How much due diligence are you doing when you are inspecting new homes? Is there anything in particular you should look for?

Not too terribly much when I'm checking the quality of the house in regards to furnace, wiring, AC, plumbing, etc. I check things myself as best I can and ask the seller about them. It's particularly hard when the electric is turned off on a house.

Another guy in town I know once scheduled an inspection on his with a turn around time of a week. There's way too much that can go wrong on a deal in a week if you sit around and wait for it close and I don't want someone else coming in a buying it out from under me.

The unknown variables are mostly factored into my buying price and it's a risk I'm taking that I've been luck on thus far.

Any updates?

Right now I’m in the middle of my third deal. I had to sit on the sidelines a few months and let my monthly payments on the other two grow enough to get the third deal.

For this newest deal I tried to game the system and have had marginal success. I’ve realized that the price of a MH itself (separate from any land consideration) can vary dramatically depending on the location. A MH in N Austin, which is generally middle class, sells for more than a home in S Austin, a blue collar area, and even more than a MH out in the country. There’s a park in N Austin that pays $6000 towards moving a home into their park and having it meet “community standards.”

I found a home about an hour away from Austin, moved it to N Austin and placed the sale sign out front yesterday. Money-wise, I’m not really coming out much better than had I done the standard deal of buying and selling w/out moving. Where I am coming out short on the deal is the amount of time this is taking. It’s been a slow process working with so many different entities involved in moving a home, hooking up services, having work done to meet the park’s “community standards”, etc. Where I am coming out ahead on this deal is that I have learned a lot more about the mobile home industry so in that sense the deal has been helpful. After this one is done, I’m going back to the standard type deal and in the immediate future would only get involved in moving one if the numbers were ridiculously generous.

ok, so i'm seriously looking into doing my first MH deal, are there any licenses or any other "paperwork" that are usually required to be doing these deals? if there might be, where could I find out what I need?

Depends on the state.

^i briefly tried to google information on what I would need but couldn't find anything concrete, fwiw the areas I would most likely to be doing business in are in OK and AR, around little rock and/or OKC. any suggestions on where to look?

City hall will have all the info you need.

There's info in this thread specific to OK by brandisbich. Check that and call your regulating state office. I'd google your state name and 'manufactured homes'

I purchased DOW a year ago and read it cover to cover. I've cut way back on the poker playing and am looking for a way to replace some of that side income.

I plan on re-reading the books this week and getting some of the other necessary items out of the way to get started (business cards, list of MHPs, local phone # etc), but had a few questions relating to North Carolina:

1) From the research I've found, usury rates in NC are set at 8% for personal loans. Does this rate apply to Lonnie style deals or are they in a different class because its backed by collateral/installment type loan?

2) Typical interest rate on your deals?

3) It also seems like NC law allows you to buy and sell 2 mobile homes a year w/o getting a dealer license. As the dealer license is relatively expensive and causes a few hassles, I'd like to avoid this option. Any tips on avoiding a license? Any experience with lease/options?

4) I need to go back through the legal templates in the back of Lonnie's book again but is it necessary to customize the forms based upon the state?

5? Anyone based in NC doing Lonnie deals? Would love to network and share stories/NC-specific tips/questions as I get started.

Thanks.

DrSues02

1. That interest rate seems surprising low to be the threshold for usury consideration. How do credit card companies operate in the state? I don't know the answer to your question, but would guess you could charge higher. I'd research it with your state if you're concerned.

2. I charge 13.5% on my deals.

3. If you're married, you can do deals under your spouses name as well. I went ahead and got my license because I don't want to mess w/ some of the hassles of working around the requirement. L/O is a possibility if the park will allow it. Some won't allow rentals and require the person living in the home be the owner on the title.

4. The DOW forms are fine to get started. If you start doing a few more deals, I'd recommend getting an attorney to review your forms for you.\

From my research, banks and credit card companies are exempt from state usury laws so the usury rate limit doesn't apply.

I'm going by this link and have seen this same passage quoted on a few different websites:

North Carolina Usury Law

Also, for me to find out for sure (on usury rates but also title transfer fees, process for reposession etc), generally best to call the DMV? state court house? some other agency?

Thanks for all the help.

DrSues02

Ask this question here.

First, Thanks for this thread, I wish I would have found it sooner. Just ordered DOW's. My wife and I have been considering purchasing a second property since there are so many foreclosures in our area, fixing, selling, rinse, repeat. Luckily I am handy and can do everything a mobile home would require other than the heat/ac but again luckily I have a cousin who can handle any of those problems contracted and insured. Also my father-in-law owns a hardware store so I get a substantial discount on home improvement items, which I figure would allow me to do more for less cost thus increasing profit. Another idea is to use a habitat for humanity store if there's one near you for fixtures/cabinets/windows etc. My mother turned me onto this idea after adding on a third bath to her home and was lucky enough to find brand new items at 70% less than a regular retail store. Something you may want to look into as many items are discounted heavily at these stores, especially those that came from previous constructions. So far here is what I have done in locating a possible mobile home:

First I checked CL but honestly I suck at using that site (any search tips, I tried google but couldn't find anything really helpful. I'm in Cleveland, OH so not near you at all). I did find two that seemed promising and sent emails for pics, additional info.

Second I searched google and came up with a list of MHP's in my area that I'm going to check out.

I also noticed on the DOW's order page that if you purchased an additional book you would recieve a cd with a bunch of additional contracts and forms that you could use. Is this worth it? It says the cd is usually $20 why not just buy the cd? I'm looking to keep the initial purchase as low as possible, but don't want to be in a bad neighborhood. Is the location as big a concern as I am making it out to be in my head. Thanks for the inspiration.

I imagine there's plenty of opportunity in the Clevland area to do this. Search the RE area and For Sale area of CL for "mobile home" and drive a few parks. You'll probably find a deal.

Don't get caught up in making major changes to the home. You'll never get the money back you would spend on fixtures even if you got them from Habitat.

I don't know anything about the DOW CD so I cant comment.

Location isn't that terribly important so don't get caught up on that. I would avoid the war-zone type parks and that's about it.

for those that have done some of these deals, how did you do your contracts when you first started out? this is kind of worrying me a bit and maybe keeping me from getting started as quickly as i'd like. I know there are some template agreements at the end of DOW but i've read that those might not be that good because of different local laws and regulations. Do you guys simply pay up and find a lawyer to write you some contracts from scratch or did you contact someone in the area that's doing similar deals and see what kind of forms they were using or did you do something else? all advice appreciated...thx

This one looks interesting, though it's about 45-55mins from where I live. Any thoughts?
http://cleveland.craigslist.org/reo/1437018889.html

Does anyone have any input or experience on selling notes after packaging up 3-4+ of these deals? What does the market look like as far as potential buyers, standard rate, and time spent per month servicing the notes if you end up going that route (anyone have or want to estimate default rates?).

I used the DOW contracts for the first one I did and then I had an attorney write the contracts for me.

Spex would probably recommend you ask on creonline to see what people are using in your state. That's one option. He has a lot more confidence in that forum than I do.

My immediate thought is I wouldn't drive that far for this kind of deal.

If this house were in my market, and close to me, it would definitely be worth checking out. You have to figure out if it's good for your market though. What could sell it for on financed terms?

I bought the books about a year ago and finally have some capital. I have all the tools required to do home repairs plus some experience/friends that can help so that won't be an issue. I'm in the Phoenix are and it looks like I can have a MH for anywhere from $1400 on up with lot rents from $35 on up. I have one issue though. It seems that every park around here is 55+ or at least 40+. I'm 21, will this cause problems with park owners/managers? I would assume not since I have no intention of living there.

Anyone from the Phoenix area want to go scout out the valley, talk to park owners, etc? I'd like to get started with this.

You gotta give him a call at least. He is moving to Florida and might be a desperate seller. If you can't get a particularly good discount, find out when he is planning to move. Then give him a call before then.

A couple friends and I are about to start doing some deals in our area, which has quite a few good places to get started in. However it is hard to find market data.

My idea is to call all of the parks in the area and pose as a college student doing a report on mobile home parks and ask the following questions:

1. About how many people leave the park every year.
2. How much does a mobile home sell for on average.
3. How long does it take for the average mobile home to sell.
4. How much do you charge for lot rent
5. What do you typically look for in an applicant to the park
6. What are the office hours
7. How many people's homes are repossessed every year.
8. What is the primary reason people leave the park.
9. Who are the park's biggest competitors in the area.
10. How many lots are in the park.
11. What makes your community better than the others.

I understand the park manager may not have the most accurate data on these questions. But at least it will help get some type of data.

Anyone think of other questions I might need to ask? Or comments on the questions?

Also, we will be calling from personal phones, and when we start doing the deals we will use a different phone and a different person will contact the park managers. I just thought this would be a good way to get a lot of data (albeit may be shaky data) quickly. Then we would go out to the parks and scout them to see if we felt the answers were at least somewhat accurate.

BigBad, I guess you could do that but I don't really see much benefit in being deceitful. You could call up, explain what you really want to do and ask a few questions. You may find a responsive PM who invites you in to the park to start doing deals.

I guess your right, I suppose I just felt that I would get more honest answers from the PM's if they felt they were talking to someone doing a report rather than an investor.