Posted by Tim(NC) on December 27, 2005 at 15:29:16:
Hi Ryan,
The things I don’t know fill libraries. I have learned a few things about mobile homes this past year from the couple deals I’ve done.
1.) After each mobile home is under contract, take time to review to determine the part of your business that needs the most improvement.
2.) A daily advertisement listing the amount down and the monthly payment is much more effective at making the phone ring than “negotiable financing”.
3.) There isn’t anyone outside this board that believe trailers can be a good investment. This is fine by me because with all the “We Buy Houses” signs, I want to be where there is less (no) competition.
4.) Buying the first trailer is hardest. It isn’t necessary to hit a home run the first time to the plate, base hits are ok while learning the business. My first trailer sold will give a 25% return while the second will give a 40% return. These aren’t eye popping returns that will earn me a “Success Story” but they are good enough to stay in the game.
My goal for next year is to simply: 1.)Increase my cashflow from Trailers by $1K per month 2.)Get mobile home dealers license.
Posted by Ryan(NC) on December 27, 2005 at 08:03:05:
This has been an incredibly exciting year for my family and I?d like to exchange ideas and lessons that have been learned by others on the board this year. Here?s our biggest lessons learned this year?
Knowing pretty much what a unit will go for financed or rented in the open market before you try to swing a deal gives you the freedom to spot a deal and jump on it faster without getting caught up in trying to figure out if you should do the deal while someone else buys it out from under you.
Keep it simple and stick to a minimum yield that you want. If you want 80% minimum, run your numbers backwards and your calculator will tell you what your MAX purchase price can be. I.e. PMT=Going MH Rental Rate less lot rent, FV=0, I/YR=Minimum Yeild, N=Est. Note Term, then press PV to get max purchase price.
What you see vs. selling price means everything, in most cases a coat of paint and cleaning the windows will increase the value of a home dollar for dollar more than ripping out the floor coverings and making the home look like new again.
Great deals are negotiated not found, very few if any deals will land in your lap at asking prices! You must give the seller time to warm up and start to like you so they?ll share why they are selling and their circumstances so that you can fix their problem with the least amount of cash as possible.
Paying an extra 1000 or so for a nicer unit that needs no work will more than be made up for in the time that it takes to rehab a unit and get it occupied, this is especially important when you have a job and are trying to manage it and investing at the same time.
Getting to the events to network and learn from others experiences is way more valuable than the few hours pay you?d earn from a JOB, that?s why they make vacation time!
Keep a buy type ad running so that you get first dibs on the good deals that come from people browsing ads trying to set a price for their home? ours is ?WANTED: 2 or 3 bedroom singlewide in decent condition, must be reasonable. Will pay cash (xxx)xxx-xxx?
Keep on the PM?s good side and do what you say and they?ll toss deals your way if you can make their life easier.
Never let yourself come across as a hotshot to a seller or you can kiss the deal goodbye, you are there to help them but it has to be on terms that will work for both of you or there is nothing that you can do.
Action = Reward, For those of you that are sitting on the sidelines nothing will come from reading post and buying every investment book published. You must get face to face with some sellers to make 2006 great!