(Note: Since I’ve received a lot of requests for more case studies, I thought I’d make a post on another one. Enjoy!)
The sellers had actually found me on this one via a friend. When I first talked with them, the sellers told me the home had been vacant for over 6 months. They had met with a few people who seemed interested in the home but told me they didn’t get anyone they thought was serious about buying. So, I made an appointment to check out the home.
As it turns out, the home was in a park I was already familiar with. Though, it was not at the top of my list of preferred parks to work with. This park was not a high end park. It was more of a middle of the road kind of park leaning more towards the lower end of the scale.
The story with the park was that I already had a relationship with the park manager and the owners. For years, they had been trying to get me to work in their park. The problem was that the park is mismanaged and attracts a more lower end type of clientele. Just driving around the park, I can spot the signs – potholes, loose dogs, unkept yards, deteriorating board paneling on homes, broken down fences, etc. To be honest, it just wasn’t my type of park.
Now, the park was not this way before. In fact, one of my favorite parks down the street used to own this exact park. The problem was when the new owners bought it – they knew nothing about the mobile home biz. They just had money and had heard mobile home parks were goldmines.
(Note: For those who missed it, you may want to check out a video I recently did about Mobile Homes Vs. Mobile Home Parks).
According to the park manager of one of my favorite parks down the street, the new owners of this park paid way too much for this park giving them an offer they couldn’t refuse. In turn, with new ownership and management – this park went downhill. Fast.
Getting back to the story, I knew beforehand I was not going to do business in this park. Going in, my exit strategy was to move the home to one of my favorite parks should I be interested in the home after viewing it.
(Note: It’s always a good idea to have an exit strategy beforehand. Know what you plan to do (and stick with it!) before you start meeting with sellers).
Once I arrived at the home, I knew it was something I was interested in. It was a 1998, 4 bedroom/2 bath, 16×80 home (my favorite!). Plus, there was really no work to be done to the home except for some cleaning. The sellers had kept it in very good condition. Now, all we had to do was negotiate price.
In the beginning, they were asking 25k. So, we had to do a lot of back and forth. I took a few more trips and met back up with them over the course of a few months. After months of negotiating and building rapport, we finally settled on 13k.
(Note: For those who may be interested, feel free to check out this video my pal Patrick did on getting private money for your mobile home deals).
So, then what? Well, when we were in negotiations I had checked around with my favorite parks to see what lots they had available (i.e. size and width specifications). And, it just so happened my favorite park had just the perfect spot for me.
Doing my due diligence, I checked out the lot and made sure it was able to handle the utilities of the home. In this case, it was easy since the home was all electric – it could power up to 200 amps.
Once I checked out the lot, I let the park manager of my favorite park know to just hold it for me. And, the park manager did just that!
(Note: Regarding moving homes, I have a deal now with my favorite parks where they pay for my moving costs if I fill a lot. At this point in my career, I receive free lot rent as well. However, it has not always been like this. In the beginning, what’s going to matter is building relationships which do take time).
After I confirmed a lot was in place to move the home to, I then made arrangements with the sellers to close on the home. Now, before we closed – we had to meet with the park manager of the park where the home sat to inform them of the sale and my intent to move the home. And, let me tell you – this got a bit uncomfortable.
While in the office, the park manager tried to convince me to keep the home in the park and even tried to entice me with free lot rent. Though, I stood my ground and told the park manager – I had already promised the home to another park and I’m just not the type to go back on my word.
Then, the park manager asked if there was anything they could do to change my mind. I said, “No, I just can’t back out of a promise.” And, the park manager told me they wished I could do business in their park and to just keep in touch.
Afterwards, the sellers and I closed on the home. And, this was cause for a celebration. They told me they felt like they knew me so well since we had spent so much time together. Once we closed, the sellers asked me if I would like to join them for a drink at a bar. I politely declined but told them to have one for me. And, we parted ways.
(Note: Spending a lot of time with people allows them to get to know you and you to get to know them. In sales, this is called building rapport. Though it is good to build relationships, I’m one to have a line I draw when it comes to business. I know some may have different views on the subject. But, I make it a point not to drink while on the job. At this point in my career, I do have a very close network in this biz but have not accepted any invitations for drinks no matter how harmless it may seem. Though, that’s just me).
To make a long story short, we moved the home to my favorite park the next day. We got it all hooked up and cleaned. I brought in my professional cleaning crew. Once cleaned, the home sparkled.
Here are some pics of the inside:
Living Room
Kitchen (stove and refrigerator included)
Washer and Dryer (included)
Master Bedroom
Bathroom
(Note: One thing I did forget to do was to hose down the dirt on the skirting outside before we put the home on the market. We actually used the existing skirting to re-skirt the home once it arrived at the new location. A lesson learned for next time!)
The home went fast, it only took a week! I found a family who had relatives already living in the park – I received $1500 down and it cash flows in the $500/month range for 10 years.
(Note: Due to the economic times, I had to take less down on this one as compared to previous deals. In addition to what is put down, residents who qualify still need to come up with first month’s lot rent and a deposit for the park. That’s a serious chunk of change for most folks. Though, the important thing is the home is in my favorite park with a good paying family).
Though this deal took a bit of time and negotiating back and forth, all my hard work paid off. It made for another nice and relaxing cash flow payday for many years to come.
Happy investing!
p.s. Feel free to leave comments on any post either here and/or my Facebook Page. Comments are always welcome, thanks for reading!
