What Say You - Posted by Lonnie

Posted by Greg Meade on July 04, 2008 at 18:54:28:

I am seeing some real lot bargains in one of my favorite areas. Paved roads, premier school district, fully improved except power pedestals.

A local MH dealer had 70+ put in and in 2004 was selling mid lots for 30K, corner lots for 34K. The bottom fell out in 2006 and there are 42 lots left. We are interested in 30 of these lots and set up an appt to talk to the Dealer.

At this mmet, we listened and did little talking…he stated he would sell for 20K cash each per lot, but he wanted a “package deal”. I asked why he was selling and not holding on and he honestly told me it was the property taxes that were killing him (they average 400 per year per lot) and he wanted cash to do other things.

After sleeping on it, we decided to offer an Option with a 10K Option Consideration for 13K each. We pay taxes on these lots as part of this Option. Prices rise we excercise, they stay flat we lose our 10K and approx 25K in property taxes paid.

Worse cse scenario we lose 35K. best case scenario we gross about 550K profit.

We have a L/H coming on line that will give us the cash to bank 35K for this… He will not extend 2 year term or 10K OC…he wanted more OC and less term.

We believe in affordable housing also, we just want to limit risk until we fully understand the depth of this correction. If the market has corrected and we can begin to sell L/H’s for a decent return we can come up with the Excercise Money (private money).

Can you think of a better, less risk scenario for us, we meet with Seller attorney on Tuesday.

Great post Lonnie, my best to Joanne!

Greg Meade

What Say You - Posted by Lonnie

Posted by Lonnie on July 04, 2008 at 12:17:11:

Is This Still A Good Business?

Is used mobile homes and parks still a good business to be in considering todayâ??s market and the present economy? What would you do different if you were starting out today? These are a couple of questions Iâ??ve been asked this week. So let me address them.

The older mobile homes and mobile home parks are still one of the best income producing businesses I know of. And regardless what shape the economy is in, people still need affordable housing. Especially in todayâ??s market with OPEC holding us hostage with $4 + gasâ?¦and rising.

But regardless what the evening news, or the bureaucrats would have us believe about the economy (good or bad), there has always been, and always will be, a huge number of people who will live in a self imposed state of, recession, depression, melt-down, slow-down, or whatever the present buzz word happens to be. But these people still need affordable housing. And whatâ??s more affordable than a used mobile home with affordable lot rent? Affordability is the key.

Iâ??ve said it for years and still doâ?¦mobile home parks are the nearest thing to a gold mine I know of. And even more so today. Especially since the bureaucrats and local governments make it almost impossible for anyone to develop a new park. So that makes the existing parks even more valuable.

Think about it. If you buy an existing park today, your government and your elected officials are preventing any competition by not allowing any new parks to be developed. Isnâ??t that nice of them? So why not benefit from their stupid rules?

I bought my first rental property in 1971. (Wow! If time flies when youâ??re having fun, I must have had one hellva good time in all those years). In hindsight, if I had known then what I know now, I would have bought every park I could. And Iâ??m willing to bet that I would have done much less work, and have a bigger net-worth today. But like many of you, back then I didnâ??t know what I didnâ??t know.

The older mobile homes and mobile home parks have proven to be a business thatâ??s not affected by the stock market, or world events. The people who buy/rent your $5,000-$10,000 mobile homes, and/or pay lot rent, donâ??t invest in the stock market. They wouldnâ??t know the difference between a bull market, and a bear market. (I donâ??t either. And couldnâ??t care less).

The majority of the people who buy or rent your used home earn enough to pay $200-$300 payments. But they will never be able to pay cash, or qualify for a bank loan. These are people who learned how to work for money, but never learned how to make money work for them. Yet, these are the very type people who can make you richâ?¦one little deal at a time.

Some of you know about the little 29 space park my daughter, Janet, bought 15 years ago. (If not, read about it in Deals On Wheels, available on this site). Janet made her final payment on that little gold mine two months ago. Now, do the math and see if you would like to be in her position. (And you can. Just do what she did.)

Gross rents at full occupancy (round numbers) $112,500. Total expenses less than 20%…$22,500. Annual NET income (before taxes) â?¦$90,000.(Vacancies have been less than 2% and wasnâ??t included). Now, show me a better retirement plan than what Janet has. Would you like to learn how to start your retirement plan with a mobile home park?

A 74 old man called me recently asking for advice. Heâ??s living on a social security check, and working a part time job to survive. Heâ??s been a renter for 54 years, doesnâ??t even own his own home. He spent all those years working for a pay-check, and never took time to learn anything about money. Now, at the age of 74, heâ??s asking for financial advice. What would you advise this man to do at this stage of his life? Why didnâ??t he show an interest and ask someone 50 years ago? Folks, look around. Do you know anyone like this man? Is there a possibility that YOU may be walking in this manâ??s footsteps? If so, I hope you will consider this a wake up call.

Now I have a question for you. If your cost of living increased $200 per month, would you have to cut out something in order to live with that $200 monthly cost of living increase? Or would you be able to increase your income $200 monthly? What if you could sell or rent a mobile home with $200 monthly payments. If so, your cost of living increase is solved.

Letâ??s use Janetâ??s park as a good example of how to fight inflation, or cost of living increases. She increases her lot rents at least $10 per month every year. That works out to $290 monthly, or $3,480. Janet has control of her financial future. But what does a person working a JOB do? What control do they have?

Educationâ?¦the right education, is the key to financial security. And itâ??s not an expense, itâ??s an investmentâ?¦an investment in yourself. You can pay for it now, or you can pay for it when you reach 74. Paying now is much better.

Tony and Scott will be teaching you the right education at their Boot Camp in August. If retiring on Social Security (if itâ??s still around) doesnâ??t excite you, then let Tony & Scott show you how to set up your retirement plan with parks & mobile homes. They have both â??been there, done that, still doing thatâ??. They teach from hands on experiencesâ?¦no fluff or BS. They teach what they do.

About 50 people will choose to be at Tony & Scottâ??s Boot Camp & learn how to become financially independent with mobile homes & parks. Will you be one of them? If so, you need to get your seat reserved now while there are still seats available. Joanne & I look forward to seeing you next month.

To your wealth,


How about some feed-back, folks. Tell us how the present economy has affected your lifestyle, or your business? Are you finding more opportunities, or less? Are you making more money, or less money? Any tips, ideas, suggestions, etc? When we all share, we all learn

If you do the same thing this year as you did last year, where will you be next year?

Re: What Say You - Posted by Darrell

Posted by Darrell on July 17, 2008 at 08:23:55:

I looked for several years on MHPS.com and loopnet
for a park. I found one I could afford on MHPS.com and bought it. Right after that I found a 73 space park listed by residential real estate agents on a residential MLS ( not on Loopnet or MHPS.com). Suffice to say I got a much better deal on park # 2.
Finding the right park takes patience , education, due diligence and the willingness to look outside conventional channels.

Re: What Say You - Posted by Don-NY

Posted by Don-NY on July 06, 2008 at 13:46:05:

Lonnie You’re so right as usual. When I posted “the future of Mh parks” I was looking for some feedback from around the country from people in the business. It seems to have triggered a lot of honest and personally revealing posts. The posts that have come from it have been very enlightening. My Wife Karen and I are attending The boot camp. And We look very forward to meeting you there. I think the parks in my area will have substantial price corrections in the next several months. And We will be ready with cash/financing to take advantage if it happens.
Don & Karen Whiteside

Re:My thoughts - Posted by Bill Rumer

Posted by Bill Rumer on July 06, 2008 at 06:13:57:

I rarely post, but read the boards everyday.
This is a good post and a good subject, along the lines
of one on the other MH site.
There is no question there will always be a need for affordable housing, and I think the tenant base will increase every year. However with the huge inventory of stick built houses available, that the builders/ speculators can’t sell, they have to resort to renting.
Some of the park owners who post on these boards have already seen some of their good tenants move to houses because of the rents being comparable.
This brings me to the point that when you run the numbers for the unit you intend to sell/lease (monthly payments) then throw in lot rent, it is becoming harder to compete with apt/house rentals, and will be until the present inventory is exhausted.
To the point that penny was broaching, Price of Parks.In my opinion the prices of parks on the market are way to high to make the #'s work.For instance about 2 yrs ago I bought a 32 space/ 15 ac turnaround park, and I do mean turnaround.I feel I bought it right, however it would not cash flow in its then condition.There were many vacant spaces.This park is in central SC, one of the easiest counties to work in.But when you buy,move ,setup and nicely refurbish a late model repo you have $15000 in it.So if you have many vacancies you had better have deep pockets or access to reasonable money. You say well I’ll just sell the note and continue on down the road.I was selling S/W for 22500 @ 12% w 1500-2000 dn. If you discount that note to 18% you just about break even. True you keep the dn pmt and any payments made before you can find a buyer @ 18% . I was fortunate enough to be able to do this out of pocket. I later found a buyer for the park who liked my model,plan for the park and its present condition ( presentation)He bought the park and notes ,all cash.
In closing any of you folks looking for a park and find one with a lot of vacancies, you had better have a LOT OF MONEY lined up.
Lets keep this thread moving and here some more opinions.

Bill Rumer

Re: What Say You - Posted by Penny Myers

Posted by Penny Myers on July 05, 2008 at 18:28:02:

Hey Lonnie~
Pleasure talking with you the other day and we’re looking forward to meeting you at the Boot Camp. Got your books in record time and I am already about half way through Deals on Wheels.

As I mentioned on the phone, we’re in the Wilmington NC area. Been here about four years after quitting our Ohio corporate JOBS and going head first into flipping SFRs, a few rentals and now strictly doing lease options as our exit strategy. It’s been good to us…but rehabbing houses is back breaking work especially since we’re pretty much hands on rehabbers. Plus we recognized that every time we sold a house, we could no longer make any money on it. So we adjusted strategies yet again and now (thanks to the education we got from Dyches)we owner finance our tenant buyers at the end of their option term. But again, as good as all that is - we still have to rehab a house to get the gains.

We started exploring the idea of mobile homes and parks since affordable housing is non existent in our coastal area - but here’s my question to you and everyone else - are there any deals on parks? The prices they ask around here for parks are insane - the income doesn’t support what they’r asking. And it seems like anywhere you go the demand and lack of supply would drive the cost of parks way up. Are we getting in the game at a good time? I know we are in terms of there being demand from renters, etc…but can any real deals be found on parks? And if so, how do you ferret out the really good deals?