MiKessler Daily Investing Journal

Welcome to the DG.com family. The DG website is filled with information and inspiration. Congratulations on starting your daily journal. It is a great way to keep accountable for your daily effort and be able to share insight as to what you learn and run into each day. It is always fun to reflect back and see where you were, where you are today and where you want to be. I look forward to reading about your progress and future real estate deals. You can do it! Believe and Achieve! - Joe

Lately I have found it difficult to invest. My time has been very limited and I need to drop some of my obligations.

I have 3 homes i'm currently working on. These are Mobile homes. I leaned a new strategy a couple years ago with working with a few owners of MH communities.
I have been getting these home for Free or nearly free. I don't pay any lot rent until I sell the home, then the new home owner pays it.

I have picked up about 10 homes from this one owner, and he has a lot more.

I am learning how to step away from the job. I grew up building and remodeling homes. I have always been a huge part of the actual construction process. I just finished my first home, and I didn't do any of the work. It was hard for me to step away, but it worked out and looks pretty good. I have one main guy that does all the odds and ends, as well as all the paint. But I have a number of other sub contractors that will do flooring and such.

I need to learn how to step away even more. I am currently supplying materials for them still and I just don't have the time for that anymore. I am looking into a pre-paid visa card for them to use per job so they can pick up materials.

Well it is a work in progress, and love the challenge of getting better and learning to step away from the remodel.

Until tomorrow

Mike

Well i'm still rehabbing these few properties. I have my worker going through them right now. He is painting the second home on American Park drive. it is looking fantastic.

I have placed ads and have been getting calls. The problem is, i have been so busy that I haven't been able to even return those calls. I need to learn how to delegate this to someone else that can help so I can sell these faster.

When I had more time for my business I was able to sell these before I was even finished.

I have a number of buyers from my list I feel I can still sell this home to.

When I sell these 3 properties I will be able to bring in an additional $750 per month for the next 6-8 years. Not a bad deal

I think you may be the first coach who has actually started a journal here-congrats! I know Joe is now a coach too, but he started his journal long before that...

I also started my journal here when I first joined the DG site, and it helped me take action and keep myself accountable, but I haven't posted in it recently, because like you, I have been pretty busy too...

I wanted to suggest that you get a credit card that is specifically for your rei rehabbing; you can have your handyman go buy the materials and the stores can call you when he is ready to check out! I do that even out of state, and it works really well for me, especially my Home Depot card

Learning and progressing every day,

Valuni,

Thank you for the suggestion. I have been doing that lately because of my time constraints. I have accounts at a lot of places here locally where he can get most of the parts and such, but when he doesn't I have had them call me when he is ready to check out. Great suggestion thank you

I have been training his wife to help me sell these homes as well. She put up my for sale signs just 2 days ago and already has a buyer for it. She called me last night and said that it is a neighbor that has a daughter that wants to buy the home. She is moving from Louisiana to here within this month. So I am having my helper send her my application for the deal. I am planning on seller financing the home to her, so I take the application and I will qualify her this week.

We are already onto our next home, he is almost finished painting right now. Slowly it is working having others do the work i'm used to doing. It isn't exactly how I would have done it, but close enough to have it work, and I can pay them for their work.

Hi Mike!

Great to see you posting here! I still have a lot of deal in the pipeline. My LO deal fell through at least for the next 3 months. The owner decided to list it with a realtor.

We talked once about getting bandit signs cheep. Where do you suggest I look to get a 4 X 8 sheet of yellow chloroplast board?

Thanks and looking forward to reading your posts!

Brian -- from Iowa

Almost forgot. A seller's mom called me and said her daughter has a mobile home for sale. Apparently she is getting evicted. Any suggestions on how I should proceed to buy this home?

Brian

Yes on that home find out if she is motivated first and if she is then you can find out what she needs that is always the first thing.

I like to differentiate what the seller wants and what they need. It will take a few find out questions to find the difference between the two. You will be making your offer around what they need

I usually will ask what they owe on the home, because I like purchasing them with owner financing. I hate to put all of the purchase money down on the home.

Before you purchase any mobile home you need to do all of the following:

1. contact the MH community and find out what a buyer has to do to be approved into the community
2. Find your buyer, have them get approved with the community before you work with him, I don't like to set up expectations if they can't even get approved to live there.
3. If you end up buying the property, try to negotiate at least 2 months of free lot rent, they do it all the time.

Hopefully that helps, thank you for your responses, i'm glad to help

Mike

I have been providing materials for my worker and he is making progress on this new home. he almost has it painted. He will be putting in the shower surround shortly.

Here is a tip: I found that the best price and best product for a shower surround is at home depot. The stuff is called FRP. you will see them in bathrooms and kitchens in commercial properties. It costs about $110 per surround, but you get floor to ceiling protection, not just 5' above the tub. then you don't have to paint above the surround. It is clean, and people love it. In a mobile home it is perfect.

Also I have been doing some research on mobile home communities, and have found a single property with a MH on it, but it has .5 acres of land. It may be good to put a small community on that ground. Well we will see, I'll find out what we can do.

I have a friend that wants to partner with me, put money into the deal and then get it running and refi and pull his money back out. I'm in the market, so if anyone knows of a rough or empty community I would love the lead.

Thank you

Mike

I forgot, Buyers. I have been placing classified ads on this home, I always sell the payment for the home and not the purchase price.

But I wanted to let everyone out there to know, classified ads work, I have been gettnig a ton of calls on them. I have new buyers for all the properties I finish. I got a buyer just yesterday that is intereted in one of my current properties that we just finished. They are ok with the price, but everyone loves to know what their payment is going to be. Sell the payment!!!

Another tip

Mike

I have been searching the market lately for good deals I can wholesale. I just came across a home that the sellers want to sell for what they owe. I have been learning from another DGer Rando1 about Lease options on properties that are upside down.

I will be making an offer and trying to implement this crazy strategy to lease option the property to a buyer, collect a finders fee and move on. Any time I can learn a new strategy I love it.

Also i just came across a bank that has a mobile home community they are foreclosing on. They really don't want it and want me to take it. A friend of mine works there and tipped me off about it. I have a meeting with the bank early next week. I'm excited for these new potentials.

Mikessler

I have been looking into the Michigan area for investing. to set up my exit strategy I have been calling for banks there that will do cash out refi's using my company as the borrower and not me personally. I found one, Chemical bank in bay city that will do it. I'm in the process of getting pre-approved with them. I plan to purchase these properties with cash, put a little in rehabbing them. I will then rent or sell the properties. I will use the bank to cash out refi them so I can pull all my money out I have into the deal, I will then go to the next.

Update on my Mobile Homes. I keep getting new prospective buyers for my current home. I'm training my assistant to help me sell these homes. She is doing a good job. We met last night and talked about following with all the buyers. Keeping contact with them and getting them committed to the home. She has another appointment tonight to show it.

Keep Moving Forward!!!
Mikessler

Mike,

Good luck in your efforts. You might want to look at tax sales in Michigan. You may be pleasantly surprised about the houses you may be able to pick up.

Best of luck.

Thank you for the good advice. I have been looking into it, that is why I have decided to go there. They are having their deed auctions right now. I am interested in some that are happening later in September. I hope to be able to pick up a couple of properties then.

Thanks
Mikessler

I found myself this morning buying materials for one of the Mobile Homes I'm rehabbing. I have trained my helper to do most of the work on the homes I do, but I still find myself doing some of the more technical items. I have found the easiest way to put a roof on an old mobile home is to use a product called EPDM. it is easy to install and anyone can do it. They last 20 years, and it is worth doing the job right.

I will also do the granite countertops in the home. I learned how to install them, and where to buy the material. I can put in granite for less than Formica. The homes sell quickly with granite. People just love it.

Keep moving forward

mikessler

You are smart to go with the granite. Another investor told me about a trick that he has done to get a property sold quickly. He spent $350 on a flat screen tv and mounted it over the fireplace in the family room. Guess who walked in, saw the TV and quickly made the decision to buy? Yes, the husband! haha. Retail Buyers love the little extras. Those things usually don't cost you as the Seller too much money yet can be a decision maker for the buyer.

I'm closing another one. I just found a decent buyer, she doesn't have a ton of income to qualfy an purhcase my home, but she was right on the boarderline. She is a great lady, and I got great references from her employer and rent history I went ahead with it.

Here is how the deal went down. I have a community owner that gives me these properties, I have 3 others in his community I am working on. I got the home for free, I put about $3500 in rehab into It. I have 1 guy that does my rehab, I a few other guys that do other special work I need on these home my regular guy doesn't do. All in all I try not to have to much into these homes. I want to have all of my investment cash out of them within 2 years.

Here is the investment deal, I just sold the home for $13,500 on a contract for 7 years. I am charging 12% interest.

I make the 10K on the sale of the home and I will make about $7300 in interest over the next 7 years. In total I will make about 17K on the investment and I helped a great lady buy a really nice home which is very fulfilling to me. My Cash on Cash return is over 500% for the investment, and I can do it again and again. I love em.

I have another home we are qualifying a new buyer for already. We should have it finished by the end of the month they are planning on moving in at that time. It is the same story again on this one as well. So this month I will bring in over 30K in Notes that will bring in over $500 per month.

Also I wanted to put in a journal entry with my management. I'm still learning how to manage hands off on with my investments. I'm training an assistant on how to field calls and take care of my buyers. I'm paying her per deal which is great. She is working part time with me to bring in these buyers. Tomorrow morning We are meeting with this new buyer for the Heritage Ave. home to show her how to do the contracts for the purchase. I'm excited to just do the finding of the deals, working with the sellers mostly and they can do the day to day stuff.

I love growing and learning.

I just met with the buyer this morning. All the papers are signed. She is putting $1000 down and she will be paying me $229 for the next 7 years.

I'm excited to continue moving forward. My goal is to have $10,000 in cash flow coming in every month. I'm a quarter of the way there right now, but by the end of the year I should be a little over a third of the way there.

I will get there,

I have a chance to do my first deal ever but it's a manufactured home and not sure how difficult these are to do. The owner wants $40,000. He owes $19,000. He wants $15,000 cash which won't leave a whole lot in it for me to assign over. Any thoughts on how I can make this work?

Not sure what to do. I have a chance to do my first deal but it's a manufactured home and I'm not sure how difficult these are to do. The owner is asking $40,000. He owes $19,000 and wants $15.000 cash. That would leave very little to make it attractive to others as an assignment. Any thoughts?

How much is the property worth is the biggest question. When they are asking for a retail price and wont budge on it. I will just pass it up. When there isn't very much room in the deal generally they aren't motivated.

Most of the homes you can get for a good deal are definitely from motivated sellers. The newest Mobile home I have purchased was a 1995, I just sold it a couple months ago and was my best deal. But I bought it for $1500.00. The seller was moving in to a care center, and the home was trashed. It took me about $3500 to fix up. I ended selling the home for $26,000, the seller gave me 5K down and now has a payment with me for the next 8 years. I should make about 32K on this deal.

The most I have paid for a home is $7500. One of the keys to success with MH's is to not have very much invested in them. they are a depreciating assets so you don't want to have your money in them for very long.

If the seller is motivated you should be able to get a discounted price.

Hopefully this helps. Let me know if you have any other questions

Thanks

Well I finished up the last few things for the home I just sold to my buyer. She is moving in today. I'm a pretty nice guy and she is a single lady older and cant move her larger items. I'm going to pay my helper to go and help her with her large items in the morning.

I just found out my next home our buyer is very interested, he is saving his money to put the $1000 down for next month. he will be moving in on the 5th of October.

I'm excited also I just found a buyer and seller in one. They want to buy one of my mobile homes and downsize and I have the opportunity to buyer their split entry home. I'm going to see if we can do a trade on it. I understand they are in foreclosure so there are going to be some payments to catch up on.

Hopefully we can make it work.

Work smarter not harder, It is working so far

We are saving up to buy a minivan right now. My wife is expecting next year and it will be our 3rd kid. They wont fit in our sedan we have right now. So my truck is going to have to hold on for a few more years.

I have an older truck that I have had for years, it has turned into my damaged service truck to handle materials and construction stuff for my rehab deals. Well it has some problems. 2 nights ago I got stuck on the freeway with my water pump losing all the coolant in the engine. It got hot. Luckily it is ok still. I had my brother tow me home. So now I have a small project for tonight. i need to fix it so we can have 2 cars again in our household.

My wife hasn't been able to help me with my other businesses we have. She does all of my running around for our printing business. I read a book a number of years ago about multiple streams of income. A friend of mine introduced me to the business and it is amazing. I have a few large accounts that keep us really busy. This year we have done very well with it. I handle the orders, and my wife makes sure they get done. It doesn't take very much time each day to maintain, but keeping customer satisfaction is very important. I just delivered with some products Milk shakes to keep my customers happy. They love them. I appreciate their business. We have done very well this year so far. About double what we did last year already.

this business is the exact same as doing wholesale deals. I find a product my client needs, I have someone else make it then I deliver it to them. They pay me in the middle to put the products together. Exact same as wholesaling deals.

In this way I feel I am working smarter and not harder

What is a good website to look up tax sales for your state?

I have found a couple of websites that counties in michigan use to sell their tax deeds.

You can go to www.Bid4Assets.com
Also www.tax-sale.info

Hopefully that helps

A fellow investor asked me a great question, i felt I should let everyone else know about. It is a good lead source for finding properties.

Real Work wrote:
Mike,

Thank you for your idea. I like it! “If you're interested in selling your house please call me XXX phone number.” You posted it 8-1-12 on Letters to Sellers. Is that all you say? Where do you find the addresses of 100 different people every month? Where do you generate these leads?

Thanks,

Greg

Great question.

Would you mind if I posted this response in my journal area so others can read and learn as well?

I get pre-foreclosure lists from title companies. They send me all Notice of Default for the entire county. There are easily over 100 per month.

Also I have found the main attorney's that handle most of the trustee sales in the counties I work in. On their websites they post upcoming foreclosure auction sales. I use that info to create a spreadsheet and sent out mailers that way. With those two sources I easily have over a few hundred a month.

Hopefully that helps

Mikessler

I have an opportunity to buy a 2/1 MH in a community for $1200. Lot rent is $280 and rent for similar homes in the park go for 525-550. My question is how long do these homes last and where can I find comps other than the NADA blue book?
Fish[/quote]

Fish
Good find. That is the price range I find a lot of my homes in. How much fix up does it need?

I hope you don't mind, I'm going to put this in my journal so others can learn from your question as well.

The best way I find comparables for mobile homes is from community owners or managers. They see people sell and buy homes all the time in their community. So I then use their information to base my decisions on what I can resell that property for. I've actually never used the NADA blue book for comps.

After selling a few homes I got an idea of what people are willing to pay for a home in some of the communities I have worked in. So that has helped me with my future sales.

Also a big concept that a lot of sellers don't use, I sell all my homes either for cash or seller financing. I sell the monthly payment to people. The overall price they aren't concerned with as much as the monthly payment.

I just sold a house last week to an older lady. She is very nice, but doesn't have a ton of money. She didn't care what the overall price was, but how much she would be obligated to pay each month. I'm always a fair guy, I charged a retail price for the home, but made the payments work for her and her situation. She just moved in and yesterday she emailed me and said she just loves the home. That is success to me. On that deal overall i should make about $17,000 on it over the next few years.

Hopefully that helps.

We have had just amazing weather the last week or so here. But what is just awesome I sold that home a week and a half ago, she is sending me my first payment already. I love receiving those checks every month. Individually they aren't a huge amount, but when I multiply it with all the properties I own, wow, it is just amazing. Then I think about the work and money it took to get those investments set up and now I don't have to do very much to just keep that money coming in every month. I just love it.

September was a great month. I also run a printing business as well. one of our biggest clients just changed their company name and logo, which means they need to re-print everything. even though it has been busy, but that means more money coming in.

Things are really good and I can only see them going up and up.

That's fine, no problem posting my question in your journal. I will be reading about your success! Thanks. How much does it cost to get the Notice of Defaults lists from the title companies? Could you explain a little more how you find the main attorneys who handle trustee sales and how you use their websites to create a monthly mailing list. Initially, I'll be working in California. Do you think if I limit my search to Los Angeles County it will yield 100 per month? Any suggestions on how to create reliable monthly lists for: Divorce, Probate, Expired Listings, Estate Sales etc.?

Thanks,

Greg

Response:

For the NOD's, I don't pay anything. I'm not sure where they get those lists. I have closed some deals with them so they offered the service for me for free. I would call around to title companies where you are and see if they offer this service.

The other option is to find the major Attorney's in your area that handle the foreclosures. They should have a list you can work with. In my area they update them weekly with new files. So I would think it would be similar.

Hopefully that helps

Let me know