Just hold back on expenses. You're most likely not going to get back all the money you invest in repairs and the money you do get you'll get years later. Whatever someone can pay for a down payment and monthly payment will be the same whether the house has new carpet or not. So if you install new carpet and jack the price up, that means the length of the loan will be longer so you get that money at the very end.

I'm telling you, the condition isn't as important as you think. I live in Austin and the first home didn't have working AC. I wish I had better pics but here is the house I sold. Only difference, I spent $40 on a stove and pushed it in the cabinets - didnt even hook it up but I disclosed that. And note the condition of the carpet. It looks pretty similar to yours. In addition to it being old and ugly, it was a standard 10' size for a room that was bigger. The people didn't install another section to cover the room. the "wall to wall" carpet was laid half a foot from the wall all around with the pads exposed. I had a few people who wouldn't even walk in the door after I opened it. Oh, and these were the pics I took for my ads which meant I cleaned the house and tried to get the best angles possible.

You don't want to do any of that crap. Fix the plumbing and any broken windows, clean it, and sell it. Can you get more with new carpet? Yup. But I'm telling you that you want to keep your expenses down on the low-end homes. Save the $500 in carpet for the home you can sell for $20k. Don't paint, don't carpet. Get the home in MINIMAL LIVABLE CONDITION. Follow Lonnie's system - its been proven to work by a lot of people.

i would never fix these items on this home. My opinion, and you gotta consider your market.

Don't do it. DO NOT spend $2k fixing this home. Spend $500 or less, sell it quick, and move onto the next one. You ignore this advice at your peril. You do NOT want to have $3k wrapped up in a home this old. Lonnie's system works, and it does not include dropping large chunks of change on cosmetic repairs.

The more I think about it the more I agree with you, I'm gonna leave the carpets as is, just vacuum and maybe shampoo them, they weren't even thaaaat bad. Fix the few broken windows and the one small hole in the floor in the one bedroom. Buy some cheap paint and paint the cupboards in the kitchen and the back bedroom walls (other room has wood paneling that looks in good shape), give the bathroom a clean and fix the plumbing if it needs to be fixed. Paint the deck and one side of the home white to match it with the other exterior walls. The max I wanna be in this house for is 1K including purchase price and hopefully sell it on a note for 4k

mini update:

Bought the place today for $250, the PM was one of the nicest people i've ever met, she took the time to explain everything to me with regards to how things work in Oklahoma. She gave me till the 1st June before she started charging lot rent and didnt make me put down a lot deposit. She also offered me a couple similar fixer uppers in her park but most are a lot worse than this one (fire damage etc) so i'm gonna see how this goes before taking on something like that. She emphasized on having as much details on paper as possible to make life easier for me if the time comes to evict.

According to the PM i'm liable for the lot rent and water/electricity if the buyer doesnt pay, so she suggested that the buyer pay me for everything while they sending me checks for the home and I just send them payments for the lot rent and water/electricity, so that I can keep tabs on if the tenants are paying or not cos she is just way to busy to be able to keep tabs and contact every investor if their buyer isnt paying. Anybody have suggestions on other ways of handling this?

Apparently its not as easy as calling the sheriff and getting them kicked out if they don't pay. We have to go to court if they refuse to leave and the whole process will take about a month to get a stubborn buyer out that isnt paying. Still not as bad as SFH evictions but there are some fees involved that make it a pain but still not deterring me.

Oklahoma is a state where the mobile home has to be in the buyers name unlike Texas and some other states. She said I shouldn't bother with a dealers license just yet until I get a little deeper into this business.

The one thing she didnt explain to me cos its not something she deals with is how their 'notes' or mortgage system works for the homes they sell in the park, Its all done online by the head office of the corporation that owns this MHP.

So if the mobile home title is on the buyers name and we create a note using the template in the back of DOW, how could I amend that form to work with OK law that the title has to stay in the buyers name? The current form in the back of DOW says that the title stays in the Note holders name.

Sorry if i'm asking questions that may have been answered in DOW but all the talk of having everything documented is making me nervous and I just wanna run it past you more experienced guys in this field.

So I would make a sale in this order once i've found a buyer and agreed on a price/terms:

-Fill out a mobile home Sale agreement (the one at the back of DOW looks pretty straightforward except for the sales tax part, not sure if I have to do anything with that or not)

-Create a note for the loan amount

-Once all downpayments and deposits have been paid and they have been approved by the park, I take them to the tag agency to get the title put in their name

Then i'll be covered?

I appreciate your responses and help

Congrats. Sounds like you got a great deal.

If it were me, I wouldn't want to get involved in the lot rent exchange. I understand that you're responsible in case they fail to pay, but the PM suggested you become the primary. Makes sense for her to tell you that because the PM is looking for the easiest way to get lot rent.

Did you sign a lease with the park? IANAL but I don't know how she'd hold you liable if you didn't sign anything.

I would make the new buyers pay the park as they normally would. The first month or two call the PM on the 5th of the month and ask to make sure they paid.


similar to Texas.

The title is in the buyer's name in Texas too. I am listed as a lien holder and would file a foreclosure notice with the state if the buyer defaults.

And I wouldn't bother with a license yet if I were you. Find out how many you (and your wife) can do in OK.

Just change it to say youre listed lien holder on the title.

1. Have them put a deposit down on your house. I have had them put $100-200 down and sign a receipt saying that it is refundable if they don't get approved by the park and is non refundable if approved or if they don't apply.

2. Have them apply with the park and hopefully get approved.

3. Perform your own screening on the buyer.

4. Have a closing date where everyone signs your sales agreement, lien agreement, and all required state docs.

5. Go down (or mail) the required state docs to the department that oversees mobile home sales. Buyer doesnt need to be involved in this.

I don't know if I'm not being clear or what. Do what you want, but I'm telling you in no uncertain terms that you are going to be better off not doing the cosmetic repairs. Buy em quick, sell em as is. That is the Lonnie way. Personally, I'd prob fix the broken windows and the hole in the floor and sell it for $3k. Rehabbing is for flippers. You aren't a flipper. So don't act like one.

I'd start by going to the creonline.com MH forum and asking if there is anyone in OK that has forms you can use. I'm sure there are other lonnie dealers on that site.

Where I live MHs are treated exactly like a vehicle. Why not just go down to whatever office handles titles and registration and start asking questions? Get it straight from the horse's mouth.

In my state, you have to title the home in the buyer's name and list yourself as the lien holder. The title is held by the State until the lien is released by me. In some states the lienholder holds a physical title. In any case, you definitely don't want the buyer to hold it. Sales tax depends on local laws.

Do it like this:

1) purchase agreement
2) application & approval by the park
3) closing - receipt of payments, note signing, sign over title.

Mini update-

Think I might have a buyer lined up to take the place off my hands without even doing a single thing to it. I was browsing CL a couple nights ago and saw this ad that was posted in the wrong place:

We are a large family in urgent need of an old house or older mobile home to rent or rent to own. We need at a 3 bedroom. We would like to be able to remodel or repair, or do other work in exchange for the rent if possible or for low rent. We would like any where in Tulsa, Sand Springs, West Tulsa, or around Morris or Okmulgee Area.

I figured what the hell and shot them an email and was brutally honest about the condition of the home and the work it might need, they went to see it and said its exactly what they were looking for. Amongst the emails I told them I can let them have it for $1750 cash or finance it for them with a purchase price of $2250 and $450 down.

Now I can judge from the emails that they dont have a whole lot money, but i'm willing to be pretty flexible with them as this was my learning curve and anything I make is cool by me, plus i'd love to get it sold before the end of the month to avoid lot rent.

Either way I think I can come out nicely on this deal whatever agreement we make.

edit- I'm still new to all this and just excited about my first possible sale, not even sure how many contacts like this even materialize into deals but we'll see how it goes.

Thanks again to everyone for their patience and advice

Great job, Brandy. For the first deal I did, I had about ten people express sincere interest, four people apply with the park, and two people put deposits down. My buddy down here had someone back out on the date of the closing once she read the finance paperwork. While that's great news you already have someone interested in the house, don't hang your hopes on selling to them and certainly don't stop marketing the house until you have closed.

I really havent marketed the place, I just saw this random post and figured they might wanna buy without me having to work on it. I had/have plans to go work on it once the chance of rain disappears. Those people are applying with the park now so we'll see what happens. I'm feeling confident tho, the PM said for that lot especially the requirements arent very high at all for my buyer....no felonies and vicious dogs, have a job and you're in.

But you're right, I def shouldn't get too excited over the first person who shows interest.

bwana/spex,

Could you guys share your thoughts on selling/buying notes?

What realistic amount do you think someone can get when selling their mobile home note?
(50c to the dollar? 70c to the dollar? more? less?)

Are there different ways of selling notes?

If someone buys your note and the person you created the note with defaults, is it your duty to resell the home for them and do the repossessing? Is that just in your agreement when selling your note?

Best way to find a note buyer? Best way to find great deals on notes you might wanna buy?

Thanks in advance for any responses

it depends on if you're offering recourse or not, buyer's credit, down payment, etc. Probably .70 to .75 or so though as an average.

Don't understand question.

Not necessarily. It depends on how you negotiate the deal. If its a recourse deal, yes.

PM me your email and I might be able to get you in contact w/ some guys i know that would sell you notes.

Any 2+2ers doing/trying Lonnie Deals in the phoenix area? For that matter anywhere within 7-8 hours of San diego

I don't suppose mobile homes are eligible for the $8000 tax credit?

Is there a resource available that will show you recent mobile home sale prices?

They might be, but not hte full $8000. It's based on a percentage of the price you paid. I think its 10% but could be wrong. So you'd need to buy an $80,000 mobile home (even if it were eligible, which I'm not sure).

Yes, and now that I know that I've given my previous buyers the paperwork for it.

One guy I know takes a second lien out on the house for the amount of the tax credit, assists in filing it and then has it due once the home buyer receives the check.

edit: and Tom's right in that it is 10% of the purchase price up to $8000.

Dont think so but there is a NADA book which is kind of like the blue book for mobile homes. Thing is those are retail prices which is not the market this type of stuff is geared towards. It takes a while but the best way to find out the value of a home in your market is by talking to people in the area.

Just took a look at a property and snapped some pictures. The buyer is asking for $5900 including appliances (washer/dryer too), or $4900 without.

Pictures


It is a 1995 Redman and appears to be in great shape compared to others I have looked at in this price range. It has 2 bedrooms, 1 bath, central air, and is 12 x 65.

The shed (10 x 12), storage unit, and porch are all included.

This seems like a good chance for a Lonnie Deal. What do you guys think? I was thinking of offering 4k without appliances and selling for ~12k on a note. Thoughts?

Yeah that looks ok Fudgenut. Once you get all their crap out of there it should be a pretty nice, clean mobile home. Going over $4k might be a little much for your first investment, as there are tons out there for <$2k that would be lower risk, if you are risk averse that is. The shed and storage unit are prob worth a few hundred themselves.

If your number estimates are accurate it sounds like a great deal. Those numbers would make sense in my area.

great thread imo

It's not worth it to pay the extra $1000 for appliances, is it? I could probably get decent ones on Craigslist for less than half of that, right?

Yeah prob not worth it for $1000. I'm buying a MH today or tomorrow (guy is sloooooow finishing the fixups) and I gave him an extra $100 to purchase and install a stove and microwave because it didn't have either. The MH doesn't have a washer or dryer and I'm just not including that in the sale because people don't really care if it has one or not IMO. I will hopefully have good updates in the next week or so as this deal seems very, very good.

Fudge, definitely not worth $1000. you could get them for a fraction of that off CL - probably $250 or less. And don't replace the washer/dryer.


z, if it were me, I'd close on the deal regardless of repairs being completed. The reason most people are selling their MH cheap is because they don't want to go through the work and headache involved in getting more money. That's not the type of person who is going to bust his butt to work on repairs. Close when you have the opportunity before something goes wrong.