Table of Contents
Podcast Transcription
Dave Dubeau [00:00:09] Everybody Dave Dubeau with another episode of the property Profits Real Estate podcast today zooming in. Christy Duckett and Christy is a very accomplished real estate entrepreneur. She’s been doing active real estate investing for many years. All kinds of things, you name it. She’s done flips, she’s done wholesale deals, she’s done mobile home. She’s done long term buy and hold, you name it. Chris, she’s done it. And what we’re going to be focusing on here today are mobile homes because I think that’s going to be fun. Chris is also an award winning real estate coach, not just any kind of coach, but multiple awards one. So, Christy, looking forward to our conversation today. Welcome.
Christy Duckett [00:00:51] Thank you, Dave. So excited to be here.
Dave Dubeau [00:00:53] Yeah. Excellent. Excellent. Excellent. So tell us how you got into this whole mobile home investing thing because it it’s not the sexiest sounding thing on planet Earth. I’ve done a number of mobile home deals myself way back in the day when I first got started. So why don’t you tell us a little bit about how you got started with mobile homes?
Christy Duckett [00:01:15] Yeah, it’s kind of interesting. Like everyone, I started just investing in real estate and googling and looking, and this was back in 2007 and just what options there were. And at the time, I lived in Florida and I came across an ad, you know, a seminar about mobile investing. And I thought, there’s got to be something to this. I’ve seen these things since I was a kid and I grew up in Virginia. They’re everywhere. I’ve seen them in Florida retirement. I’ve seen the trailers, the nice, manufactured homes, and I thought before I do anything, I need to learn. So I kind of just got a couple of bucks and started educating myself. So who
Dave Dubeau [00:01:51] who were? I’m wondering if it’s the same book that I read about it back in the day, who was kind of your early influence when it came to mobile?
Christy Duckett [00:01:58] The pioneer, right? Lonnie Scruggs deals on wheels. I think he was like one of the original, and it was a really short. I mean, the book is still around. It’s a very short, quick read, and it gives you the baseline of just buying homes and literally just the concept of owner financing them. So I kind of thought, Well, this is cool. It’s something you can get into for a lot less money. But then also at the same time, it allows you to really create passive income, flip them wholesale. So every strategy I was already doing really applied to mobile homes.
Dave Dubeau [00:02:28] Very, very cool. So what was your if you can remember what was your first mobile home deal in order to work out?
Christy Duckett [00:02:34] Yes. So the first one we bought it was kind of interesting because I had moved to South Carolina, which is, I think, per capita the hub of mobile home. So if you don’t know about them, you have to learn you don’t have a choice. And I actually went to I own a property management company at the time, and I was at Eviction Court of all things, for a house. And as I was listening going, the judge was going down the docket of all the people that had homes and literally there was a gentleman who owned a mobile home park. And I was like, Oh, this is interesting. I was like, OK, he’s evicting someone out of the mobile home. I hadn’t yet done a deal, but had read everything about it and thought, What a great opportunity, let me approach him. And I started working to move homes into his part. So that’s actually the first strategy I did was finding motivated sellers of mobile homes and then moving them into someone else’s part and renting them. So it was a rental, which I still have to this day very well.
Dave Dubeau [00:03:28] OK, so back up for a second there. How does that work? So you’re buying one mobile home in one park and moving it to another one. Is that basically how it works?
Christy Duckett [00:03:39] It can. Or it could just be. We have a lot of freestanding mobile homes on land, so the actual situation where I found my mobile home ended up being a gentleman who was building a brand new single family home. And he and his wife were living in the mobile home where they were building the house and in order to get financing. I didn’t know really know this at the time, but found it out, and it’s true. In order to get financing on their single family home once it was built, the mobile home had to leave the same acre lot as the house financing company went and financed the house. So he basically started out wanting a lot more. I ended up getting, I think, the mobile home for like twenty two hundred bucks and it was a double wide and great condition. And it was like, is did this really just happen like a basically for free?
Dave Dubeau [00:04:26] Yeah. And then a few bucks to get it moved and then you’ve got it in the new place. All right. Well, that’s cool. So what would you say is when it comes to mobile home investing, what is your bread and butter way of doing it? Because I understand you can do things like that. You can do rent zones. You can just buy it, hold it, rent it out long term. What’s your main strategy when it comes to mobiles?
Christy Duckett [00:04:50] So I would say there’s really two and some of I think, as you know, just the push of single family homes moving so quickly it’s opened the opportunity of mobile homes right now, there’s just supply and demand shortage. So I found not only just keeping them as rentals, so I love the concept of finding someone who owns a part that is willing to work with you to allow you to either buy homes in there or move them in and rent them. So then that kind of helps my passive income side. And then on the opposite end, I really target homes and small manufactured home communities that are more like houses on acreage that have been do title. So they’re actually attached to the land and you can flip them so they can get financing. FHA, Fannie Mae and Freddie Mac will finance mobile homes, so we’ve been actually able to buy mobile homes on land and flip them like a single family home. So a lot less competition, a lot less rehabbing, less permitting good profit all the way around.
Dave Dubeau [00:05:49] All right. Very good. So let’s talk a little bit about the mobile homes and mobile home parks that that you’re buying. So typically you’re going in there, you’re talking with the park owner, the park management, you’re making sure they’re comfortable with you, owning homes there and renting them out long term, as well as if there’s space, bring in new homes, kind of walk us through. How might that look? Let’s say just to keep it simple, let’s say you find a property in a mobile home park. More or less, what do the numbers kind of look like?
Christy Duckett [00:06:22] Yeah. So this is what I really love about them, because when you’re thinking on a single family home realm and, you know, of course, depending on the area you’re in, so whether it’s in the states or Canada, you know, I mean, housing is expensive right now. So a lot of people think, number one, I can’t buy a house, how am I going to finance and I definitely can’t buy it all cash. The good news with mobile homes is they’re very negotiable. And if they’re in need of repairs and sitting in that park and they’re just sitting, that owner isn’t collecting any lot run off them, possibly. So there’s an avenue where sometimes the park owns homes themselves and they don’t have the money to fix them up, or there’s people in the park that need to sell their homes. And really, the sweet spot is the people that need to sell their homes. They’re kind of on a time crunch because if you don’t have money to pay the lot rent, you’re going to get to a point where you pretty much have to give away the home. I hate to say it, but you can’t afford to be there. So what ends up happening is it becomes a great negotiation tool to get them for very little. So starting out, it’s just finding out I’ve gotten one literally for free. I’ve bought ones for a thousand bucks that need a repairs. Now, obviously, those need a little more work, so I might come in and put, you know, four thousand dollars in. But again, I’m five thousand dollars in an asset that can rent at market rate values. So I really try to compare my mobile homes to apartments in the area. So really, it’s comparable. It’s not like I’m getting five hundred dollars less for a mobile home. I’m getting average rents for the area.
Dave Dubeau [00:07:51] Yeah, so the equivalent of a two bedroom mobile home, maybe be the equivalent of what a two bedroom apartment would rent out for there.
Christy Duckett [00:07:58] Correct. Exactly. And sometimes I’ll price them as to where it’s like a three bedroom, two bath apartment. I might price my mobile home, right? That is smaller. If it’s a smaller apartment, I might do a larger mobile home for the same price. So if it’s a two apartment, I’ll take my three two mobile home and make it the same price the apartments are. It’s way more appealing.
Dave Dubeau [00:08:18] Yeah, it’s more appealing. Plus, I got a little yard. They got outdoor space.
Christy Duckett [00:08:21] It’s right. You can’t hear your neighbors on top of you and beside you, which is, you know, if you’ve ever lived in an apartment, which I have, I remember those days you can hear everything. So I think that’s why they’re appealing.
Dave Dubeau [00:08:32] Very cool. All right, that’s really, really interesting now. What are some of what would you say are some of the pitfalls to investing in mobile homes?
Christy Duckett [00:08:42] So like everything, there’s pros and cons if you’re buying in a park. I think the biggest con can be the park management in the park owner, and the biggest pro can be the manager and the owner if you play that right. So I think it’s really building rapport and a great relationship with them, really making it a Win-Win and letting them know you’re in it to help them like you’re going to get them guaranteed lot rent. So that being said, the Con is if somebody if you’re renting that unit, you’re technically subletting that to someone else. So you in the end are responsible for the lot rent. So if a tenant stops paying, unfortunately, you’re going to have to pick up the tab for the lot rent and pay the park to keep in good with them. So that would be
Dave Dubeau [00:09:25] much different than if you own a single family home. You got a mortgage with bank
Christy Duckett [00:09:29] led one hundred percent. And then also, I think the other thing is just having a contract in place with a park to know the rules, regulations and what if they decide to sell the park one day? Is your lot rent controlled at that price? Or is somebody going to come in? And that’s happening a lot because people are catching on that these are great investments, so they’re coming in and raising lot rents. One hundred dollars a year, which could kill your cash flow. So I like $100 a month. I’m sorry a month. Yes, right? So what ends up happening is if you had cash flow of four hundred dollars a month and they come in and raise a lot of rent that can slice that down too little to nothing. So I think it’s really important just to have a contract in place to know what are we expecting? What’s the expectation?
Dave Dubeau [00:10:09] Yeah, definitely. Definitely. Now what would be some, some tips that you would have for people that are kind of interested in taking a look at this? What have you found as the best ways to find motivated sellers or find good deals in mobile home parks
Christy Duckett [00:10:24] So what’s really cool? A lot of the marketing that I was using for single family homes, I use a lot for the mobile home, so I found bandit signs like the white corrugated signs you put out. We buy houses, switch the verbiage up till we buy mobile homes. And a lot of times again, if it’s in a park just talking to the owner manager because they can become a huge pipeline lead. Yeah, the truth is, you know, they want to collect a lot of rent. They don’t want lot sitting there without anything on it. So I’ve even been able to go into parks and negotiate lot rent. You know, if I bring eight homes and I know your average lot, rent is 250, but will you do it for me for 175? So and you know, kind of working out well, but I would say marketing or the park managers bandit signs Craigslist, Facebook Marketplace, those are two big ones, too, that I’m coming across that have a lot of mobile homes on them, but just like anything, any marketing work. So I think it’s just a matter of doing it right now.
Dave Dubeau [00:11:18] If you had if you had your preference, I know you do a bunch of different things. Long term buy and hold what’s the pros and cons versus buying the property, then selling it via owner financing.
Christy Duckett [00:11:30] So owner financing is a great strategy, and we’ve done it. I hate to say this, but we have a mobile home that we owner financed twice and gotten back because the people the one person couldn’t perform, they lost their job, which worked out to be OK. They were fine with it. We gave them a little money back to move the cottonwood. That always is. Did they take good care of the property? Do I have to go back in and re put any money in to get it back rentable? Luckily, in that situation, it was really minor things. And again, you can take a deposit up front to have that. If so. I think that would be like the biggest con to me. Also, if you’re working in a park and you have this steady stream of income, if you’re owner financing it and they do perform and pay it off, eventually you’re gonna lose your stream of income. So it’s really just keeping the wheel charming to have other things in the pipeline.
Dave Dubeau [00:12:18] Yeah, definitely. And what’s typically the length of time that you own or finance? What are these kind of properties and what’s usually like the price point on these kind of properties? In your case,
Christy Duckett [00:12:30] right in my area might be a little cheaper. Some people watching this will go, Oh my gosh, you can buy that here. I’m like, Yes, that’s why we live in South Carolina. I typically don’t like to carry the note any more than like five or six years because I feel like at that point that gives them enough time to buy. You don’t want to feel like they’re feel like they’re paying too much and they’re getting a B in in situation. You want to make it a Win-Win. I mean, I want to make it fair that they do because really my goal is to not get the home back. I really don’t want it back. I really just want to make my money and move on. But we’ve sold them anywhere from 12 to fifteen thousand, and some of the parks were working in some of the ones on land that are considered real property more. We can sell those in the upwards of 50 grand up to a hundred and fifty grand. It just kind of depends. And that’s the cool part. Some of the ones we flipped, we really could have kept an owner financed. The money was just so good, flipping them. We kind of went that route. But there’s ones on land I’ve gotten for thirty nine thousand put 20 in it and those things appraised for one hundred and twenty five thousand. So if you wanted to owner finance or do you put on that? I just think what the mobile homes, because generally, if you’re buying in a park, they’re not appreciating like a house, you know, we’re seeing this housing boom right now, which is great. A lot of landlords are just selling their rentals because they’re, you know, on so much on the upside. The mobile homes don’t appreciate like that, typically. So that’s why I like the shorter notes.
Dave Dubeau [00:13:49] Yeah, I know that makes a lot of sense. Well, Kristie, this has been this has been fascinating. It’s been a little bit of a stroll down memory lane for me because it’s been a while since I’ve done mobiles, but it was fun. I did. It’s making me kind of think about, have a little bit of fun with that again. We’re going to be doing a webinar. You’re going to be holding a webinar on December the 9th about this. Why don’t you tell us a little bit? Just give us a 30 second overview of what you’re going to be covering on that presentation.
Christy Duckett [00:14:16] Absolutely. I want to cover just individual buying a unit. I think people see ads. They read books. I need to own a park right now. I’m going to buy a mobile home park and I go, No, just stop for one minute. Let’s start with one and see how that goes and then move on to
Dave Dubeau [00:14:30] actual individual mobile
Christy Duckett [00:14:32] home right where you own everything. Exactly. I’m like, OK. I love that you know you’re on that route, but let’s start little. So I really want to just put it out there that these can be a great avenue of passive income. They can really be your entire business if you really want to make it that way, but they can also be supplemental. I believe in really diversifying your portfolio and mobile homes are a great way to get in an affordable level. So I want to teach kind of how to find them the different strategies you can use on them and then just the financing behind them, how to come up with that and what to do?
Dave Dubeau [00:15:05] Awesome. Sounds good. So we’ll have the link for you to be able to register for that webinar somewhere on the show notes there so you can check that out properly. Profits Podcast Dot Com and Christy. There’s been a lot of fun. Thank you very much.
Christy Duckett [00:15:19] All right. Thanks, Dave. I appreciate it. Look forward to it.
Dave Dubeau [00:15:22] All right. All right. Take care. See you on the next episode. Well, hey there. Thanks for tuning into the property Profits podcast if you like this episode. That’s great. Please go ahead and subscribe on iTunes. Give us a good review. That’d be awesome. I appreciate that. And if you’re looking to attract investors and raise capital for your deals, that may invite you to get a complimentary copy of my newest book Right Back There. There it is the money partner formula. You’ve got a PDF version, an investor attraction book dot com again investor attraction, book dot com. Take care.