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HOT TOPIC Where are all the Mobile Home Park Investors?

WJK

Gold Contributor
Speedway Pass
Oct 9, 2017
730
1,627
463
Nikiski, Alaska
It's been hard to find good information on it but how do you operate differently after the SAFE Act? I've been scouting the local MH parks for some good deals and am hoping to make a couple flips.
I never thought of a mobile home park as a "flip." I have flipped apartment buildings, SFRs, and some small commercial buildings over the years. I guess you can flip just about anything that you can buy right.

I'm just not sure how liquid a mobile home park would be. And what would the market period be? What about the financing? Are you expecting the cashout or are you going to carry the paper? (That was a disaster for us when my parents sold and they carried the paper. That's how I ended up coming to Alaska and taking ownership in my park.) The real question is -- how deep is your investor market in your target area?
 

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OP
OP
Major

Major

Luck is Man-Made
FASTLANE INSIDER
I've Read UNSCRIPTED
Oct 26, 2016
48
217
153
South Carolina
It's been hard to find good information on it but how do you operate differently after the SAFE Act? I've been scouting the local MH parks for some good deals and am hoping to make a couple flips.
You can as an individual conduct up to and no more than 10 installment sales. After 10 you must be certified. The way around it is a lease purchase (rent to own) or as the I learned from Frank and Dave, is a rent credit. Rent credit meaning you give a percentage of the rent as a credit toward the purchase of the home on an agreed upfront price. Make sure you put i in, on an form of agreement between you and tenant in bold, upon default and/or non payment " tenant/note maker willing gives landlord/note holder mission upon default and/or breach of contract". This will save you alot of time and heart ache with judges whom are unfamiliar with mobile home (due to it classified as personal property and the liberal judges who want to protect tenants from us evil landlords).

@WJK you have a MHP in Alaska? Would love to hear about that and how you deal with the heat and snow. I visited Juno and Anchorage earlier this year and it was beautiful.
 
OP
OP
Major

Major

Luck is Man-Made
FASTLANE INSIDER
I've Read UNSCRIPTED
Oct 26, 2016
48
217
153
South Carolina
It's been hard to find good information on it but how do you operate differently after the SAFE Act? I've been scouting the local MH parks for some good deals and am hoping to make a couple flips.
You can easily flip a MHP. I just closed on my small park mentioned in my first post. I purchased it for 215k fixed it up and sold it three years later for 417k. Along with the 31k avg cashflow, the property did very well and with only 25k down.

Another park I have was purchased in June 2017. I purchased it at 1.7m with no money down (actually walked away with 115k from closing) and a seller held second. First position loan for 1.15 and seller held second for 550k. Seller fell into desperation and needed cash quick instead of the 5 year note (very entertaining atory). Any way after some negotiation, he accepted to take a 200k lump sum. A 375k discount! I called a few investors and brokers about wanting to sell the now efficent park. I have multiple offers at 2.5m and up.

So yes, you can turn a park but it is longer term. Where do you create value? Operatate the park to its peak then sell? Add rental units? Increase lit rents? Cut variable cost? Wait for a large near by development to finish construction? How do you justify the increase in price to make your profit.

These things take more time then sfr or apts due to the nature of the business. It takes 4 months on average just to fix/clean out the previous owners tenants that are hindering your park. Make it 6 months if gang related tenants because they move from trailer to trailer. Then you have to flip the homes or remove them from the park and fill that unit with a quality tenant.

These parks are becoming very hard to find due to investors barrowing cheap money and a lack of inventory on market.
 

WJK

Gold Contributor
Speedway Pass
Oct 9, 2017
730
1,627
463
Nikiski, Alaska
You can as an individual conduct up to and no more than 10 installment sales. After 10 you must be certified. The way around it is a lease purchase (rent to own) or as the I learned from Frank and Dave, is a rent credit. Rent credit meaning you give a percentage of the rent as a credit toward the purchase of the home on an agreed upfront price. Make sure you put i in, on an form of agreement between you and tenant in bold, upon default and/or non payment " tenant/note maker willing gives landlord/note holder mission upon default and/or breach of contract". This will save you alot of time and heart ache with judges whom are unfamiliar with mobile home (due to it classified as personal property and the liberal judges who want to protect tenants from us evil landlords).

@WJK you have a MHP in Alaska? Would love to hear about that and how you deal with the heat and snow. I visited Juno and Anchorage earlier this year and it was beautiful.
The number of installment sales depends on the state where the property is located. The laws here are based on the number of sales per year. That's easy for me. I buy owner carried trust deeds on the side.
Yes, my mother sold off some of our mobile homes on contract sales when she was alive. (I was in Los Angeles still working at my career.) Yes, I had to repossess almost all of them through a lawsuit. It's a good thing I went to law school.
And I'm in a rural area where I appear before the same couple of judges, who have watched me for years. One judge was pretty pro-tenant when she came on the bench, but after all these years, she has changed her tune when it comes to me and my cases. She watched me help a lot of people over the years and be kind even when I don't have to.
I rent my mobile homes. Here in Alaska they've changed the eviction rules for mobile home parks concerning homes owned by individuals which are located in parks. Evicting a mobile home along with their owner is almost impossible now. So I own all except for 2 of the homes in my park.

YOUR QUESTION ABOUT THE COLD...
We work all summer to get ready for winter. Painting and staining wood is a really big deal. Things rot here in 3 or 4 years that would take 20 years in the Lower 48.

All of our pipes are insulated and heat taped. Each unit has a switch inside the unit for that heat tape that we make sure is turned on when it gets down to 0.

Our skirting is critical. Every fall we inspect every mobile home for any damages. A pinhole can let in enough cold air to freeze up a unit. We use PEX for our plumbing. Other types of plumbing can freeze up and turn brittle. Opening a skirting in the winter is almost impossible some years, depending on how much snow we get and the how cold the winter is.

I own a small community water system that services the park, and our water pipes are 10' underground. We're very careful to make sure that we protect that system.

Over the last few years, we have replaced just about every window in every unit. Standard mobile home windows don't get it here. I have spent about 100K wholesale on double pane; argon filled windows.

Almost all of our units have arctic entries -- enclosed unheated porches -- as a buffer for the winter's cold.

My tenants are all low to moderate income people, so I include the utilities in my rents. I have the only "bank" of affordable housing in my community -- I have 40 rentals (besides the senior center which has only 6 senior units), the only self-service Laundromat and the only full hook-up RV spaces.

I can tell you more... if you are interested.
 
OP
OP
Major

Major

Luck is Man-Made
FASTLANE INSIDER
I've Read UNSCRIPTED
Oct 26, 2016
48
217
153
South Carolina
The number of installment sales depends on the state where the property is located. The laws here are based on the number of sales per year. That's easy for me. I buy owner carried trust deeds on the side.
Yes, my mother sold off some of our mobile homes on contract sales when she was alive. (I was in Los Angeles still working at my career.) Yes, I had to repossess almost all of them through a lawsuit. It's a good thing I went to law school.
And I'm in a rural area where I appear before the same couple of judges, who have watched me for years. One judge was pretty pro-tenant when she came on the bench, but after all these years, she has changed her tune when it comes to me and my cases. She watched me help a lot of people over the years and be kind even when I don't have to.
I rent my mobile homes. Here in Alaska they've changed the eviction rules for mobile home parks concerning homes owned by individuals which are located in parks. Evicting a mobile home along with their owner is almost impossible now. So I own all except for 2 of the homes in my park.

YOUR QUESTION ABOUT THE COLD...
We work all summer to get ready for winter. Painting and staining wood is a really big deal. Things rot here in 3 or 4 years that would take 20 years in the Lower 48.

All of our pipes are insulated and heat taped. Each unit has a switch inside the unit for that heat tape that we make sure is turned on when it gets down to 0.

Our skirting is critical. Every fall we inspect every mobile home for any damages. A pinhole can let in enough cold air to freeze up a unit. We use PEX for our plumbing. Other types of plumbing can freeze up and turn brittle. Opening a skirting in the winter is almost impossible some years, depending on how much snow we get and the how cold the winter is.

I own a small community water system that services the park, and our water pipes are 10' underground. We're very careful to make sure that we protect that system.

Over the last few years, we have replaced just about every window in every unit. Standard mobile home windows don't get it here. I have spent about 100K wholesale on double pane; argon filled windows.

Almost all of our units have arctic entries -- enclosed unheated porches -- as a buffer for the winter's cold.

My tenants are all low to moderate income people, so I include the utilities in my rents. I have the only "bank" of affordable housing in my community -- I have 40 rentals (besides the senior center which has only 6 senior units), the only self-service Laundromat and the only full hook-up RV spaces.

I can tell you more... if you are interested.
Simply amazing the amount of prepp you must endure! I'd imagine you have a wait list of tenants wanting to move in due to your property being one of the only lower price housing in the area. Do you have a manager onsite? Any problems with RV's leaving in the night to no pay space fee? What about a power outage during winter? Do your tenants have generators? Do you have to plow the park on a weekly basis?

I only ask because I find your story fascinating and try to learn from other professionals in our niche. Thanks for the replies. There is some very pertanite information in this thread.
 

WJK

Gold Contributor
Speedway Pass
Oct 9, 2017
730
1,627
463
Nikiski, Alaska
e
Simply amazing the amount of prepp you must endure! I'd imagine you have a wait list of tenants wanting to move in due to your property being one of the only lower price housing in the area. Do you have a manager onsite? Any problems with RV's leaving in the night to no pay space fee? What about a power outage during winter? Do your tenants have generators? Do you have to plow the park on a weekly basis?

I only ask because I find your story fascinating and try to learn from other professionals in our niche. Thanks for the replies. There is some very pertanite information in this thread.
I do my own management. I have a commercial building on the highway at the mouth of the park that I use as an office. I keep regular business hours 5 days per week -- 8:30 AM to 2 PM
Roads? Our roads inside the park are private. I own a road grader, plow truck, 2 backhoes, a bulldozer, and a small dump truck. We plow as necessary in the winters. I have a lot of acreages here. We have a lot of woods as well as the developed parts.
Yes, I have a low vacancy rate. I have one vacancy right now, and I'm showing it at 5 PM tonight. I've gotten 3 calls in the last couple of days. I often turn down prospects due to their credit or background. And my records of past tenants go back a bunch of years. I know if they screwed up here before. I'm kind of like an elephant.
I almost always have a credit card on file, so people don't generally leave the RV spaces without paying. I make sure that they pay in advance. Also, there's only one highway that leads off of the peninsula. It's hard to be a bad guy here without some notice.
Power outages in the winter can be a problem. No, my tenants don't have generators. The biggest problem is the power for the well. When the power goes off, we have about 20 minutes of water left in my small community water system. I'm a licensed well operator.
I went to law school many years ago, so I do my own legal work. I have a good relationship with the district judge, who almost always hears my eviction cases. She knows I'm a straight shooter who cares about people.
As far as maintenance management goes, I'm pretty much a one-man band. I manage the scheduling and materials for the maintenance work. My husband is the foreman. He can fix or build anything. He just can't manage the whole maintenance operation. SO we work as a team.
We live in the woods on the 10 acre parcel behind the park. I'm supposed to be retired, and I work a lot. Running this place is Real Estate 101 for me. It keeps me very busy, but it doesn't tax my brain much. I brought my mom home here when she was frail elderly. I stayed. This wasn't what I wanted at the time. I was already Mom's business partner. My parents bought the park parcel in 1987 and I've added more parcels to the holding.
It's worked out OK for me. I met my husband here and we married when I was 50 years old -- 14 years ago. We have a good life together.
 
OP
OP
Major

Major

Luck is Man-Made
FASTLANE INSIDER
I've Read UNSCRIPTED
Oct 26, 2016
48
217
153
South Carolina
e
I do my own management. I have a commercial building on the highway at the mouth of the park that I use as an office. I keep regular business hours 5 days per week -- 8:30 AM to 2 PM
Roads? Our roads inside the park are private. I own a road grader, plow truck, 2 backhoes, a bulldozer, and a small dump truck. We plow as necessary in the winters. I have a lot of acreages here. We have a lot of woods as well as the developed parts.
Yes, I have a low vacancy rate. I have one vacancy right now, and I'm showing it at 5 PM tonight. I've gotten 3 calls in the last couple of days. I often turn down prospects due to their credit or background. And my records of past tenants go back a bunch of years. I know if they screwed up here before. I'm kind of like an elephant.
I almost always have a credit card on file, so people don't generally leave the RV spaces without paying. I make sure that they pay in advance. Also, there's only one highway that leads off of the peninsula. It's hard to be a bad guy here without some notice.
Power outages in the winter can be a problem. No, my tenants don't have generators. The biggest problem is the power for the well. When the power goes off, we have about 20 minutes of water left in my small community water system. I'm a licensed well operator.
I went to law school many years ago, so I do my own legal work. I have a good relationship with the district judge, who almost always hears my eviction cases. She knows I'm a straight shooter who cares about people.
As far as maintenance management goes, I'm pretty much a one-man band. I manage the scheduling and materials for the maintenance work. My husband is the foreman. He can fix or build anything. He just can't manage the whole maintenance operation. SO we work as a team.
We live in the woods on the 10 acre parcel behind the park. I'm supposed to be retired, and I work a lot. Running this place is Real Estate 101 for me. It keeps me very busy, but it doesn't tax my brain much. I brought my mom home here when she was frail elderly. I stayed. This wasn't what I wanted at the time. I was already Mom's business partner. My parents bought the park parcel in 1987 and I've added more parcels to the holding.
It's worked out OK for me. I met my husband here and we married when I was 50 years old -- 14 years ago. We have a good life together.
Very informative. Sounds like you have a great system in place with a terrific partner.
 

WJK

Gold Contributor
Speedway Pass
Oct 9, 2017
730
1,627
463
Nikiski, Alaska
Very informative. Sounds like you have a great system in place with a terrific partner.
I missed my mom, but my husband and I have made a good life together. It's not the classic Fastlane life. It's a good solid base.

But, I do have a couple of other side things going. They are a lot more exciting than the mobile home park. I'll have to start a progress thread about my gas/oil subsurface lease that I own, and I'm looking to develop, down the coast. Now it just a right to develop and the prospects for a producing well coming in are good. But, if I'm successful, it would be cool to own a gas/oil well or two...
 
OP
OP
Major

Major

Luck is Man-Made
FASTLANE INSIDER
I've Read UNSCRIPTED
Oct 26, 2016
48
217
153
South Carolina
I missed my mom, but my husband and I have made a good life together. It's not the classic Fastlane life. It's a good solid base.

But, I do have a couple of other side things going. They are a lot more exciting than the mobile home park. I'll have to start a progress thread about my gas/oil subsurface lease that I own, and I'm looking to develop, down the coast. Now it just a right to develop and the prospects for a producing well coming in are good. But, if I'm successful, it would be cool to own a gas/oil well or two...
Wow. Would love to read about your subsurface lease... Please keep me in touch. Have always wanted to learn about water basin rights as well.

I will have to disagree with you on the mobile home parks not being exciting though. Everyday is completely different. Maybe the culture down here closer to the equator. Thanks for the reply's on this thread. Hope to hear more from you!
 

BRichard

Contributor
Read Millionaire Fastlane
I've Read UNSCRIPTED
Jul 31, 2017
20
30
27
North Carolina
It's been hard to find good information on it but how do you operate differently after the SAFE Act? I've been scouting the local MH parks for some good deals and am hoping to make a couple flips.
@EAChi I am also looking for similar info, I have multiple parks under ownership and am constantly exposed to opportunities to re-sell homes and the majority of buyers in my area are asking for a rent-to-own option, as they don't have cash to purchase a MH outright.

You can as an individual conduct up to and no more than 10 installment sales. After 10 you must be certified. The way around it is a lease purchase (rent to own) or as the I learned from Frank and Dave, is a rent credit. Rent credit meaning you give a percentage of the rent as a credit toward the purchase of the home on an agreed upfront price. Make sure you put i in, on an form of agreement between you and tenant in bold, upon default and/or non payment " tenant/note maker willing gives landlord/note holder mission upon default and/or breach of contract". This will save you alot of time and heart ache with judges whom are unfamiliar with mobile home (due to it classified as personal property and the liberal judges who want to protect tenants from us evil landlords).
@Major Is that the de minimus provision? Where basically you operate under a meaningful threshold such that you wouldn't be prosecuted? i.e. Selling 1 home per year on payments vs. 1,000 per year?
I am closing on a park this month which will come with 10 homes + titles and I will be looking to sell them all, so as to be a 100% lot-rental-only community after that point, massively increasing the passivity grade of the property. Did you have your attorney draft your agreement for you? I've heard rumours of judges in my State rejecting rent credit program as a disguised mortgage....
 

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OP
OP
Major

Major

Luck is Man-Made
FASTLANE INSIDER
I've Read UNSCRIPTED
Oct 26, 2016
48
217
153
South Carolina
I've heard rumours of judges in my State rejecting rent credit program as a disguised mortgage....
First of all, congrats on your next addition! Glad to hear you are doing well in this field.

@BRichard. Each state, city/county, and judge's for that city/county is different and will have different opinions. I always advise to speak with an attorney if you have a legal question, as I am not an attorney and suggestions, just like stated in TMF and Scripted, are not legal advisers or qualified to give absolute legal advice.

If you are still persistent and not sure after reading the rest of this post. Save yourself a lot of time, money, and frustration, find a local property manager from a management firm who works for a mobile home park or has experience. They cant tell you first hand how each judge for that county will react and plan accordingly.

You are correct on the provision and are allowed up to 10 transactions per year. It has been my experience in hundreds of hours in court rooms in numerous counties and states, that the biggest issue that is ever presented in any case is that the judge does not know how a mobile home park works. Majority of the time a tenant will not show. No questions judgement and immediate possession (based on state) is granted. A a tenant will show every now and then. I can count on my two hands on the amount of cases where the dead beat tenant will get a FREE attorney, some paralegal from some local firm, to represent them (Thanks tax dollars!). The attorney will look at the case for a few minutes prior to the hearing as they have other cases that actually pay a commission. In this case the attorney will only push for a date of trial and a bill of particulars to try to trip up the plaintiff, YOU, and dismiss the case or worse seek counsel yourself and lose more money while you try to explain to your over priced attorney how mobile home parks work.

The biggest issue no matter if they own the mobile home, rent the home, or have an installment sale on he home, is the judge will not know how the how a mobile home park is managed/operated. That is why in the previous post I put in the language in my lot lease, rent agreement, promissory note, and rules and regulations about default and acknowledgement from tenant for willing giving possession. Then have them sign next to the statement in bold. Any judge no matter their experience can clearly see the statement signed by the tenant and 99.99% of the time rule in your favor without having to go to a trial.

Finally, to better safe guard yourself, set the homes up in a separate entity from the entity that is deed holder to the actual park. You can go a step further, like myself, and setup a management company entity and contract to yourself. Both giving you yet another barrier of protection.
 

BRichard

Contributor
Read Millionaire Fastlane
I've Read UNSCRIPTED
Jul 31, 2017
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North Carolina
:cool:
First of all, congrats on your next addition! Glad to hear you are doing well in this field.

Finally, to better safe guard yourself, set the homes up in a separate entity from the entity that is deed holder to the actual park. You can go a step further, like myself, and setup a management company entity and contract to yourself. Both giving you yet another barrier of protection.
@Major Thanks! Closed on 3rd park this year, looking to acquire 2 more medium-sized parks in 2019 and complete some cash-out refi's next year for some wealth events :cool::cool:

I'm really interested in the concept of an entity for owning the park (real property/parcel), then a separate entity owning any rentals/flips/sales of the individual MH's, and then once we scale up, another entity for the Park Management operations. Do you have any recommended reading sources for entity creation, structuring, etc?
I am also looking at rolling up some repairs and general contracting into one of the entities, as I am finding that there are VERY few MH renovation or remodel companies that are timely or interested in actually working haha.

Thanks for all the insights so far! You going to MHU Boot Camp in January? (Orlando)
 

Action Mike

Contributor
Read Millionaire Fastlane
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Speedway Pass
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@Major Lot of great info in the thread. Thanks for taking the time to keep us updated. I spent some time looking into buying MHPs a few years ago and got cold feet, wish I would have moved forward with it instead of what I was doing at the time.

When you buy MHP out of town or state and they are not large enough to have onsite management, I believe you said you manage them remotely and with a few contacts in the park to keep an eye on things. Does that mean you only rent pads in those locations or do you still sell MH's? It seems like it would be much more complicated doing repairs and evictions on MH remotely like that without a onsite manager.

How much time do you spend boots on the ground for a smaller remote park? Would you do as much due diligence before hand as you can and then visit the site right before making a final offer or do you trust remote methods like pictures and face time to get a feeling for the park? How do you handle evictions remotely?

How do you feel the market is going now for people looking to buy MHP's? My area seems like they run about $20k to $25K per pad on city utilities in developed areas. What do you consider a good price per pad and lot rent?
 

WJK

Gold Contributor
Speedway Pass
Oct 9, 2017
730
1,627
463
Nikiski, Alaska
@Major Lot of great info in the thread. Thanks for taking the time to keep us updated. I spent some time looking into buying MHPs a few years ago and got cold feet, wish I would have moved forward with it instead of what I was doing at the time.

When you buy MHP out of town or state and they are not large enough to have onsite management, I believe you said you manage them remotely and with a few contacts in the park to keep an eye on things. Does that mean you only rent pads in those locations or do you still sell MH's? It seems like it would be much more complicated doing repairs and evictions on MH remotely like that without a onsite manager.

How much time do you spend boots on the ground for a smaller remote park? Would you do as much due diligence before hand as you can and then visit the site right before making a final offer or do you trust remote methods like pictures and face time to get a feeling for the park? How do you handle evictions remotely?

How do you feel the market is going now for people looking to buy MHP's? My area seems like they run about $20k to $25K per pad on city utilities in developed areas. What do you consider a good price per pad and lot rent?
I lost a lot of money when I didn't live in the area. I came back and forth a lot, but that was ineffective. I knew my managers were stealing from me -- I just didn't know how much until I moved to the contiguous property and started managing the park myself. My income doubled within about 18 months when I took over the management.

When I got here, my managers told my tenants to ignore me. They said I wouldn't make here for more than 2 weeks. That was many years ago. They moved away after I fired them, and I'm still here. Since I came into ownership about 20 years ago (March 1, 1999), my gross income has increased to 6 times the level where I started. I have built a cash cow.
 

BRichard

Contributor
Read Millionaire Fastlane
I've Read UNSCRIPTED
Jul 31, 2017
20
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North Carolina
I lost a lot of money when I didn't live in the area. I came back and forth a lot, but that was ineffective. I knew my managers were stealing from me -- I just didn't know how much until I moved to the contiguous property and started managing the park myself. My income doubled within about 18 months when I took over the management.

When I got here, my managers told my tenants to ignore me. They said I wouldn't make here for more than 2 weeks. That was many years ago. They moved away after I fired them, and I'm still here. Since I came into ownership about 20 years ago (March 1, 1999), my gross income has increased to 6 times the level where I started. I have built a cash cow.
Good work @WJK
What regions of the US are you invested in?
 

WJK

Gold Contributor
Speedway Pass
Oct 9, 2017
730
1,627
463
Nikiski, Alaska
Good work @WJK
What regions of the US are you invested in?
I'm in Alaska. When I was practicing my career, I was in Los Angeles for about 30 years. I've been the real estate business in one form or another for 43 years. Therefore, I have invested in several markets. This is my fifth business cycle since I became an adult.

No, I didn't choose Alaska. It's where my parent worked and retired here when they were still alive. But, things have worked out well for me here.

A lot of my success I chalk up to years and years of experience. It's a lot of doing the little things right, time after time. It's getting up day after day and putting in the consistent hard work. It's building up and following good work habits and procedures. I don't know how to do any other way. I have watched people try to take shortcuts and/or suck out all the money for silly follies. I've watched them quickly go down in flames. My life is all about "TCB, Baby!" (take care of business)

I'm probably telling you more than you wanna know...
 

HL805

New Contributor
Read Millionaire Fastlane
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Jun 22, 2017
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@Major Great thread!
any updates on your journey?
you mentioned you bought a camera and may start taking pictures/ videos, did you ever get around to doing that?
 

BRichard

Contributor
Read Millionaire Fastlane
I've Read UNSCRIPTED
Jul 31, 2017
20
30
27
North Carolina
I'm in Alaska. When I was practicing my career, I was in Los Angeles for about 30 years. I've been the real estate business in one form or another for 43 years. Therefore, I have invested in several markets. This is my fifth business cycle since I became an adult.

No, I didn't choose Alaska. It's where my parent worked and retired here when they were still alive. But, things have worked out well for me here.

A lot of my success I chalk up to years and years of experience. It's a lot of doing the little things right, time after time. It's getting up day after day and putting in the consistent hard work. It's building up and following good work habits and procedures. I don't know how to do any other way. I have watched people try to take shortcuts and/or suck out all the money for silly follies. I've watched them quickly go down in flames. My life is all about "TCB, Baby!" (take care of business)

I'm probably telling you more than you wanna know...
All good! Let's meet up if you ever travel towards the SouthEast in the contiguous 48 :)
 

WJK

Gold Contributor
Speedway Pass
Oct 9, 2017
730
1,627
463
Nikiski, Alaska
Update... It's been a hard week. A guest of one of my tenants tried to burn down my trailer where they lived -- with their son in it -- who was her ex and not my tenant. She loudly stated that she was trying to kill him. She took videos, with selfies, as she danced and screamed in front of the fire. No one was hurt. The Trooper came out and arrested the arsonist. She slipped out of her handcuffs and disabled their camera in the back seat of their car. They put her into a van. Then she slipped out of the second pair of handcuffs, took off her clothes and set them on fire. The trailer has $30,000 worth of damage that I'll have to cover. It will take months to get it ready to rent again. At least no one was injured, and they have her in jail. They are taking her to the mental hospital for evaluation. I've got to write a book about all of this. It would be a best seller. And the beat goes on, and the beat goes on...
 

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AF77

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Update... It's been a hard week. A guest of one of my tenants tried to burn down my trailer where they lived -- with their son in it -- who was her ex and not my tenant. She loudly stated that she was trying to kill him. She took videos, with selfies, as she danced and screamed in front of the fire. No one was hurt. The Trooper came out and arrested the arsonist. She slipped out of her handcuffs and disabled their camera in the back seat of their car. They put her into a van. Then she slipped out of the second pair of handcuffs, took off her clothes and set them on fire. The trailer has $30,000 worth of damage that I'll have to cover. It will take months to get it ready to rent again. At least no one was injured, and they have her in jail. They are taking her to the mental hospital for evaluation. I've got to write a book about all of this. It would be a best seller. And the beat goes on, and the beat goes on...
I’m about to spend $2,500 because of this thread.

Then it’s a ton of bleach, a body suit, elbow grease, and carpeting.
 

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Update... It's been a hard week. A guest of one of my tenants tried to burn down my trailer where they lived -- with their son in it -- who was her ex and not my tenant. She loudly stated that she was trying to kill him. She took videos, with selfies, as she danced and screamed in front of the fire. No one was hurt. The Trooper came out and arrested the arsonist. She slipped out of her handcuffs and disabled their camera in the back seat of their car. They put her into a van. Then she slipped out of the second pair of handcuffs, took off her clothes and set them on fire. The trailer has $30,000 worth of damage that I'll have to cover. It will take months to get it ready to rent again. At least no one was injured, and they have her in jail. They are taking her to the mental hospital for evaluation. I've got to write a book about all of this. It would be a best seller. And the beat goes on, and the beat goes on...
Here is your book title:

Trailer Parks & Troopers

“How I stayed in the Fastlane and lived to tell about it.”
 
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AF77

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After thinking about it in the car before I left the sellers home, I went back in to speak with he and his family. It was March, the seller stated he would not be moving until at least June because he did not want to move with only four months left in the school year with two children. I asked where would he go until the school year ended? He stated he would go to a local hotel or something. "Well why not just stay here, save yourself the move, and rent this home until you want to leave?" I asked. After a short negotiation, he agreed to stay at the home for a rent of $400 a month on a six month lease. I did the adding and it came to a total rent of $2,400. To my amazement he gave me back $2,400 of the $6,000 I just gave him. Wow..what a deal I thought. I am now have only $3,600 invested into the mobile home with six months to get some rehabbing money for when he moves out.

Five months later the family moved and gave me possession of home. They did not get an money back for the last month as they were breaking the lease and agreed to the terms. I managed to save up $2,000, that my partner matched for a total of $4,000 to fix up the home. Installed new hvac, heat pump, paint, new carpet, and two scratch and dent appliances within two weeks. We are not invested into the home a total of $7,800. Put the home on market with a sign in the window and an add on craigslist. We had a buyer for $18,000 in four days. Buyer put $6,000 and agreed to a $450 payment for 4 years with 9% interest. My partner and I split the down payment 50-50.

I had seen the light. Two days later the park manager called me to come to his office. The park manager, very pleased with work I had done, approached me with an offer for two homes they had just received possession of. I bought one home for $1,000 (3bed 1bth) and a second for $1,400 (large 2bed 1bth).

Hope to hear from you guys and share advice/stories of this great industry. P.S. I just purchased a camera to take video and pics of what I do and think it could be a great value to provide up and coming investors an inside look. Let me know what you think. Thanks
These two paragraphs seem to be the key to you getting started: you bought used Mobile homes at deep discounts that needed some work, but also that didn’t need to be moved.
The first one you bought with a tenet in it, but what did you do the last five months while you had to fix it up? Pay the lot rent?

What about the second two uber-cheap homes?


The most expensive part of getting into this is moving them. So it seems you always bought them and paid lot rent until you flipped them?

Can you give us some details on that?

Edit: I did read the book, by the way, but his startup was a little different than yours. He basically just did rent to own deals.
 
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AF77

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Mar 8, 2019
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550,000 with a mrr of over 5000 dollars. Is that bad? Some of the property values you guys have in non major metropolitan American areas are nuts, outside of SV NYC Boston etc.

Here in Toronto a 550k condo nets you 18-2200 in rent tops. Then you eat a few hundred on maintenance fees. Although I suspect the expected appreciation (30% yoy) outweighs that.
That 550k is going to cost you $3,300 in mortgage assuming a 10k down payment.
 

WJK

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Here is your book title:

Trailer Parks & Troopers

“How I stayed in the Fastlane and lived to tell about it.”
The Troopers are 45 minutes away. We take care of most of the problems ourselves. We call out the law as our last response. And I have some wonderful tenants here. jWhen something happens, I get a bunch of phone calls. They know that I care. We're all in this together. But, sometimes things get out of hand.
 
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Update... It's been a hard week. A guest of one of my tenants tried to burn down my trailer where they lived -- with their son in it -- who was her ex and not my tenant. She loudly stated that she was trying to kill him. She took videos, with selfies, as she danced and screamed in front of the fire. No one was hurt. The Trooper came out and arrested the arsonist. She slipped out of her handcuffs and disabled their camera in the back seat of their car. They put her into a van. Then she slipped out of the second pair of handcuffs, took off her clothes and set them on fire. The trailer has $30,000 worth of damage that I'll have to cover. It will take months to get it ready to rent again. At least no one was injured, and they have her in jail. They are taking her to the mental hospital for evaluation. I've got to write a book about all of this. It would be a best seller. And the beat goes on, and the beat goes on...
Oh the Trailer park Romeo and Juliet. Sorry to know the love lost romance will cost you money and more importantly time. It could have been worse but you have the correct attitude.

Thanks for the post and keeping the thread alive. I hope it will help others in the future. Will make it a priority to post more regularly. Let me know how you deal with the insurance.

Best of luck
 
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@Major Great thread!
any updates on your journey?
you mentioned you bought a camera and may start taking pictures/ videos, did you ever get around to doing that?
Yes I am in the process of creating a series. Have learned alot about editing and content creation over the past few months. Will make a post when its up and running
 
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:cool:

@Major Thanks! Closed on 3rd park this year, looking to acquire 2 more medium-sized parks in 2019 and complete some cash-out refi's next year for some wealth events :cool::cool:

I'm really interested in the concept of an entity for owning the park (real property/parcel), then a separate entity owning any rentals/flips/sales of the individual MH's, and then once we scale up, another entity for the Park Management operations. Do you have any recommended reading sources for entity creation, structuring, etc?
I am also looking at rolling up some repairs and general contracting into one of the entities, as I am finding that there are VERY few MH renovation or remodel companies that are timely or interested in actually working haha.

Thanks for all the insights so far! You going to MHU Boot Camp in January? (Orlando)

Thanks for the reply. Do not trap of running a mobile home part/repair business and a mobile home park landlord/investor. Too many items to keep going and you will end up spending just enough time on one business just to make the other suffer.

I wish I could point you to one particular source for entity creation. But as the political and regulations change as it seems year of year books become outdated. It also becomes more important of your overall goal and strategy before you even setup or create an entity.

Best advise is to divide and conquer. Keep all investments and holding companies separate. And if I can give you any advise, make a management company separate from any investment and hire yourself as a management firm to oversee your investment. This is vital as you will be sued more times then you can count over the years. God forbid you have an incident on your property and are managing it as the owner of the entity the park was formed, or even worse, managing under an entity that has multiple properties under its title, you will be taken to the cleaners.

Three weeks ago I just received 8 letters from the South Carolina Human Affairs Department that all 8 of the filed discrimination cases were dropped with no cuase. The plaintiffs walked with no recourse. Why? Because I followed my rule and used a management company as an essential shell corp and realized there were no assets attached therefor no right mind attorney would take the case for suit on worthless entity, unless blatant FHA regulations were violated in plain sight.

If in doubt consult a local attorney. The best ones are smaller offices. Look for a attorney like the one from "Better Call Sal" tv show.
 
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@EAChi I am also looking for similar info, I have multiple parks under ownership and am constantly exposed to opportunities to re-sell homes and the majority of buyers in my area are asking for a rent-to-own option, as they don't have cash to purchase a MH outright.



@Major Is that the de minimus provision? Where basically you operate under a meaningful threshold such that you wouldn't be prosecuted? i.e. Selling 1 home per year on payments vs. 1,000 per year?
I am closing on a park this month which will come with 10 homes + titles and I will be looking to sell them all, so as to be a 100% lot-rental-only community after that point, massively increasing the passivity grade of the property. Did you have your attorney draft your agreement for you? I've heard rumours of judges in my State rejecting rent credit program as a disguised mortgage....

If in doubt speak with a local attorney. You can sell as many as you want. The dodd frank rule need not apply here.
 

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