This post is devoted to mobile home deals I am digging up in my area. I created this page as a reference for when posting on mobilehomeuniversity.com.
(11-24-05) After attending the Anaheim convention earlier this month, I started to think back to possible missed opportunities. About 6 months ago I was doing some repairs in the park below when the owner said she wanted to talk to me. I went to see the owner and she handed me a beer. She said her husband (a non-trad) is graduating from college this spring and then they’d like to sell the park and move. She had received the park in a divorce settlement about 20 years ago. 6 months ago she said she wanted $250,000 for the park and would offer seller financing with $50,000 down. The park is located in South Dakota
The park has 20 spaces and the sale includes 18 homes. 19 of the lots are filled. The owner charges about $250-$300 rent for the lot and home. The streets are not paved. I’ve done enough repair work in the park that I’m familiar with its structure (basically an old structure). It does connect to city water and sewer. The homes do not have their own water meters. Larger 16×80 homes would not be able to fit on most of the lots. Actually, many of the lots may not even fit 14×70 homes.
The park still has not sold. The owner indicated she would take less on an all cash offer. Of course, all that talk was 6 months ago. With graduation only a few months away, she may be getting more anxious. I will contact her sometime in the next week to see ‘how things are going.’
I’ve been wrestling with what this park is really worth as her original price tag of $250,000 seems high. Based upon the area market, lot rent would be $150. The ‘park analyzer’ indicates its worth about $188,000. If you do Steve’s 60 rule on the lot rent, the park is worth $180,000 plus whatever the 18 homes are worth.
One of the biggest expenses is maintenance on all those old mobile homes. If I bought the park, I’d sell-off those homes by doing ‘Lonnie deals.’ Then I’d meter the water to each home and charge that back to them.
The ideal situation would be to purchase the park for under $200,000, talk her into letting me get creative with the down payment, then pay off the park in 5-7 years with the payments I get from selling the homes leaving the lot rent to pay expenses and put money in my pocket.
(11-26-05) Below is a 1967 home. It’s a 12′ wide 2 bedroom home. The owner wants $2600 (down from $2700). I can’t believe anyone would ask that kind of money for a pre-hud home in this condition. When I think of someone giving me a home, this is what I figure I’d get. Maybe somebody else did a ‘Lonnie’ deal on them. Back when I use to sell homes, taking an old home like this on trade actually cost the dealer money — so we had to jack-up the price of the new home to make the deal work.
Problems with this home include plumbing. It needs a new water heater and faucets. The ceilings are also a disaster as there are some panels loose in every room. But I do know a trick to repairing them for about $30. They won’t look like new, but at least they won’t be falling down. Most likely the roof will need to be coated. The floors seem solid (must be plywood!) and most of the floor coverings have been replaced within the last 5 years so they are good to go. The skirting could use a quick painting. There are a couple storm windows missing. Some underbelly work needs to be done.
Unless the owner does her own ‘Lonnie’ deal, know way will someone pay $2600 for this home. Out of pity, I told her I’d take the home ‘as is’ for $500 cash. Today that wasn’t acceptable. But if she’s still paying lot rent in a few months, I bet her tune could change.
A little about me:
I live in South Dakota and mobile home repair is my business and my specialty. When looking at possibly purchasing a mobile home, I can size-up its condition and cost of repair in a matter of minutes.
I also use to sell mobile homes for a local dealer — so I know the market well in my area. Even tho I don’t sell anymore, I keep in contact with those who do so I’m current with any market changes.
Years ago I had the idea to buy and sell homes — except I thought the right way to sell them was for cash. Although I’ll never turn down cash, right now I’m mostly interested in buying homes right and doing ‘Lonnie’ deals. When a customer hires me to do a repair, I get one check. I’m looking to parlay that into multiple checks by doing ‘Lonnie’ deals. I have purchased Steve’s ‘Huge Profits in Mobile Homes & Mobile Home Parks’.