Need advice on how to find a good contractor for MH fix-up


#1

Hi All,

Here is a rookie question I need your inputs, thanks a lot in advance!

I might get into a “free MH & free lot rent before occupancy” deal from a PM. The home needs some work. Before I jump into any agreement with him, I need to get a good rehabbing cost estimate. Now my question is how to locate a good MH-specialized contractor. I got one referral from this PM and had the guy come to give me the first estimate. He seems pretty reasonable but I would like to get a second or more opinions from other contractors. One concern I have with this guy is that he does not have a license. He told me he is going to get one pretty soon. What is the drawback of using a non-licensed contract for MH renovation?

Best,

Nic


#2

Hi Nicole,

In many markets there are contractors who specialize in MH work. Initially, I had the good luck to find one with liability insurance (with my own insurer). If you use an uninsured/unlicensed contractor and they do work that later proves flawed (I’m thinking primarily electrical and gas), and heaven forbid, causes a fire in which someone gets hurt, you COULD be liable.

Word on the street will help you determine who is a reliable worker and who is not. PMs are the best source for contractors, unless it’s their brother-in-law who owes them money.

In a different market now, I use handymen, the best of which is insured. For any furnace/electrical/plumbing work I pay for a professional.

Just a quick aside: free MHs are often anything but free. My first Lonnie deal was “free” but needed everything. The drug dealer who had left the place took plumbing, light fixtures, the kitchen cabinets and sink and the toilet with him. He even sold the furnace and hot water heater. I believe in paying for education, so I was prepared to learn on this MH, even to lose money. It was a great education and I will get all my money back by the time it’s paid off (still has the original buyer from 2003 in it). I even sold it without a kitchen, but I did put in all new carpet, a new entryway and all the mechanicals.

If you plan to make money on your first few Lonnie deals, run the numbers over and over again. And buy cheap. And maybe avoid the “free” ones.

good luck,

Anne


#3

Hi Anne,

Thank you very much for the responsive advice!

I thought I would start with a typical Lonnie deal (not much fix-ups involved) to familiarize myself with local market. But things always have a twist to certain extend from an initial plan.

The PM had toured me around the park and showed me all the vacant MH’s. Unfortunately, they have only two titles out of 9-10 vacant/abandoned homes. He is very eager to work with me to get the homes fixed up and sold to earn lot rent. I have told him honestly some of homes are so run-down that they have nowhere to go but demolition. This particular MH primarily needs a thorough clean-up, front door steps, roof coating, a new closet door and several new windows. It would be nice if I can put new flooring in and make other touch-ups, but I am still debating on that. The BIG unknown right now is the electrical part since the home has been vacant for a couple of years. My plan is to have it connected and inspected to make sure there is no negative surprises before I take over the title.

Having a fix-up as my first deal could be challenging. But I look at it in the same way as you did, I consider it as an educational opportunity to pave a better and smoother way for any opportunities down the road. Besides that, by helping the PM with this first project, I would be able to gain creditability to do future business with this park.

Thanks again and Happy Thanksgiving!

Nic


#4

If it’s been vacant a few years you should assume the plumbing is shot, and expect a few repairs needed for the furnace too.

I also have to wonder why the PM has so many bad MHs in their park. Poorly run parks are not the best place to do Lonnie deals. Keep looking for parks.

Also- there are ways to get replacement titles for abandoned MHs. If the PM doesn’t know this, again, I’d be wary. Is the whole park pretty run down? If so, you might have trouble finding a new buyer, even if the MH looks nice. Talk to the neighbors. If you don’t feel safe talking to the neighbors, that’s a bad sign.

good luck and Happy Thanksgiving,

Anne