Posted by Greg Meade on June 29, 2008 at 09:50:36:
I like the way you think!
I am sick of McMansions also. A very common dynamic her is to bulldoze a 3 year old 2500 sq, ft. mini mansion and build a 5400 sq. ft home in it’s place.
This is especially common on canals and lakes. What a waste…
Greg
What Will You Do Now? (Very Long) - Posted by Tony Colella
Posted by Tony Colella on June 26, 2008 at 11:26:10:
What will you do different in the coming economy?
We can all see many serious factors changing in our economy as well as the global economy. What we have done up until today may not work in the â??newâ?? economy (whatever that is). In times of great change, wealth changes hands and opportunities present themselves. The jobs we have today may soon be gone, as employers feel the crunch of higher fuel costs and the many tangent costs that will spawn there from. Employees are already beginning to feel the pinch of higher gas, utilities, food and much more. There is no â??EASYâ?? fix button for anyone to push. What we face will be prolonged and I believe painful for many if not most.
I read an article that the numbers of millionaires has increased and that the amount of wealth held by these millionaires has also increased. Depending on how they are invested, some of these millionaires will grow richer and others may fall from that status. Nonetheless, to me this reads that the gap between rich and middle class is growing larger while the second shoe for employees has yet to fall.
I believe we will see more and more folks seeking self-sustaining lifestyles of greater degrees. Article upon article I have read speaks about the large increase in home gardens already. Mass transit ridership has increased in many areas. Folks are already writing articles about having to move closer to the city so as to be able to afford the cost of commuting to work. The article I read spoke of the familyâ??s concern for the loss of their large suburban yard. I wanted to remind these folks that if they are feeling the pinch now, buying closer to the city may not be an affordable option. The real estate in most cities I know gets more costly the closer to the city you get.
Americanâ??s are starting to tinker with their own backyard remedies to alternative fuel solutions, everything from biofuels to hydrogen generators. â??American ingenuityâ?? may someday solve some of these problems but they wonâ??t solve them quickly I am afraid.
How does this affect our market and why I am writing this here? A good majority of the posters and lurkers here are folks who are working jobs that they may not even like now but come here in the hopes of finding financial freedom. I suspect that more and more folks will seek alternatives to traditional employment, as times get harder.
I donâ??t think we can afford to wait for times to get harder to begin the transformation to self-sustaining, financial independence. There are no quick fixes. The longer we wait, the longer it will be till we find solutions.
There are a lot of ways to make money in the mobile home arena. Lonnie deals, land/home deals, mobile home notes, small parks, large parks etc. are all good ways of creating an income stream that is outside of your job. If that job is eliminated (and many will be) you will have some independent income to fall back on. In some cases, you might even find financial independence through expense cutting measures such as living in a mobile home yourself for a while (it is after allâ?¦ affordable housing).
Mobile home investors offer affordable housing in a variety of ways but it is almost always â??affordable housingâ?? or low income housing that we cater to. As times get harder, there is a reasonable expectation of higher demand for affordable housing. This demand may increase slowly or be delayed by federal efforts such as the drop in the interest rates and the proposed legislation to bail out homeownerâ??s facing foreclosure, but I believe it will come.
As the economy constricts I think we will find that our market of $10 an hour (or less) type folks increases but their jobs will change and perhaps it will take two or more tenants working at that rate in part time jobs to make the rent but they may have no other choice. Federal benefits such as social security and disability income will remain a favorite of landlords such as myself as this income is stable despite the job market (and weather for that matter).
Larger mobile home park owners are facing new challenges in this economy. As I read it, many are having problems getting new homes moved into their parks unless they pay for them themselves. Gone are the days when mobile home dealerships would stock the park with new homes for sale.
As I understand it, owners of large mobile home parks in Florida are finding it difficult to offer homes for sale even with owner financing as other affordable alternatives present themselves to their market. Apparently the same type of folks that were financed by now defunct lenders are finding financing in other areas and lenders I guess. I suspect in time the federal bailout will run its course one way or another and these park owners will find the Lonnie deal and lease/option strategy to be as effective as they once were. Donâ??t get me wrong, I do believe there is a market for Lonnie dealers still; I am referring to large parks that need to bring in dozens if not hundreds of homes.
I know several investors here who own or control large parks who have had to resort to â??renting mobile homes,â?? which many of you may know is all but taboo for large parks. The reality is that they need the income to support the park and the increased investment in homes and infrastructure. Unless these parks can generate the income to run efficiently and a solution is found to bring homes into the parks, these parks will run their course and head to â??higher and best useâ?? status. This means that property will be used to build something else such as commercial property development or stick built type developments (everything from subdivisions, condoâ??s, apartments, mixed use etc.).
For those of us with land/home properties and small parks, I see great potential. By limiting the number of units we need to care for during hard times, we allow ourselves to focus on each home and property to cater to the market of highest demand.
Letâ??s say the â??GREENâ?? movement continues as I believe it will. What if you find yourself with a nice land/home package and for some reason it is not renting for what it used to or that you would like to increase the rent. What will you do differently to get it rented? Why not cater to the green movement and install a raised bed garden? Plumb some water lines to these beds for soaker hoses. Look into affordable green houses. Install compact florescent bulbs, buy higher efficiency appliances etc.
Many of the land/home properties are out in the county a bit. If zoning allows, why not create a mini-farm setting for the followers of the green movement to affordably realize their self-sufficient dreams. Remember, there are many degrees of self-sufficiency so you need not create a working dairy farm for them but perhaps a decent chicken coop, small barn and paddock for goats, good fencing etc. The possibilities are endless. One need only stop by the local farmers market or tailgate market (they are growing by the day it seems) to find out what would appeal to these folks. Get to know your market and create what they want. Remember the famous â??find a need and fill itâ?? motto and attack it with a (profitable) vengeance.
If all else fails, maybe we start collecting rent in chickens (letâ??s hope it does not come to that) but at least our tenants will be the ones who can pay!
Folks we are going to share these ideas and many more in our August boot camp here in Asheville, NC. Please take advantage of the early registration discount by emailing Lisa before July 1st. And no, we are not yet taking chickens in exchange for attendance, that may come next year.
To register, email Lisa at
For more detailed info on the boot camp, click copy and paste this link into your browser.
http://www.creonline.com/mobile-homes/land-home-bootcamp.html
Tony Colella
Re: What Will You Do Now? (Very Long) - Posted by Don -TX
Posted by Don -TX on June 27, 2008 at 07:17:08:
Really great articles,and response, Tony and Greg. The current situation has been worrying me, and freezing my plans.
Sorry I can’t make NC, just no way to get loose, but I did buy all the courses and enjoying the lessons. Thanks!
Very , very well thought out Tony… - Posted by Greg Meade
Posted by Greg Meade on June 26, 2008 at 13:48:53:
I really liked this:
For those of us with land/home properties and small parks, I see great potential. By limiting the number of units we need to care for during hard times, we allow ourselves to focus on each home and property to cater to the market of highest demand.
I absolutely believe this to be true. Like a lot of investors on this and MHU I have tried to think out of the box. a suggestion AnneND stated many years ago, she was able to find a niche of almost perfect tenants in pet owners. This is a huge market that is almost always refused rentals because of their critters. I have found by and large that these folks take better care of their pets than the majority of my tenant base takes care of their kids! I have used this niche to great effect the last 4 months and these pet owners are becoming my best payors. I have found they do NOT mind 500 pet deposits.
We are seeing huge increases in small raised bed gardens here in FL.
We are close to finishing a L/H and I am probably going to do a small 10 X 10 garden bed with water. What will it cost? 4 2X10 PT, handful of 3" screws, 1/2 yard of topsoil, 30 bucks worth of 3/4 poly pipe and 25 bucks of soaker line? maybe 250 bucks? Great idea. A very small improvement can sell a home in this market.
Tony, i think the investors that will do well in this market will have some of these traits:
I could be all wet, but I feel this will get worse before it gets better. I hope I am wrong
Thank you for the post Tony…
Greg
Re: Very , very well thought out Tony… - Posted by Sailor
Posted by Sailor on June 27, 2008 at 19:14:02:
I agree w/you Greg about the virtue of living frugally (grandchildren & fabric don’t count). Burning one’s home mortgage should be a major priority, & it is probably the biggest reason we were able to retire years ago. Even when we were young & poor, w/me still in school, we had a 15 yr. mortgage. (Do the math–it’s a no-brainer.) No matter the length of a mortgage, extra paid on principal each & every month (even $5 makes a difference) w/set you free years sooner.
Frugal is F-U-N; just make certain your partner is on board for the lifestyle. Yes, my recent $659 rebate from Lowe’s was a real windfall, but I think it tickled me just as much to find a $1 bridal gown for our dress-up closet. Sometimes Rocket Man grouses that he’s not sure he can afford for me to $ave him so much money!
BTW, now through 7 July, Lowe’s is offering a 10% discount to active & retired military. This can be a significant $avings, so I try to plan my kitchen/bath rehab purchases around Memorial Day, 4th of July & Veteran’s Day. I take my military dependent DGD shopping w/me for the discount.
Just a tiny quibble w/you, Greg on #4. Until recently I didn’t think the economic news was grim enough. Many of the news stories were originating from gov’t or the RE industry PR machines, & the forecasts were much too optimistic. Now the media is having a good time wallowing in dire statistics, when they are missing good stories about how folks are adapting (or not).
One of the changes I hope to see is the building of fewer McMansions, which I see in many cases as wasteful of resources. I’d much rather see better design than greater square footage. Do we really need more bathrooms than bedrooms? Bring back eat-in kitchens & generous built-in storage & we won’t need to build so many different rooms. Site a building in the right direction & we won’t use nearly as much energy.
I’ve found that my tenants are really excited to live n an affordable 14 X 65 2/2 or 3/2 if it is clean & most of the kitchen knobs match. If I add laminate floors, $3 blinds, & a lace curtain in the master, folks fall in love w/my trailers. I don’t think for a minute that these aren’t good places to raise families. A little bit of HGTV is a good thing, but our housing expectations have become far too high. Going into debt for expensive kitchen & bath re-dos have gotten a lot of families into trouble.
I don’t think folks all have to be self-sufficient or live in trailers, but I think in more ways than one that our RE values have become distorted. The pendulum usually swings, so I’ve got my fingers crossed that when all the dust clears we w/have corrected not only our finances, but our style of living. No, I’m not saying that we can’t have nice things–just that a bit less house bling might allow parents to provide a higher quality of family experience.
Oh well, off my soapbox–
Tye