5 free junkers, but no experience, help!

Ok, so I have been hard at work, reading, cold calling,

putting ads on craigslist to learn the supply and demand in

my area, etc. Today was my first time walking through a

couple mobile homes in my area and I think I MAY have

stumbled on a good opportunity after speaking with a park

owner and making friends.

I started off looking at a home in the park listed for 4200.

It is move in ready, and I think if I can get it for 2k I

will go ahead and do my first Lonnie on it. After the walk

through, I went and talked to the park manager who

conveniently told me she has 5 homes as give aways. She

also said no pad rent for three months. She directed me to

one of the houses which had no door on it, so I walked on

in. Actually, I take that back…I had to CLIMB in because

there was no porch or stairs. It was a mess! There was

trash everywhere, soft spots in the floor, no sink, and

pretty much not habitable. She said that is roughly what I

can expect from the other 4.

My questions:

  1. What’s my risk of “buying” these? They are free, and no

pad rent for 3 months. I am assuming if I can’t rehab/sell

them within 3 months I will owe pad rent? Maybe I can

convince the park manager to let me work on them, but then

walk away if I can’t unload them for like 2k a piece?

  1. Who will do the work? I pretty much can’t do any

repairs myself. Should I ask around the park for someone

who does mobile home repairs to work at like 15 bucks an

hour part time for 2-3months?

  1. Where will I get materials? Obviously I do not want to

be putting thousands of dollars into materials, I just want

to make them habitable. Any suggestions? I will need

replacement windows, a sink, some doors, etc. Suggestions?

  1. Should I take one, or all of them? I have not even done

a Lonnie Deal yet, but this seems like a low risk

introduction since I am only on the hook for what I want to

spend on materials provided I can sell them within 3 months.

  1. Problem…the park manager she is not interested in

chasing down the title since the previous owners all split.

She has a bill of sale for them though. How will I sell

something that I TECHNICALLY never own? They would have to

request the title back from the DMV right? I can’t do that.

Does this make the deal a no go, unless one of them has a


  1. What’s my exit strategy or best plan in general? No

rehab, just clean up, and flip the bundle to a rehabber for

1k a pop? Clean and do minimal repairs and maybe try to

sell each for 2k and 300 bucks down? Full rehab and try to

sell them for 3-5k a piece?

Like I said, I am new to this, but have been reading for

weeks. What’s my best course of action from here? Provided

no one takes these tomorrow, I will head back on Monday to

give the PM my answer.



Congrats for getting off the couch. That is the most important step. Now take smaller steps.

Let me address your questions 1 by one.

  1. What’s my risk of “buying” these?


  1. Who will do the work? I do a LOT of the work myself and have two occasional helpers. One has been with me for 7 yrs. He works so fast and well, I had to increase his pay to $20/hr. under the table to keep him coming back. The other is $15/hr. and also excellent. This year I paid another (recommended) guy $15/hr. because the other 2 weren’t available. He did very good work and didn’t take unnecessary breaks but still took TWO TO FOUR TIMES longer than my other guys.

3.Where will I get materials?

Prices for materials has gone up tremendously. Unless you can source a steady and wide supply of used materials, as Mike says, you will have at least $4000 in one of these. Over the past 8 yrs I have spent an average of 1,847.74 in materials on 22 “free” homes. Over the past year it has averaged 4,863.78. Two of which I lost $$ on (and I’m experienced!). My overall average repair cost for 104 homes is $1383.37. With an average purchase price of $1,725.93 added to the $1383.37 in materials, that means I’ve put an average $3109.3 into each home with a range of as little as $170 (sold for $900) to $12,776.52 (sold for $12,000) NOT including 30-90 hours of my own or others’ labor per home!

4.Should I take one, or all of them?

None of these. Never take more than one fixer upper at a time when you only have 3 mos. to repair. If you had 6 homes available with three mos. grace per, you would have 3 mos to get them ALL done, or one at a time, 18 mos. (3mos X 6) to get them done in series.

5.Problem…the park manager she is not interested in chasing down the title since the previous owners all split.

Problem, Problem, PROBLEM, PROBLEM! If your state has titles to trailers, YOU MUST HOLD TITLE or you have ZERO, ZERO, ZERO control. P.s In most states, only the landowner can apply to the state for abandoned title. Apparently your park does not find it worth it for these homes.

6.What’s my exit strategy or best plan in general?

Not owning the trailers gives you no exit strategy as there is no entrance strategy. Owning ANY structure on someone Else’s land, gives you limited control. In this case, just fixing structures on someone Else’s property is just giving them free money. You will end with a headache, broke and having fixed THEIR problem.

All that being said, stick to manageable homes with MOTIVATED SELLERS. If that first deal you saw for $4200 is being sold by the park, run away from that park altogether. Even if that home is being sold by an individual, you have to wonder who wants to pay decent money and live in a park with 5 wrecked homes? How much can you realistically sell that home for on contract? Lets say $4000. Then, in that park, I would not pay more than $1000 for that particular home. What is the seller’s motivation to sell? Wait until they are even more motivated. As has been said before, you don’t have to buy anything tomorrow, next week, or next month but the seller may need to get out in 3 weeks. Wait them out or let some greater fool buy it for more money.


BTW Brian,

My response was to your specific current situation. Although I am bearish (cautious) on the future of Lonnie dealers, I want to give you some positive highlights:

My average investment in 104 homes after buyer’s down payment is $2,297.02 with buyer’s obligation to me of $8841.88 on contract. Which is 3.85 times my investment.

The numbers above are only for the INITIAL purchase, repair, and sale. 51.2% of my buyers have defaulted after making some or a lot of payments. I just sold a home for cash that I had gotten back 6 times over 6 yrs. Netted over $14,000 on that home and it wasn’t a rental. That is a “free” $194.44/mo. Not big numbers but they add up.

The average contract yield has been 239.1%


Post Edited (09-16-11 10:04)


Great Stats


Listen to everything Dr B says. I’ll add a couple of other thoughts if you really want to pursue this business.

  1. If you do not have experience on this is there anyone you can learn from for at least your first ? Offer to put in some sweat equity so you understand how to rehab, estimate, work the sales/marketing of the homes, etc. We learn from mistakes, but its nice to learn from someone who has already made many of them :slight_smile:

  2. You talked to the manager. They may have the authority, but I would definitely want something ‘in writing’ with the owner. As a park owner, my manager would not have the authority to make that decision without my consent. If you can arrange a deal with the owner to take 1 Home for free and NO lot rent at all until its completed and sold then that may be better.

  3. Do you know the numbers and your market? Dr. B knows the numbers and profit margins on his deals. I am sure he knows demand as well. If this is new to you, just try some test ads in the paper to gauge demand. Do comps with other parks and 2br apts.

  4. When dealing in someone else’s park you have limited exit strategies if your primary busts. Will they allow renters? Allow you to flip to another contractor/investor? The park has final right to approve/deny anyone you sell to. Can you move the homes out (providing you get the title?).

  5. Are there any city ordinances or stipulations on these homes and work to be done? Probably not an issue but better to be safe. Some cities are funny.

Also, as Dr B ask, why are there so many junk homes in the park? Is this a blighted park? What is the area like? If its an underperforming park in a good area, might it be better to see if the owner wants to sell?

Steve those are awesome stats and obviously prove how powerful the system is IF you buy right, limit your risk, AND have the experience to navigate your way out of the tight spots some of these might put u in.


  1. The only experience I have is in stick built homes, and about a month of reading like crazy (DOW, forums, the archives, etc.)

  2. I will talk to the park manager and just explain to her how much risk I AM TAKING, if I decided to move forward with a rehab. I would explain that I would need the title, recommendations on a worker, no lot rent IN WRITING, and basically everything I would need to get out from under this home with only what I spend on labor and materials.

  3. I have been stalking CL and newspaper ads for a month. I have done test ads, cold called lots of sellers, made a buyer and sellers list, etc. How much more “research” can I really do before I just jump into my first deal?

  4. In my negotiations with the PM or the owner I would get my options in writing, and they’d better be enticing for me to take on any risk. The homes are just so junky.

  5. Not really. Talked to park managers and the DMV, and nothing should stand in my way.

  6. The park was pretty nice actually, but it’s probably median range for the area I am in. I have driven through a bunch. My issue is I cannot get into the nicer parks cheaply. Most homes are newer and park owned, and they just won’t negotiate on price. Any tips? Or just stick to the medium range parks with motivated sellers?

Dr. B,

Could you detail step by step what you would do on the 4200 house I looked at? It needs minor plumbing in the bathroom, and maybe some new carpet and paint, but that’s about it. Here is my plan…that way if you respond with yours I can compare the two, or maybe you could just critique mine.

  1. She said she wants out before Oct. 1 because of lot rent, so I am delaying any offer until a few days before then, BUT I am going to factor in that 350 bucks into my purchase price and numbers.

  2. On Sept. 25th or so, I will call back and hope she still has no offers. If that’s the case, I will start talking about all the repairs, and how I think they will run me about 1k. I will also STRESS the fact the park has FREE homes, so why should I pay for hers when I can put 1500 into the others and live there? (She doesn’t need to know those others need 3k-5k of work :wink:

  3. I’ll gauge her motivation and probably start an offer around 1200, with a target of 1500 or so. Once again, I will use the repairs to my advantage (even though I might not make them) and also the free homes in that park.

  4. If I get 1500 or less, I will put 500 or less into it for a total investment or around 2k in a 4200 listing.

  5. I will list with a sign in the park, outside the park, and on craigslist right away for 5k, 500 down. Or 4k all cash. I will probably do 3 payment options, all with similar yields, but just to give options to buyers.



Howard makes some good points too. See my additional answers on the other web site forum.

It sounds like you have done a fair amount of “research” (more than I did). If it works out, maybe it is time to risk a few dollars on your first deal (the $4200 one).

Ya I think I just need to get a better idea of the actual retail value of late 70s to mid 80s models in my area. Once I know what those are selling for, I can reverse engineer my strategy from there.

Howard, you mention buying some of these parks, and yes, I actually found a 20 lot park that is “shutting down soon” the park manager said. It is a warzone though honestly. I think I need to take baby steps and be careful about putting the cart before the horse sorta thing. Also, I am a professional poker player, and have been for about 8 years. Honestly…banks sorta run from doing deals with risky clients these days, so doubt I could even get the money. I could try to work some sweet owner finance deal, but that’s a longshot.

Thanks for the tips guys, both here, and on other forums.

Hey Widemanb,

Sounds like you have done great research and diligence so far…kudos to you. In terms of getting a bank loan when you are a poker player, yeah I agree. Unless your name is Phil Ivey forget about it.

There was one piece of info I didn’t catch. What is your investment goal? Are you looking to sell on contract and retain long term income or do quick flips for cash influx. If its the latter, then considering its very hard to get MH financing for your buyers (maybe 55 park) then you are better at the lower end park. If its for stable long term cash flow then the nicer homes and park may be better.

Also, you mentioned a park with 20 homes that may close down. If the homes in those parks are in good condition you may want to keep that in the back of your mind. Good used homes are hard to find these days and solid park owners will look to bring them in. You may want to communicate with the owners and look at getting options to buy those homes. Owner may be interested if they think the park with shut down. I can foresee wholesaling nice used homes. Just a thought …

PS: Have you seen you at the WPT on tv