The most common question that I get asked is “how do I get started and find my first deal?” The answer is so simple but so few people will take steps to make it happen… Do you want to know the secret??? You have to let people know that you want to buy a mobile home or it’s awful hard for them to sell it to you!
Most peoples comfort zone keeps them from getting this simple message out to the people that need to know it, so simple yet so difficult… point blank if a seller doesn’t have a way to get in touch with you THEY CAN’T SELL YOU THIER HOME!
So how do you get this message to the right people? Talk to park managers / owners and let them know what you want to do. Talk to as many sellers as you can find even if their price is high right now. Place business cards on every bulletin board at gas stations, grocery stores, etc. near the parks you want to work. (bright cards w/ a simple message draw attention) Get out of your vehicle and knock on doors and ask “I’m looking for a home that is forsale in this park somewhere and can’t find it, do you happen to know anyone who’s trying to sell?” Do what ever it takes to let people know you want to buy a mobile…
Most deals don’t start as deals right outa the gate, most sellers are asking for pie in the sky numbers and it will take time for the unit to turn in to a deal. However if the seller doesn’t know you want to buy if the price is right it will never find it’s way back to you… case in point, I looked at a nice little 1985 14x65 3/2 in great condition on a semi-private lot in the back of a very nice MHP about 6 months ago, the seller wanted $7500. He couldn’t sell for his price all cash so he rented the unit, one leaky water heater and a non-paying tenant later (who wanted the floor fixed, duh) he decided that he just wanted outa the unit period… He called me back again from a park referral 6-7 months ago and after I walked away never naming a price.
I went out and looked at the unit again and it was still in decent shape and only needed a sheet of ply and could stand new carpet in one room. (about $125 max) Happy with the home I asked the questions right outa DOW, “what’s the best you could do for all cash?” his number was $2000, “are you sure that’s the best you can do?” He stuck… Asked if he would be willing to wait about 7-10 days max for his money as I’d like to put it in my IRA… No problem, he just wanted it sold and to be done with it!
In the end, my IRA bought a home that will resale for $9500 with $25-$125 in repairs and a good cleaning, That puts the investment at $2000+$25+$240(for holding cost) totaling roughly $2265. This home will sell fairly fast after the holidays for $9500 with $500-$1000 down and payments around $225 month.
Assuming I sell the home with $500 down the note in my IRA will be for $9000 payable $225 /month at 15.5% for 56.65 months. With a remaining principle investment balance of $1765 it will only take 8 months to have all the money back in my IRA, (along with an additional 48 payments due) the yield 152.80%.
This money sitting in the IRA is drawing about $2.10 a month in interest, I tried to figure out how long it would take to equal this little deal at bank rates but the calc kept saying Err. Long story made short, at bank rates this investment would be worth roughly $2403.74 as long as rates hold at 56.65 months, with the mobile it’ll be worth $13,246.25 if everything goes perfect and late payment is never made or the home never comes back.
The holiday season is a great time to find your first Lonnie deal as it’s darn near impossible to sell for cash this time of year and people are wanting cash to use for the holidays, then right after Christmas there is normally a glut of people wanting to move many of them with tax money in hand. If you are sitting on the sidelines wondering if this will work I challenge you to get out there and look at a minimum of 10 homes in the next 30 days and I would being willing to bet that you will find at least one trailer that works out to be a deal if you just Get Off The Couch and do it!