Posted by Dan (MD) on June 03, 2003 at 19:16:19:
This is my first double wide as well…I’m asking 22,000 cash for it and I’ll probably finance it for somewhere around 25k…I did have to move it though and I haven’t got the bill yet (expecting around 3k for the move)
I have two people filling out credit apps (or they say they are going to anyway…I think my clients will be a little more responsible than my typical ones) Hopefully
Dan
Hi, I’ve got plenty of questions… - Posted by Russ (Wi)
Posted by Russ (Wi) on May 31, 2003 at 16:29:25:
Hi, I’ve been checking in and reading this board for a couple of months now. I have spent quite a while looking for rental properties that will postive cash flow but most everything I’ve found just doesn’t seem to be a worthwhile deal when I crunch the numbers, and for the few that I have found they were larger multi-unit deals that I am not comfortable with without having some more experience in the field.
So, after stumbling onto this site I’ve started considering the MH route. The lower cost for buy-in is appealing (spreading cash over multiple investments to mitigate dangers of loss due to stupid mistakes!), and some of the returns people are talking about are certainly attractive, along with the elimination of landlord requirements!
I planning to order both of Lonnie’s books this week. From reading the board I have a good “idea” as to how this works, but I’m going to ask a bunch of questions to make sure I’m not making assumptions that are incorrect. Feel free to answer one, two, all, or none of my questions :o)
Bear with me for the following questions in that I know “typical” is a silly word, but I hope you understand the goal of my question (I don’t want reports of your best deals ever, just your normal/average deal)…
How many people do you talk to for each seller you find?
How many people do you talk to for each buyer that you find?
What’s been the most effective way for you to locate sellers?
What is the typical buy price?
What is the typical sell price?
What are the typical terms on the sale?
What is the typical time spread between buy and sell?
what is the typical amount of time you invest to complete each sales cycle?
How many deals do you complete per year?
What type of business entity do you use to complete your MH deals and why?
What is the biggest challenge you face in completing MH deals?
What is the biggest mistake that you have ever made?
If anyone here is local to Wisconsin, can you comment on the requirements in this state for MH specific real estate transactions and the financing of MH sales?
Thank you for your time.
-Russ
Re: Hi, I’ve got plenty of questions… - Posted by Dan (MD)
Posted by Dan (MD) on May 31, 2003 at 21:28:00:
Russ,
How many people do you talk to for each seller you find? I’ve bought 5 homes and looked at about 20
How many people do you talk to for each buyer that you find? 9 out of 10 want to buy, 1 out of 10 passes the credit check
What’s been the most effective way for you to locate sellers? Park Managers, word of mouth
What is the typical buy price? $900 - $2500 for single wides, $3300 to $5000 for doubles
What is the typical sell price? $7000 - $14000 for single wides, $22,000 - $28,000 for doubles
What are the typical terms on the sale? 12.75%, VERY LITTLE DOWN unfortunately, about $500 down $220-$320/ month for singles and $1500 down, $500-$600/month for the doubles
What is the typical time spread between buy and sell? 2 months…you gotta figure that in for the lot rent
what is the typical amount of time you invest to complete each sales cycle? I’ve been rebuilding too much lately, the last one took 3 weeks of nights and weekends, just to get it in sellable condition.
How many deals do you complete per year? 6 so for this year (only sold 4 of em so far)…part time only
What type of business entity do you use to complete your MH deals and why? I formed an LLC, in Maryland, I can file as an S Corp even though I’m an LLC…plus the paperwork is much easier…I paid a lawfirm to form it…$350 for the paperwork, $130 for the filing…ouch
What is the biggest challenge you face in completing MH deals? Finding credit worthy buyers.
What is the biggest mistake that you have ever made? Paying too much because I wanted to have another home
Hope this helps out
Dan
Re: Hi, I’ve got plenty of questions… - Posted by Dr. B (OH)
Posted by Dr. B (OH) on May 31, 2003 at 20:05:02:
Russ, I’ll answer these from my 7-deal experience.
How many people do you talk to for each seller you find? Three.
How many people do you talk to for each buyer that you find? Twenty plus.
What’s been the most effective way for you to locate sellers? Park Managers, Repos
What is the typical buy price? $3,000
What is the typical sell price? $9-12K
What are the typical terms on the sale? $1K down $249-349/mo.
What is the typical time spread between buy and sell? 1-3mos.
what is the typical amount of time you invest to complete each sales cycle? 30 hrs. (1.5 hr. round trip plus rehab)
How many deals do you complete per year? 7 in past 7 mos.
What type of business entity do you use to complete your MH deals and why? LLC, on-line registration $125
What is the biggest challenge you face in completing MH deals? Finding buyers
What is the biggest mistake that you have ever made? paid $10.5k for a 2000 model 14 X 70 3BR 1.5 BA, tried to sell for $15-16K outright for 6 mos (lots of lot rent). Finally gave up and sold for $19.5 with $1000 down @ 10%, $347/mo.-good nuff.
There you go.
Steve
Re: Hi, I’ve got plenty of questions… - Posted by Anne_ND`
Posted by Anne_ND` on May 31, 2003 at 20:01:41:
Russ,
You are unlikely to get anyone to answer all or even a fraction of your questions because much of what you seek is either specific to your market (you will have to do the footwork to find the answers) or can be found in the archives with a little work.
Lonnie’s books will give you much of the ‘typical’ parameters, and I suggest you adhere as closely to what he does as possible.
To give you a little info, I’ve bought six MHs since Feb. I’ve sold one and today got a signed purchase agreement with earnest money payment this morning on another. For me, buying has been easy (price varied from $0 to $4950), but selling has been more of a challenge. The two I sold were $14,000 and $10,900. One of my nicer homes has been on the market for 2 months. I’m asking too much for my homes, and future ones will have less rehab work done on them, so I can sell them more cheaply.
I am doing this full time, my goal for 2003 is 30 Lonnie deals. I had significant experience in real estate (single family homes rehabbing and property management) before starting the MH biz, and already had investors and contractors lined up before buying (i.e., it might take you longer if you are new to CREI).
Five of the trailers I bought came from talking to two Park Managers. The sixth came from someone I was already buying MH notes from. My first buyer also came from a PM and had excellent credit. I’m finding that that is an anomoly. I’ve had quite a few other applicants to buy my trailers, but they either did not pass my credit check or the PM’s credit check.
My biggest mistake was waiting 3 years after buying Lonnie’s books before buying MHs. If you’re going to do this seriously, do buy John Hyre’s Quick Books course, it will easily save you the cost of the course on your first deal.
good luck,
Anne
Re: Hi, I’ve got plenty of questions… - Posted by Brian,WI
Posted by Brian,WI on May 31, 2003 at 18:47:21:
Russ,
Where is Wisconsin are you?
We have an investment club in Milwaukee and have a meeting Tuesday night if you are interested.
I’ve only done 1 Lonnie Deal, so I’ll leave you questions to someone else.
Brian,WI
Re: Hi, I’ve got plenty of questions… - Posted by Phil Pelletier
Posted by Phil Pelletier on June 02, 2003 at 03:03:58:
Deadnuts on target, Dan. I have very little to add to your advice. I will say that as you buy homes and expose yourself to new deals, you come up with new ways to buy better homes for less money. You learn that to have the patience of DEATH is an advantage in this business. If the deal is not right, walk away. If the deal GETS right, it will find you again.
Nice post, Dan. How did things go with your $5,000 doublewide?
Phil Pelletier
PS- I offered a bank $3,000 for an 88 doublewide in a park I work frequently. They took it without blinking. However, because i made the offer “subject to inspection”, I actually found some water damage and some black mold (long since dead after sitting there for two years), but I took pictures of the black mold and sent them the photos. Then I sent them a re-offer of $100, and I told them I would pay June’s rent.
I won’t pay a DIME more than the bank will sell it for on their worst day. I’ll keep you posted.
Thank you - Posted by Russ (Wi)
Posted by Russ (Wi) on May 31, 2003 at 20:49:10:
Thanks for the fast and informative response Steve!
thanks - Posted by Russ (Wi)
Posted by Russ (Wi) on May 31, 2003 at 20:50:51:
Thanks for the info Anne.
It’s very helpful to hear about your experiences.
Phil…you’re going to love this - Posted by Dan (MD)
Posted by Dan (MD) on June 02, 2003 at 20:37:20:
So I was upset at the 5k price right? well you said to come up with a creative way to pay less…well I simply told the guy that I was only willing to pay him $3300, he wasn’t happy but he signed a new contract on the spot…he was the definition of “Desperate Seller” so he took what he could and I was much happier with 3300, though the move is starting to get expensive, we started out at $2500 I do the inside work and remove and install the skirting, but there were no axles, so 500 bucks later it’s on the road today and getting blocked tomorrow. I did get a free months lot rent from the park I’m putting it in…(you should have seen the PM’s eyes light up when I showed her the picture of the place, hopefully I’ll get her to start paying for part of the moves in the future) anyway, it’ll be ready to go tuesday. I need to plywood the dining room and put new carpet in there and in the living room…thats it…
I showed it to a lady before it got moved, not cleaned up or anything and she’s willing to pay 1500 down and 600 a month…I’d like more down of course, but 600 a month won’t hurt. If she qualifies, I’ll have my investment back in 10 months and I’ll have anywhere from 38 to 44 months passive income 
You gotta love this stuff
Dan
PS even got my wife over on my side now, though she’s unhappy with the amount of time I’m putting in to this
Good Advice - Posted by GG(GA)
Posted by GG(GA) on June 02, 2003 at 14:32:21:
Thanks for the advice about your offer, etc. That’s a piece of copy and paste info. I copy good ideas things onto a spreadsheet and arrange it in order of what it pertains to. It helps maintain a healthy business and why shouldn’t I learn from others. Could turn out to be cheaper than learning on my own.
Good luck with your purchase.
Re: Phil…you’re going to love this - Posted by adam
Posted by adam on June 03, 2003 at 18:20:33:
Dan,
It took me awhile to get my wife to join me in this endeavor also. 5 deals later and she’s now selling all of our homes herself while I’m out there working as the buyer.
We’ve done about 25 deals after starting January 2002 and our numbers are almost identical to yours.
We usually sell for at least 3-4 times what we buy for and we always make sure that our initial investment is returned by the end of year one of the financing. Also, I’ve found that the buyers aren’t really blinking an eye at 14% or higher interest rates because several of the local parks here are charging 19-24% interest (Indiana doesn’t have a usuary law that I’m aware of.) I know Lonnie likes the 12.75% rate, which is perfectly fine also. I usually just figure out an even dollar amount for them to pay each month, and I usually round that dollar amount up which increases the interest rate somewhat.
I’ve never bought a doublewide yet and was curious if you have found them easier to sell. I just haven’t found one at the right price. What was your total sell price on the one you bought for $3300?
Thanks.
Keep up the great returns!
Adam in Indy