Posted by JO on July 01, 2011 at 18:28:56:
Okay, I get your message!! Well I am really glad to have put the questions out there. Thanks, everyone, for your help. While everyone says you gotta just get out there and get in the game, it is clear that I am not ready! Thanks for saving me from a stupid move! JO
Is a 43 year old MH too old? - Posted by JO
Posted by JO on June 29, 2011 at 20:36:38:
Is a 43 year old MH 2/1 on nice lot in park too old to consider buying? Tub
faucet leaks behind wall into tub and needs new bathroom flooring and probably
sink. Is dated but not in bad shape. Added mudrooms on entryways. 10 x 10
Shed with lawnmower, ladder,tools. Appliances. Pitched, shingled roof with moss
on 1/2 of it. Some small stains on ceiling but no signs of recent leaking. I have
read both of Lonnie’s books but second guess myself on whether my judgement
is right. Said lowest would take is $7,000. There is a $510 fee from park to buy
even if not living there. Not sure about age and price-whether this is a deal or
not. (Not sure what the price of a current deal would be since Lonnie’s books
were written quite a while ago.) Any help would be appreciated. I have yet to
make my first deal. Thank you.
Re: Is a 43 year old MH too old? - Posted by Dave (WI)
Posted by Dave (WI) on June 30, 2011 at 08:13:48:
Jo,
I’ve sold a couple homes this old and I would have jumped for joy if I could have gotten $7,000.00 for them. I paid $650.00 for one of them and $1500.00 for the other, sold them both for $5,000.00 each, which was a pretty good price. You have to look at the homes around it, how old they are and see if you can find out what they have been selling for. I would imagine it isn’t anywhere near what the seller is asking. As Phil said, they have to sell, you don’t have to buy so give them a card and let them call you when they realize they have their head in the clouds.
Dave
Re: Is a 43 year old MH too old? - Posted by Phil-TX
Posted by Phil-TX on June 30, 2011 at 07:28:09:
“Not sure about age and price-whether this is a deal or
not” indicates you need to gather more information
about your market. Then you will be better prepared to
know whether it is a deal or not.
The questions you are asking yourself about price and
age indicate there is something inside you raising
doubts. Listen to yourself and heed the doubts until
you can overcome them with objective data. The doubts
you are having would be the same doubts your future
buyer would have, not to mention dealing with the
park’s price to play. Be very careful here. You may
have a hard time re-selling this old trailer. Will the
park let you rent it out and if so, will it rent and
for how much?
Is the seller living there? $7000 sounds real steep to
me in this day and time. Remember Lonnie. Don’t
mention a price. They need to sell, you don’t have to
buy. Wish them good luck and leave a card. Maybe
they’ll call you later after you have more knowledge
and will know at what price you would “pull the
trigger”.
Re: Is a 43 year old MH too old? - Posted by Auctioneer
Posted by Auctioneer on June 30, 2011 at 02:09:13:
What’s so unusual about the park and location that justifies a $510 transfer fee from the park and a $7k price tag?
Re: Is a 43 year old MH too old? - Posted by JO
Posted by JO on June 30, 2011 at 18:31:41:
Thank you to all of you who have replied. The home next to it, also very old and apparently in worse shape just sold. They were asking a firm 5K for it. Don’t know what it went for. Well, I am very new at this and anxious to have a successful deal but don’t want to do something stupid. It seems that most newer homes around here are for sale at prices maybe around 27K and go up from there with many in the mid 30’s. There is 1998 in same park for sale for 36K (2/2 14x60). The park is very careful about who they let live there and I suppose this is why the steep entrance fee. It is by no means a luxury park, though it is near a nice coastal town. Again, I really appreciate all of your feedback as I am learning this game. JO
Re: Is a 43 year old MH too old? - Posted by Auctioneer
Posted by Auctioneer on July 01, 2011 at 05:34:40:
Your welcome for my reply of course. And please take this as constructive!!! The fact that you failed to mention in the original post that the park was in a coastal town tells me that you are not quite ready to jump in. It is likely a very rare park as parks for Single Wides (SW) have been all but zoned out of existance in coastal towns and that explains the entrance fees. It could be that if this mobile Home were ever moved out another could not be moved in. Situations vary from area to area depending on how the local govt wrote things.
This by no means makes it a good deal for you the investor. You do not know enough yet to determine that but you are on the right track. Keep looking and learning. You need to find out if the park will let you as the owner rent a trailer. Learn what the reasonable expected rent would be by asking around (Seller will fluff it). Also learn rental rates outside the park. Learn the supply and demand of your area. Is there a shortage of rentals or renters.
Now back to the subject MH. I don’t know your area. 7k may be a fair deal but even in a coastal town that seems high for a 40 plus year old trailer. Do some snooping and find out what others have sold for.
Feel free to come back here. I wish I had a forum like this when I was first starting out. If you’re serious about it we will hear from you again.
All the Best!!!
Karl
Re: Is a 43 year old MH too old? - Posted by JO
Posted by JO on July 01, 2011 at 06:17:42:
Thank you, Karl. You are right that the home cannot be rented nor moved according to park rules. My intention was to sell it and finance it. I am really grateful for all feedback. It is all part of my education. How do I find out the supply and demand for renters/buyers? JO
That’s a very good but loaded question!!! - Posted by Auctioneer
Posted by Auctioneer on July 02, 2011 at 05:25:27:
Jo, It’s a bit of a “Catch 22” that you will have to work through as a young investor. The best way to learn supply and demand in your area is by jumping in yet we are telling you that you are not ready. Don’t get discouraged but instead get determined. Remember that if it were easy everyone would be doing it. Another thing to note is that each one of us that offers a reply come from different areas with different laws. Eaxh of us have different objectives and methods and that does not in and of itself make one more right or more wrong. All situations and individuals have different variables to plug in to the equation. So our experience is what we offer you.
I say all this because I am telling you to get out there and act like you have a practice investment account and ask questions and seek opportunities. But I caution you of people with agenda’s that want to take you under the wing, so to speak. Always ask what’s in it for them, do they have something to sell you or rather unload on you.
One of the reason’s I like this forum is that we don’t know where you are and likely don’t have an agenda because we have nothing to gain by dupping you. Real Estate investing (mobile homes are an extension of Real Est. investing) is a very localized game. You must know your area and/or the area you are buying. For Example: Back in the hey days I have witnessed several occasions where condo’s being sold to New Yorkers at New Yorker prices in the college towns where prices should have been much less. The New Yorkers were operating off their areas pricing for similar condo’s and thought they were buying bargains but they were actually inflated prices that tumbled once the complex was sold out and the new owners had to rely on locals to resell to. My point is get to know your area and start small which minimizes the damage from making a mistake. Trust me, we all have made them but we learn from them and bounce back.
Back to the original post. The reason the park has a rule that the trailer cannot be moved is likely that once the trailer is moved out the owner of the park cannot move another mobile home in and he loses that space as a park. The reason for no renters is more obvious and I have that rule at my MHP. Personally, I do not like to own the mobile itself but prefer owning the dirt under the mobile. Old mobile can be high maintenance. I will buy them from owners in my MHP and resell for a profit and I do have one in another park that I bought individual lots in at a Bankruptcy Auction. I moved a mobile on one of the lots and it turns out I’ve had trouble selling so I am going to rent it. Do you see how I even have to adjust to the market? The market will not adjust to me.
Lastly, you mentioned buy and sell by financing. I like that style but the game is currently being changed by our Fed. and State Gov’t. Google your state and the “Safe Act” which was the Fed. Gov’ts way of mandating that states put controls on unlicensed owner financing of nearly anything. My state currently allows upto 5 owner finance deals a year by an individual (NO Corps, partnerships, trusts, etc) and that is subject to change as the Fed clarifies it’s mandate to the states.
Assuming you are ok to do an owner finance I shall continue but again research this for your situation.\
I digress - Buy low sell high because the interest rate you will likely charge is not enough to justify your efforts. I think Lonnie’s first book had a theory to shoot for: buy at a 10% discount and sell at a 10% premium because you are willing to finance it at a 10% interest rate. I find those number to be a bit low to justify my efforts but you get the point.
Keep reading, learning, you will get there!!!
weird - Posted by Steve-WA
Posted by Steve-WA on July 01, 2011 at 12:04:03:
cannot be moved by park rules? A fee for buying a home?
This sounds like the park is taking people for a ride. If you buy a MH, and it is YOURS, who’s to say you cannot move it out of the park? Bullspit.
$500+ just because? Heck, I wish I could do that . . . as a matter of fact, I will. Be it known to all present here at the CRE MH forum, that I now charge a $100 fee for reading this post. Please submit through the senior board moderator.
JO, you are getting JO’d. Find another park.
Oh, and that is WAAAAAAY too much to spend for this MH, unless its one of those on-the-beach, exclusive parks like in CA or FL.