Mobile Home Park Mastery: Episode 20

Insider Secrets to Buying Used Mobile Homes

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In this second part of a five-part series, we’re going to review the insider secrets to properly buying a used mobile home for your mobile home park. With so many homes to choose from, it’s vital that you don’t make any rookie errors – and there are some that you would never guess. Frank’s bought literally thousands of mobile homes over the past two decades – both new and used – and he wanted to highlight some important points to save you thousands of dollars.

Episode Transcript

Let's go on a mobile home buying shopping spree. This is Frank Rolfe with Mobile Home Park Mastery, want to go over the five insider secrets to buying used mobile homes. Now, the first one, and I promise you this one is an absolute etched in stone given, you never want to buy a used mobile home that does not have more than one bedroom. Now, when I first got in the business and I got my first property, Glen Haven, I had no idea what I was doing. So when it came to filling vacant lots, I was always shopping around in the paper for mobile homes that were for sale, old, used homes, but I had no idea what I was really looking for.

And one time I saw this really, really good efficiency mobile home. Now, you're going to say, "What the heck is an efficiency mobile home?" Well I'd never seen one either, but I was really intrigued by it. It was a mobile home that on one wall had a sliding glass door that opened up to the outside, and I thought, "Wow, if you take that sliding glass door, you mend a giant deck on it, think how cool that would be." So you go in the stairs to the front door, go in the mobile home, had this big living area with sliding glass door that went out to a really cool deck. So I thought, "I'll take it. I can make this into something really remarkable. People will really want this home."

But the trade off was it didn't have a bedroom. It had this giant living area and it had a kitchen and it had a bathroom, but that's all that it had. It had no bedroom. I'm not sure why they built this to be honest with you. To me, it was something that probably would work well, maybe in California, but maybe not in Texas. But not knowing any better, I bought the home. I brought it back to Glen Haven. I built the really, really cool deck. I built the stairs. I cleaned it up. I repainted the inside. I thought it was the coolest mobile home of all time. I ran ads in the paper. Didn't say how many bedrooms, just, "Hey, I got a mobile home for sale or rent."

And the people started coming in and they'd all walk in and they walk out. They'd walk in and they'd walk out. They'd walk in and they'd walk out. I'd say, "Why are you not buying this thing?" And they say, "Well you don't have no bedroom. I don't even know how to approach the idea of living in a mobile home with no bedroom." Well, you know, they make efficiency apartments, there's efficiency condos. I thought, "No big deal, you just put in a hide-a-bed, and your set to go." Well it doesn't matter what I thought. The customers didn't want it at all. It was a horrible, horrible fail.

I considered maybe pulling it out of the park, but then I thought, "Well, that'll cost $5 thousand to pull it out. I've got to find a way to make this work." So I went around and I bought some used furniture. I went ahead and bought a used hide-a-bed. I tried anything to make it palatable to somebody, and lo and behold, eventually by dropping the price and putting furniture in it, I found someone who would go ahead and take it. However, they didn't last long. I soon found that my little efficiency mobile home was nothing more than an incubator for people to hang out in till they could find at least a home that had bedrooms in it. Not a very satisfactory experiment.

So next thing you know, I'm out looking for homes again, and I see a one bedroom. This is a much more modern one bedroom, pitched roof, would be one of the most modern homes in Glen Haven. I was sold. This is perfect. My efficiency, that was a fail, but surely a brand newish home with one bedroom is a real winner. So I bought that. I brought it in. I built the front steps, back steps, cleaned it, painted it, put the ad in the paper, people came out, would walk in, they'd walk out. Nothing yet again. Couldn't give the darn thing away. I must have gone through 60 customers before I finally found anyone who would live in it. And kind of like the home that was the efficiency, it was really just an incubator till people could find a two bedroom mobile home.

So I just churned people, churn and churn and churned. The moral I learned then is never buy a one bedroom home. Certainly never an efficiency, but also don't do a one bedroom. Now why is that? I showed that one bedroom to a lots of people who it would have been perfect for. Lots of older men and women, was perfectly sized, very pleasant. People just need more space. Mobile homes just are not very big things. And so a lot of people need that second bedroom so they have some spot to put in their hobbies, or bookcases, or have a guest stay. Something like that. It's really, really hard to move one bedroom homes. So the first insider secret to buying used mobile homes is maybe you should stay away from those one bedrooms unless you want to sit on that home for a long, long period of time.

Number two insider secret, never buy homes that are less than 14 feet wide. I've bought 12 foot, I've bought 10 foot. Man, are those a problem. The 14 foot wide home appeals to everybody. On a 14 wide home, you're going to have a bedroom, a master bedroom that will hold a king size bed and whatever other items they want to place in there, and that's a huge hit with the customer. But as you go progressively smaller than 14, what happens is you give up on that bed size. So a 12 wide home might be able to hold a queen size bed. When you get down to 8 foot wide, only a double size bed will fit. So try and stick with the 14 wide homes.

Now, there's still a very, very large number of homes that are 14 wide and bigger all the way back to the 1980s. So you certainly can find some things. That gives you nearly a 30 year span to find a used home in. But don't venture back into those 70s homes unless you are willing to really, really have to wait to get a customer, because 14 wide makes all of the difference. Number three insider secret, stay away from water problems. Water's the kryptonite to the mobile home. It is what can take a nice, beautiful looking sturdy mobile home and in a matter of moments turn it into complete mush, and mold, and all kinds of issues. Never buy a used mobile home that has any evidence of having any water problems.

Just stay completely away from them. If you look in a mobile home and you see that the ceiling in one room, or throughout the home, is sagging in the middle, what's happened there is there's been water intrusion from the roof. That ceiling has become wet and has started to sag with the weight of the water and as it's turning more into mush. And you never want to touch those homes. Even if you think, "Well, I could take that home and probably what? Take some little rose medallion nails and nail the think back up." It's not getting the ceiling back up that's the problem, it's the fact of what else has the water done? You have mold in the home. You have other weak spots in the walls. Has your wiring been affected? Is your flooring affected? Just too many concerns.

Bear in mind, this is 2017, 2018, in America. Lot of litigation issues. The last thing you want to do is be out there selling or renting structures that have the potential of having mold in them, even if it's harmless. This is America. You really don't want to be out there with that kind of litigation hanging over your head. So just stay away from homes that have water problems. Just let them go to the next guy. Keep shopping. Look for something different. Next thing, next insider secret, be thinking that it's going to cost about $4 thousand dollars on average to fix a typical mobile home that you're going to buy that's used.

So that should sober you up. It always seems to cost about 4 thousand. 2 thousand parts, 2 thousand labor. That means when you're out looking at a old used home, and that old used home is $6 thousand dollars, it's probably more like 10 thousand. And then you got $5 thousand to move it. So you got to buy, if you're going to be a really good shopper, homes that are very, very cheap and that are in very, very good condition. If you can buy a home that needs only a thousand dollars of work, and you can buy that home for $3 thousand, now you're talking. Now you're going to have a home in your park that's going to be under 10 thousand bucks. But always remember, it does cost significant money to fix these things.

And for some reason, it always seems to average about $4 thousand in most cases unless you're a really, really good shopper. All it takes to blow your budget is the furnace is broken. All it takes to wreck your budget is you've got some additional plumbing issues, wiring issues. So always put buffer in there in your brain it may cost you as much to $4 thousand to move it ... I'm sorry, to fix it, and another 5 thousand to move it. So if you're going to be a good mobile home shopper, you've got to watch for situations where the homes are very, very inexpensive and are in very, very good repair, or those costs will mound up very, very quickly.

Don't forget, everything you do in the world of used mobile homes is taking away from money you could have used towards a different kind of home. So if you're going to be putting $15 thousand in the 1980s home, I would have to say, "What are you thinking?" You could go ahead and get rid of that home and bring in a 1990s home with bigger rooms, better layout, newer design, much more attractive to the customer for the same price. So it costs money to fix these things, it costs roughly about 4 thousand on average. Always remember that when you're out shopping for the homes, the potential you've got, that you may have to stick another 4 thousand in the home, and as a result, you've got to buy them really cheap and in really, really good repair.

The last insider secret is you've got to have a title. Oh my gosh, I cannot emphasize to you enough how dreadful it is to get a title on a mobile home in America today. Let me give you just a quick example of how bad it is, how frustrating it is. I once had a mobile home in a mobile home park that I purchased and mom and pop had everything together to send in and get the title decades earlier, but they never mailed it. I don't know why. He had every other title except this one. But he had a beautiful file. It had the bill of sale, it had all correspondence, it had everything. It even had the application all filled out. It even had a check attached. It even had a rusted paperclip holding the check onto the paperwork.

But for whatever reason, he did not mail it in. All I can imagine he did was he put it in the file thinking, "I'll mail that in tomorrow," and he never did. He probably just didn't have a stamp is what happened. So he put it in the file, thought, "I'll go get a stamp," later he bought the stamps, but he forgot, "Oh yeah, I got to send in that title application." So what happened was the title's sitting there, it's exactly perfectly filled out, it's got a check, "Hey I can change the amount of the check, right?" So I write this really nice letter to the Texas Department of Transportation.

And I said, "Here, I've got this mobile home, and the title application is perfect as you can see, and I've got the bill of sale and everything here. But it's not on your form today. It's on the form as it was 20, 30 years ago. But the form is not changed. All that is changed is your logo. So please find all the paperwork and a new check and isn't that a interesting story? And please give me my title and send it away." About a month later, I get it back, denied. No reason why. Just denied. So I call, and if you've ever called the folks on mobile home titles, and this isn't true in all states, but in most, you can be on hold for 10 minutes, 30 minutes, an hour.

So you put it on speakerphone, you do other things while you're waiting for someone to pick up. You hope that when they pick up you can grab the phone before they hang up, or you have to do it all over again. So I finally get to somebody, and I tell them my sad story of how I come to have this paperwork that's perfect and ready to go, but has the wrong logo on it. And they say, "Well I'm sorry. We will not take it unless it has the modern logo." Now first off, think how stupid that is. Why can you not take the application which has all of the correct information notarized because of a stupid logo. I could not understand that, but no matter what I said, they were adamant, "No. Has to have the current logo on it."

I guess that is how they know that it's what? In keeping with the modern code? They too lazy to proofread it? I'm not really sure. So I said, "Well then, what do I do? Because this thing is like 20, 30 years old, does not have the modern logo." And here's what the lady said. She said, "Okay, here's what you got to do. All you have to do is go ahead and fill it out again on the app with the new logo and get it signed and notarized. It's not that big of deal." So I said, "Well, in case you told me that, I already have talked to mom and pop who I bought the park from, and they're more than happy to sign and notarize the new one, but the person they bought the home from is dead. So what do I do?"

They said, "Well, here's what you do. You get a copy of the will of the person who died, show who they left the home to, contact that person and have that person sign and notarize it." Can you imagine how impossible that would be? I don't honestly know how you get a will from somebody who died in a mobile home park two decades ago. Where do even get that data? And then how would I even find the heir? And what if the will doesn't even stipulate what happens with the mobile homes. A lot of times, the heirs don't want mobile homes. And beyond that, they guy thought it sold it to the park owner, so it won't even reference the mobile home, right? Absolutely absurd.

So the moral that it is, the titling industry on mobile homes is very, very difficult in America. I'll give you another story. I bought a mobile home, at an unpaid tax auction in Illinois a few years ago. So went all the way to Springfield, Illinois to buy a home that was located in a mobile home park that we owned. So I'm the high bidder, and they promise you at the auction, it's right there in the auction materials that if you buy at the auction, guarantee you'll have title to whatever you buy within 60 days, whether it's a stick built home, it could be a strip shopping center, piece of land. In this case, a mobile home.

So I buy the mobile home, 60 days comes by, I have nothing. I call the State of Illinois and say, "Hey, where is my title?" They say, "We're working on it." No deadline though. I call back another month, I said, "You promised it in 60, I've got nothing." They said, "Hey, we're working on it." I didn't get it for a year and a half. That's kind of how people look at mobile home titling. They don't look it as really being important. As a result, they back-burner it. And typically, in mobile home park title departments, or mobile home title departments in the US, you have a staff that is a paltry number based on how many applications that they have.

So titling is near a complete anarchy. The moral is, never, ever, ever buy a mobile home without a title. I don't care how good of deal it is. Don't do it. The brain damage that will happen to you for having to try and obtain that title is horrid. If you ask most mobile home park owners in America, "What is the worst thing that you can think of in the entire mobile home park industry?" Nine out of ten will say the titling. That's how bad it is. So don't do that to yourself. Don't go around buying mobile homes and just inviting new issues about getting titling. It's just not a good idea. Now on our next segment of this five part series, we're going to be talking about the insider secrets to remodeling mobile homes. This is Frank Rolfe with Mobile Home Park Mastery podcast, and we'll talk to you again soon.