a Mobile Home for less than $100,000 in most parks. For where My Business partner and I live those numbers wouldn't work and make sense, depending on the type of Mobile Home we invest in my business partner and I agreed we would never spend more then $25,000 for a Mobile Home on land and never more than $9,000 for a Mobile Home in a park.
So he and I are not going to get the say $7,000 a moth passive income (say a 50 slot Mobile Home Park renting out spaces for $200 a month, a little more than the average for our area.) from a Mobile Home Park, but if we can buy a Mobile Home for between $3,000 and $5,000 each so we can get a passive income of between $250 and $350 a month and that doesn't suck, and the more deals we can do like that the better.
Realistically speaking if he and I only got the low side of payments split between us, I only need 8 of these deals to make my house payment, at 10 I have my house payment and a few utilities, at 14, I can include a car payment.
To Invest in a Mobile Home park around here if we were to use the method used by the guy bad mouthing Mobile Homes and telling us to invest in Mobile Home Parks... we would need $180,000 to buy a Mobile Home... between $3,000 and $5,000.
We are not short sited... we just don't have the $180,000 down payment on an owner financed park.
See what I mean?
Wade
As an example... do a Google search for "Mobile Home Investing" and you are going to find about 20 to 30 articles about how it does not work all by the same guy on article websites. This guy sells a product for Mobile Home Park Investing.And he has a really great point, rent out the dirt and there is almost no way you can get screwed over.
The thing is if you did not know this guys name or his partners you would not realize he is telling the same story over and over again just changing it up a bit.
His story goes (to paraphrase) something like this...
He goes out and tries to do a Lonnie Deal and buys an older mobile home for around $5,000 and then ends up spending $8,000 to fix the mobile home up and can't sell it for the price to recover even that cost, he ends up selling for $5,000 just to get rid of the crumby mobile home and just washes his hands of the whole thing.
Here is my problem with this knuckle head approach.
A Lonnie Deal up front is a pretty straight forward affair, buy low sell high.
But then if you really did read Lonnie's books "Deal On Wheels" or "Make Money from Mobile Homes" to paraphrase he flat out tells you to go out and learn your market, go out and see mobile homes for sale to learn their value and keep doing that until you come across a deal where you just know you can't loose money.
Got that?
You keep going to look at Mobile Homes until you understand the underlining value of the Mobile Home.
And depending on how much you research (I mean seriously folks if your Google research stops at the first 10 pages your really not getting a good idea, Google list the most popular sites first, the best information is not always popular) you will see some Mobile Home Guru's tell you to see 30 Mobile Homes and some tell you to see 100 and then later will admit they have never had a student go the full 100 most stop at around 15 to 25 having found the low hanging fruit that is easy pickings.
And then there is the second thing about Mobile Home Investing that Mr. Knuckle Head pisses me off about, if you have done any research you know that you give the seller a $100 bill and have them sign an offer to buy with the contingency you will have your handy man check out the home and give you a price on the cost to fix anything.
Yeah... some people skip that part, but why would you if you really thought about it? I mean why take the risk? Pay someone $100 to check the Mobile Home out and while they are doing that you check that the tax and license are up to date. If the Mobile Home is a looser your out $200 not $3,000 or more, if it's a keeper you roll that $200 into the cost of the Mobile Home when you sell it. Same thing goes for the Origination fees to be compliant with the SAFE Act. Just roll it into the cost of the Mobile Home when you sell it.
Look at Mobile Homes being sold by other Mobile Home Investors, they stick out like a sore thumb on Craigslist, almost everyone has something in the description saying they offer financing if you need it and they normally have more then one Mobile Home for sale in a thee month span so you will see the same phone number. And here is the proof in the pudding.. if they can do it so can you.
And that is what it's all about... if anyone else can do it where you live, then you can do it to.
Don't let some jack ass with an ulterior motive screw you out of something you want to do. I am one of those people to is specious of naysayers by nature kind of guy. When someone tells me something I always ask myself these three questions... "Why Are They Telling Me This?",. "What Do They Hope I Will Do With This Information?", and "What Do They Hope To Gain From Me Knowing This?" 9 times out of 10 most people shoot their mouth off with out thinking just to hear themselves talk and so you will think they are smarter than they really are.
No problem... ignor what they say.
But there is that 1 out of 10 (as an example did you know that on average 1 out of every 10 people will test positive as a psychopath? See 1 out of 10... it matters in the big picture as well as the small) that when he or she is telling you something, it's either to get in your way, or to put you on a path they want you to walk because they get something out of it.
Now again... the guy talking garbage about how Mobile Home Investing does not work and Mobile Home Park Investing is a gold mine... he is right, they are Gold Mines. But here is where I am coming from, my partner and I are investing in Mobile Homes for the cash flow they give us for such a small investment. Emphasis on the word SMALL.
My Ex Hard Money Lender lived in LA California You couldn't even find a Mobile Home for less than $100,000 in most parks. For where My Business partner and I live those numbers wouldn't work and make sense, depending on the type of Mobile Home we invest in my business partner and I agreed we would never spend more then $25,000 for a Mobile Home on land and never more than $9,000 for a Mobile Home in a park.
So he and I are not going to get the say $7,000 a moth passive income (say a 50 slot Mobile Home Park renting out spaces for $200 a month, a little more than the average for our area.) from a Mobile Home Park, but if we can buy a Mobile Home for between $3,000 and $5,000 each so we can get a passive income of between $250 and $350 a month and that doesn't suck, and the more deals we can do like that the better.
Realistically speaking if he and I only got the low side of payments split between us, I only need 8 of these deals to make my house payment, at 10 I have my house payment and a few utilities, at 14, I can include a car payment.
To Invest in a Mobile Home park around here if we were to use the method used by the guy bad mouthing Mobile Homes and telling us to invest in Mobile Home Parks... we would need $180,000 to buy a Mobile Home... between $3,000 and $5,000.
We are not short sited... we just don't have the $180,000 down payment on an owner financed park.
See what I mean?
Wade
Tuesday, May 29, 2012
What I have been up to for the last 5 months
OK, so it's been almost half a year since I last wrote and that is my fault.
As the saying goes... I accept total responsibility for my actions and take full rewards or punishment for my actions.
I acted on nothing.
To catch you up to speed I sent the form for the hard money loand to my hard money lender and I did not know it at the time but although she talked a good game saying she use to be a paralegal and understood legal speak, she really did not understand the form.
As a matter of fact there is a part of the form that flat out says the lender of the money has to let the borrower know if they change the address of where the payment is to be sent in writing in a reasonable amount of time so the borrower can send the payment on time and not be late. (it's all standard stuff, I'm not kidding check it out)
For what ever reason that bit threw her for a serious loop.
Being accused of stalking is not something I am use too, and I being a shallow and vain man (I am kidding) I do not do business with people who make me feel uncomfortable (that part I am not kidding about).
So I basically told her I don't want to have any business dealings with her any more and asked her to loose my contact information.
She still e-mails me, sends me text, and sends me photos, all of them saying that she will never be in contact with me again. Just like the last e-mails, text, and photos the months before said.
This is one of those things that does not happen to most people but I am blessed (again... kidding) with this kind of stupid crap every now and then and I use it as a lesson for the people I talk to.
Be mindful of who you go into business with, some people might be able to be great at the start of a project but end up making you crash and burn before you get to where you want to go.
5 Months later here I am...
A lot has changed in the last 5 months...
I was in a relationship when I started, and now I'm not in one.
I wanted to start a youtube channel but not only does the camera add 10 lbs it also shows every fault you have and I have a ton (aka I am too ugly for video LOL).
A few months ago I was shooting my mouth off at work about how I could teach anyone how to be a millionaire in 10 years, and all it really takes is sacrifice and dedication when one of the guys I know took me aside and said he was willing to do what needed to be done.
I explained the first part was to not accumulate any more debt, the next was to cut his cost of living by 10%, and then to either debt snow ball or debt avalanche his debt and use the 10% he was saving from his cost of living as the debt accelerator.
He was really making great strides and then he went and bought a stero for his car that if he cranks it and opens the trunk he can rattle the windows in his parents house. (he is still in his early 20's these things happen) I explained he will need to start over and do it all over again.
He and I were at lunch one day and he asked if there was any way to speed up the process and I told him that he can start a business, I used the fact that I use to import cell phones from Taiwan wholesale and then sell them below retail and I paid off a great deal of debt before ebay closed my store. (long story, I will not bore you with it)
He batted around a few ideas about going into business but long story short we agreed to start a company investing in mobile homes.
***
I don't know how to segue into this so I'm just going to explain it in one short little paragraphs right here.
I knew I wanted to invest in Mobile Homes for a while and I didn't have the money, so I read about the red paper clip guy and knew I could not do that, but I could make a little money, invest that money into something and that would make money that I could invest in to make a greater profit and keep doing that.
So I wrote an e-book (and not a very good one at that) about how to open a bank account in the Cayman Islands, its not great but it does tell you how to do it and I think everyone in their right mind should keep some money off shore in a bank backed by gold and that book does that. And it gave me the money to invest in one half of a breading pair of Yorkie miniature dogs.
I don't know if you have ever raised dogs... but it's a labor of love and a lot of clean up. The little guys are cute but messy.
After a while, I had enough from the Yourkie's to buy into one half of a breading pair of Siberian Cats.
From that one deal by reinvesting my profits... I got into a deal where I am half owner of 6 Siberian Breading Cats. 4 Queens and 2 Studs.
Right now I have a litter of cute little ones that are 5 weeks old of three boys and three girls and two more litters on the way from the other two Queens.
My cat breeding partner and I get between $900 and $1,200 for each kitten depending on the coloring and definition so I will be able to use my half of the next litter to invest in mobile homes.
And that is enough about that.
***
And ... I work for a company that says it's going to lay off 8 to 10% of it's work force, and every day a few more people are leaving with boxes in their hands and empty desk left where they once sat.
Oh yeah... the first mobile home that fits my partners and my "Lonnie Deal" investment style I had to kill, but that will be in my next post.
This is just a fast forward get you up to speed post, but now you know.
I will post about the busted "Lonnie Deal" tomorrow.
Have a Super Fantastic Totally Awesome Incredibly Great Day
Wade
As the saying goes... I accept total responsibility for my actions and take full rewards or punishment for my actions.
I acted on nothing.
To catch you up to speed I sent the form for the hard money loand to my hard money lender and I did not know it at the time but although she talked a good game saying she use to be a paralegal and understood legal speak, she really did not understand the form.
As a matter of fact there is a part of the form that flat out says the lender of the money has to let the borrower know if they change the address of where the payment is to be sent in writing in a reasonable amount of time so the borrower can send the payment on time and not be late. (it's all standard stuff, I'm not kidding check it out)
For what ever reason that bit threw her for a serious loop.
Being accused of stalking is not something I am use too, and I being a shallow and vain man (I am kidding) I do not do business with people who make me feel uncomfortable (that part I am not kidding about).
So I basically told her I don't want to have any business dealings with her any more and asked her to loose my contact information.
She still e-mails me, sends me text, and sends me photos, all of them saying that she will never be in contact with me again. Just like the last e-mails, text, and photos the months before said.
This is one of those things that does not happen to most people but I am blessed (again... kidding) with this kind of stupid crap every now and then and I use it as a lesson for the people I talk to.
Be mindful of who you go into business with, some people might be able to be great at the start of a project but end up making you crash and burn before you get to where you want to go.
5 Months later here I am...
A lot has changed in the last 5 months...
I was in a relationship when I started, and now I'm not in one.
I wanted to start a youtube channel but not only does the camera add 10 lbs it also shows every fault you have and I have a ton (aka I am too ugly for video LOL).
A few months ago I was shooting my mouth off at work about how I could teach anyone how to be a millionaire in 10 years, and all it really takes is sacrifice and dedication when one of the guys I know took me aside and said he was willing to do what needed to be done.
I explained the first part was to not accumulate any more debt, the next was to cut his cost of living by 10%, and then to either debt snow ball or debt avalanche his debt and use the 10% he was saving from his cost of living as the debt accelerator.
He was really making great strides and then he went and bought a stero for his car that if he cranks it and opens the trunk he can rattle the windows in his parents house. (he is still in his early 20's these things happen) I explained he will need to start over and do it all over again.
He and I were at lunch one day and he asked if there was any way to speed up the process and I told him that he can start a business, I used the fact that I use to import cell phones from Taiwan wholesale and then sell them below retail and I paid off a great deal of debt before ebay closed my store. (long story, I will not bore you with it)
He batted around a few ideas about going into business but long story short we agreed to start a company investing in mobile homes.
***
I don't know how to segue into this so I'm just going to explain it in one short little paragraphs right here.
I knew I wanted to invest in Mobile Homes for a while and I didn't have the money, so I read about the red paper clip guy and knew I could not do that, but I could make a little money, invest that money into something and that would make money that I could invest in to make a greater profit and keep doing that.
So I wrote an e-book (and not a very good one at that) about how to open a bank account in the Cayman Islands, its not great but it does tell you how to do it and I think everyone in their right mind should keep some money off shore in a bank backed by gold and that book does that. And it gave me the money to invest in one half of a breading pair of Yorkie miniature dogs.
I don't know if you have ever raised dogs... but it's a labor of love and a lot of clean up. The little guys are cute but messy.
After a while, I had enough from the Yourkie's to buy into one half of a breading pair of Siberian Cats.
From that one deal by reinvesting my profits... I got into a deal where I am half owner of 6 Siberian Breading Cats. 4 Queens and 2 Studs.
Right now I have a litter of cute little ones that are 5 weeks old of three boys and three girls and two more litters on the way from the other two Queens.
My cat breeding partner and I get between $900 and $1,200 for each kitten depending on the coloring and definition so I will be able to use my half of the next litter to invest in mobile homes.
And that is enough about that.
***
And ... I work for a company that says it's going to lay off 8 to 10% of it's work force, and every day a few more people are leaving with boxes in their hands and empty desk left where they once sat.
Oh yeah... the first mobile home that fits my partners and my "Lonnie Deal" investment style I had to kill, but that will be in my next post.
This is just a fast forward get you up to speed post, but now you know.
I will post about the busted "Lonnie Deal" tomorrow.
Have a Super Fantastic Totally Awesome Incredibly Great Day
Wade
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