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It’s been kinda quiet out there.
What’s everyone up to these days?
Jackie,
Here’s a deal I’m looking at and would appreciate some pointers on – and after that, a little info on what’s going on.
Found a small trailer park (4 owned/rented, 2 additional open sites, with 3/2 home that owners live in) PLUS . Owners asking $155k which is very unrealistic – I know I can get them down. Home value is about $80k (if without 4 MHs siting nextdoor), each MH is $5k max (all in ok shape at best based on exterior walk around – will do interior in about a week), and estimating $3k each for the two unused MH sites for a MAO of $106 (though anticipating an initial offer of $85 cash or $95k with cash & terms)
More background:
– it was under contract and the buyer couldn’t get financing; I don’t know what that contract price was
– the husband’s health (multiple bypass operations so is slowed) so the wife wants to sell to give her husband a break; as he was weedeating and doing maintenance repairs when I arrived
– the MHs are small single wides (2 – 12×45; 2 – 12×65; other 2 sites could fit 12×65)
– monthly income on the 4 trailers is $1750
– two tenants over 5 yrs, one over 2 yrs, one just hit one yr
– home should rent for $850-950
– big negative: an RE agent is advertising for the sellers, however the property has been listed for over 6 mos that I know of
– possible plus: there is an adjoining lot that is city land of a closed off road that can probably be bought for very cheap to add 2 – 4 more MH sitesThe deal breaker at the moment is that the owners have a $70k loan that is going to balloon in two yrs. I need more info on the loan to see if I can work their loan into the equation even for a couple years. Alternately, I’ll partner with one private lender I work with who will consider a MH deal – planning to present this to him when he’s available next week.
Any other thoughts on how to structure something like this?
Otherwise, just got some retainer $$$ for a lease-option home that should be occupied about June 1. Down to one non-performing home that’s for sale/lease-option/rent and one rental that just went empty – talking to a couple folks on it already.
Talking to unrealistic sellers just about every day – upside/down, unrealistic pricing, no to owner financing, i.e. all the standard responses. Also just starting a short sale again after several months hiatus from loss mitigators – its an unkept house with partially demo’d interior in a good subdivision. Worth a few faxes/phone calls to assess the LMs willingness to make a deal.
Thanks for having Pete on the conf call tonight – great as always!!
Hank
Hey Hank
Glad to hear from you.
The park is over priced it appears.
What about just getting a master lease on the park and homes with an option for 5 years out.
It solves the problem for the owners — no more maintenance.
You can collect the cash flow, clean up the park, then sell later for a profit.
Meanwhile – no sale – no real estate agent.
And, you can always walk away or sell your option or sell your master lease position.
It is a lot safer than buying the park.Just because there is land next door does not mean you could get it zones for mobile homes.
If you do decide to buy, just take over payments on the $70k loan and tell the sellers they will get paid more after you clean up the park and get it re-sold.
Two years is not much time, but you may be able to negotiate an extension.Jack says he is buying mobile home parks at $5k a lot now. The mobile homes have no value in the price.
proceed with caution
jackie
Hank, are you making offers to the unrealistic people? Even though they are off their rockers, making an offer gives them something to think about. I learned last summer that not making enough offers will cripple your business. I am determined not to repeat that again.
You are right about one thing though, no one seems to understand the market we are in. They are all asking for top dollar and cash. That era is gone and won’t likely be back soon.
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