First PM experience was a Shocker (long) - Posted by John C

Posted by Kurtis on September 19, 2003 at 08:14:50:

Nice job. Credit on your prospective buyers will probably make it harder to flip properties. Hopefully he told you what the minimum he’ll except is. Assume you doing the work yourself, but the 2k per home rehab is probably low. If he was going to dump them 3 - 4k is probably more realistic. Good luck

First PM experience was a Shocker (long) - Posted by John C

Posted by John C on September 18, 2003 at 23:23:34:

I don’t mind saying that my first experience with a park manager was a shock. After reading some of the posts here about PM’s I was a little nervous about approaching the office door.

Heres the story:

My wife and I took a ride to see what would be our first mobile home deal in a park about 30 minutes from my home.
In my conversations with the MH owner he was selling this mobile home and was willing to hold a note with a little down, so I talked him into a L/O over the phone, and we would talk more when I came to see the home.

We arrived at the park and there seemed to be a lot of cleaning and painting going on in the park, which was pretty impressive. My wife and I went to see the mobile, it was nice and clean and everything worked so I really would have nothing to do to it but put a sign in the window and run an ad in the newspaper.

The owner of the home explained that the park was under new management and the new owner was really doing a wonderful job upgrading the park. I knew before I signed my first deal I had to meet the park manager and tell him what I had planned to do in his park. So I drove to the park office and nervously opened the door and walked in. I asked the nice lady behind the desk if I could see the park manager and she said he would be right back in a minute or so. I decided this was a perfect time to practice my “I buy and sell Mobile Homes speech” I had worked on, lol. Right in the middle of my pitch the manager walks in, so I stop talking to the lady introduced myself and started my pitch again. He just stared at me for a moment after I was done and I must admit the silence was a little uncomfortable.
He explained that he had no problem letting me deal in his park, but, I would have to let him run a criminal history and a credit check on me first and then on anyone I financed the home to. I told him that I had no problem with that. I explained to him about the MH I just looked at and he went into his desk grabbed the paper work for the criminal history and asked me to fill it out and the cost would be $37.00. I said sure, I took the paperwork, and started to fill it out, reached in my pocket and handed him $40.00.
As I was filling out the paperwork and he says “That’s a first” to the lady behind the desk, who turned out to be his wife. I asked what he was referring to, and he explained that most people take the paperwork and tell him they will bring it back in a day or so, and he never sees them again. I told him I had nothing to hide and that it would be a pleasure to work in a park like his,(yep, kissed him right on the Butt!). I must have made a good impression to him because when I handed him back the paperwork, and he took out a map of the park and told me he had 7 old mobile homes in the park he was going to haul out but if I promised to fix them up and make them look nice, that I could have them for FREE and to do what I wanted with them, I said FREE, and he said sure you make them look nice and just pay the lot rent on them and he would even give me 1 months free rent on each lot to get me started. He told me that they were left there from the past owners and there is no back rent owed on them and that he would draw up a document and sign an abandonment letter so I could take that to the DMV and get the titles in my name. He also said if I do a good job on the homes I could use him as a reference to do deals in other parks in the area.
So needless to say I am taking the deal. The homes are in bad shape and need a lot of work, but 8 deals in one shot seemed OK to me. I figured each of the 7 MH’s need about $2000.00 each or less to fix up, which is about what a Lonnie deal would cost me and the original MH I looked at needs nothing so when I sell that one it will help out with the lot rents on the 7. Each MH will sell for approximately $5000.00 to $7000.00 with owner financing.
So for an investment of $14,000.00 I’m looking at a return of $48,000.00 on my first day out, my approximate yield is, well, to quote Lonnie, Good enough.

Thanks for reading

John C

Re: First PM experience was a Shocker (long) - Posted by Dr. Craig Whisler CA NV

Posted by Dr. Craig Whisler CA NV on September 19, 2003 at 10:20:58:

7 freebies is great, but ask if you can take them one at a time instead of all at once. Tht way you probably can get them rehabbed and sold before you have to pay a lot of space rent. Rehabbing 7 at once could be a little overwhelming and you probably would end up paying a lot more space rent that way. Pick the nicest one first and work toward the hardest to fix and sell last to minimize your space rent. Just tell the owner that you want them all but you can only fix one at a time. It might be a good idea to look ahead time-wise to see how long it will take you to get the new titles because it will could be difficult to resell them before you get the titles (but not impossible since you have the PM’s cooperation). It wouldn’t be good if waiting for the titles cost you an unexpected month’s rent while waiting for them. You might explain this to the PM and ask if you could have your free month start the day the title arrives. There is nothing to prevent you from rehabbing and searching for buyers while waiting for the titles though.

I hope you realise how valuable it is that the PM said you could use him for reference if you do well. I’d ask him if he even knows any other PMs or park owners. If so I would adk him to phone ahead and tell the others what a great find you were for him.

All salesmen know that a good referral is worth 10-20 cold calls.

Regards, doc

Great Job! - Posted by Joe C. (AR)

Posted by Joe C. (AR) on September 18, 2003 at 23:59:55:

You were very fortunate to to find that situation on your first try. Must be fate, ey? Do a good job there and you’ll have a friend and supporter for life.
Just a tip, when you take those homes make them look as nice on the outside as you can, as quickly as you can. It may take a while to complete them on the inside but if you fix up the outside first, it won’t matter to the PM. If you try to do them one at a time and don’t get to the last one for six months, the PM will be looking at those eyesores all that time and wishing he had hauled them off.
Good Luck
Joe C. (AR)

Re: Great Job! - Posted by John C

Posted by John C on September 19, 2003 at 24:20:46:

Thanks Joe, Good point and great strategy.I also have been thinking of getting a partner or invester involved
and make the whole transaction a no money out of my pocket deal. 3 wins, PM wins, I win, partner wins.