Wow! Seattle Eric alerted me to this new site called Zillow.com that was created by the founder of Expedia. Basically, it's another real estate comp site - but this is much, much better than anything I've seen before! It looks like they've combined comps with Google maps to give you a satellite view of the neighborhood with home values superimposed. Click a house to get details about it. This gets my vote for best use of the Google Maps.
This is still in beta, so there are some bugs. I've noticed that when you zoom in to the highest magnification, you tend to end up somewhere other than where you were looking - I ended up about 5 miles east when I tried it. Also, at higher magnifications, the hybrid view, which superimposes street names onto the satelite view, gets confused and puts streets where they aren't.
Passed On Mobile Home
Saturday afternoon, I went out to check the mobile home. It was quite a strange place. The unit was a singlewide and they took off one side and built on to basically make it the same width as a doublewide. The wood on the outside looked old and could have possibly had dry rot. A couple windows were broken and some of the light fixtures had broken inserts. The place was filled with boxes and the owner told me she had been packed since September. There was a storage shed outside and the backyard had two small trees - an orange tree and a lemon tree. The lemon tree was struck by lightning last year. The view from the backyard wasn't great - you got a nice view of the backyard of the adjacent property, which was filled with old toys, tires, and weeds. The front of the house looked nice, and there was a For Sale By Owner sign. The owner had both a cat and a dog.
In my conversations with the owner and based on what was written in the appraisal, I discovered she had been trying to sell the place since September. She originally tried to sell it for $126,000 and in December, she sold it for $100,000. That sale fell however, because the bank required the seller to have 30% down. That could mean either the buyer had bad credit or, more likely, the bank didn't like the property. I tend to think it was the latter.
The property was in a large mobile home area. It's not really a mobile home park, but more of a part of town where people with mobile homes ended up. There is no monthly fee or any kind of neighborhood association. There were several other places for sale and I drove around checking comps. Doublewides were going from $95,000 to $139,000. Singlewides were for around $80,000 and lower. This particular property is strange in that technically it is a singlewide, but it was modified to be a doublewide. I think the appraisal from 2 months ago that came in at $108,000 is somewhat unrealistic. I feel the appraiser could have choosen whatever price he wanted, given the huge range of prices in the area. If you look at the properties selling for $100K and above, they were all much nicer than the property I was looking at.
So I ended up not buying this one. I'm of two minds on this decision. Part of me is worried that I'm rejecting it based on fear. Mobile homes are definitely outside my comfort zone. That's fine and I want to be able to move outside my comfort zone - that's the only way to learn and it's why I decided to look at this property in the first place. But everything else I was seeing just didn't add up. I couldn't see how the $108,000 price was justified. So I passed. I'm 90% sure it was the right move, but there is still that doubt that I chickened out. I keep thinking of that card in the Cashflow game that says "While you think about this property, the player to your right takes the deal." It's too bad this is a FSBO. It'd like to watch its progress on the MLS and see what it eventually sells for.
In my conversations with the owner and based on what was written in the appraisal, I discovered she had been trying to sell the place since September. She originally tried to sell it for $126,000 and in December, she sold it for $100,000. That sale fell however, because the bank required the seller to have 30% down. That could mean either the buyer had bad credit or, more likely, the bank didn't like the property. I tend to think it was the latter.
The property was in a large mobile home area. It's not really a mobile home park, but more of a part of town where people with mobile homes ended up. There is no monthly fee or any kind of neighborhood association. There were several other places for sale and I drove around checking comps. Doublewides were going from $95,000 to $139,000. Singlewides were for around $80,000 and lower. This particular property is strange in that technically it is a singlewide, but it was modified to be a doublewide. I think the appraisal from 2 months ago that came in at $108,000 is somewhat unrealistic. I feel the appraiser could have choosen whatever price he wanted, given the huge range of prices in the area. If you look at the properties selling for $100K and above, they were all much nicer than the property I was looking at.
So I ended up not buying this one. I'm of two minds on this decision. Part of me is worried that I'm rejecting it based on fear. Mobile homes are definitely outside my comfort zone. That's fine and I want to be able to move outside my comfort zone - that's the only way to learn and it's why I decided to look at this property in the first place. But everything else I was seeing just didn't add up. I couldn't see how the $108,000 price was justified. So I passed. I'm 90% sure it was the right move, but there is still that doubt that I chickened out. I keep thinking of that card in the Cashflow game that says "While you think about this property, the player to your right takes the deal." It's too bad this is a FSBO. It'd like to watch its progress on the MLS and see what it eventually sells for.
Mobile Homes? (Updated)
Man, I can't tell you what a great feeling it is to get up in the morning, check your email, and find an offer for a property that will provide you with an instant $30,000 in equity!
That was what I found this morning when I checked my email. The same person who sent me the offer yesterday (which another investor snatched up before me) sent me another one that he was passing on. It looks good to me, but the only issue is that it is a mobile home. I've got no experience with those yet. I've spoken with my Realtor friend and she mentioned that I should find out if the land is included with the sale. She hasn't sold a mobile home in years, so she wasn't sure of any other "gotchas" I should watch out for. Anyone have any experience with mobile homes they'd like to share?
Luckily, the seller had a professional appraisal done in December and I've got a copy of that. I don't see anything out of the ordinary on it except that the unit was a single wide that had an addition built on. The addition apparently covered up the HUD certification plate. (HUD certifies mobiles home are built to certain standards.) My Realtor says this may be an issue if a buyer is getting an FHA loan, as that certification will be wanted by the lender. However, she said with a conventional loan, it probably won't be an issue.
I'm going to call and talk to the seller today. The appraisal for the property valued it at $108,000 and the seller is willing to take $75,000, giving an instant $33,000 in equity to me. Average selling time in the neighborhood is 120 days.
Update: I spoke with the seller a bit ago. She is currently living in the mobile home and wants to sell ASAP. She can be out in 2 weeks. Her son is in the National Guard in Alabama and has been called up, so she's heading out that way. The property is a single wide mobile home that was gutted and had an addition built on to it. She owns the land and there is no HOA or mobile home park fee. She says there is no HUD certification plate - the unit never had one. She does have the VIN number though. There are no age restrictions in the mobile home park. The unit has a real roof and attic, not a mobile home roof. The unit has a septic tank, so in addition to the sales contract, we'll also need to sign a On-Site Wastewater Treatment Facility Addendum. This document basically instructions the seller to get the septic system inspected by a licensed inspector and make any needed repairs or the contract is cancelled. I'm heading out tomorrow afternoon to check the place out and, if all goes well, sign a contract.
That was what I found this morning when I checked my email. The same person who sent me the offer yesterday (which another investor snatched up before me) sent me another one that he was passing on. It looks good to me, but the only issue is that it is a mobile home. I've got no experience with those yet. I've spoken with my Realtor friend and she mentioned that I should find out if the land is included with the sale. She hasn't sold a mobile home in years, so she wasn't sure of any other "gotchas" I should watch out for. Anyone have any experience with mobile homes they'd like to share?
Luckily, the seller had a professional appraisal done in December and I've got a copy of that. I don't see anything out of the ordinary on it except that the unit was a single wide that had an addition built on. The addition apparently covered up the HUD certification plate. (HUD certifies mobiles home are built to certain standards.) My Realtor says this may be an issue if a buyer is getting an FHA loan, as that certification will be wanted by the lender. However, she said with a conventional loan, it probably won't be an issue.
I'm going to call and talk to the seller today. The appraisal for the property valued it at $108,000 and the seller is willing to take $75,000, giving an instant $33,000 in equity to me. Average selling time in the neighborhood is 120 days.
Update: I spoke with the seller a bit ago. She is currently living in the mobile home and wants to sell ASAP. She can be out in 2 weeks. Her son is in the National Guard in Alabama and has been called up, so she's heading out that way. The property is a single wide mobile home that was gutted and had an addition built on to it. She owns the land and there is no HOA or mobile home park fee. She says there is no HUD certification plate - the unit never had one. She does have the VIN number though. There are no age restrictions in the mobile home park. The unit has a real roof and attic, not a mobile home roof. The unit has a septic tank, so in addition to the sales contract, we'll also need to sign a On-Site Wastewater Treatment Facility Addendum. This document basically instructions the seller to get the septic system inspected by a licensed inspector and make any needed repairs or the contract is cancelled. I'm heading out tomorrow afternoon to check the place out and, if all goes well, sign a contract.
A Deal Via Email
I got home from my day job yesterday and found an interesting email waiting for me. The sender had a house under contract and was looking to assign the contract to an investor. The package I was sent was very well put together - it included color pictures of the property (inside and out), property address, assessor parcel number, building details, comps (both recently closed sales and active listings), a list of repairs / improvements that need to be done to the property, and the selling price. The sale needs to be completed within 9 days - not a problem for me. The numbers looked good, so I called the sender. Unfortunately, I found out there was already someone else interested in the property, so I'll only get this one if the other party decides to pass on it. Bummer.
The email was sent at 11 AM but I didn't pick it up until about 6 PM. I'd hate to miss out on more deals like this, so I've modified my email program to alert me as soon as mail arrives, no matter where I am. But the good news is deals are starting to flow to me!
As a reminder, I am always looking for birddogs in the greater Phoenix area! And if you are birddogging, the info package I received from this sender is exactly the type of information I look for to evaluate a deal. I couldn't have put it together better myself!
The email was sent at 11 AM but I didn't pick it up until about 6 PM. I'd hate to miss out on more deals like this, so I've modified my email program to alert me as soon as mail arrives, no matter where I am. But the good news is deals are starting to flow to me!
As a reminder, I am always looking for birddogs in the greater Phoenix area! And if you are birddogging, the info package I received from this sender is exactly the type of information I look for to evaluate a deal. I couldn't have put it together better myself!
Phoenix Area Rich Dad Forum Members Get Together March 23 - 26
Erin Morgan and Russ Herschelmann, emorgan26 and home_theater_guy on the richdad.com forums, have organized a get together for other Phoenix area investors. The event will feature talks by local investors and opportunities to network. Les Gee will also present his acclaimed REST workshop (additional fee applies).
Registration is limited to 25 people (which is now down to 23 since my wife and I have registered) and the cost is $58 per person. Details can be found at http://rdrt2006.ezsitemaster.com and registration can be done at http://www.webervations.com/magic-scripts/giftshop.asp?memberid=6260 .
Registration is limited to 25 people (which is now down to 23 since my wife and I have registered) and the cost is $58 per person. Details can be found at http://rdrt2006.ezsitemaster.com and registration can be done at http://www.webervations.com/magic-scripts/giftshop.asp?memberid=6260 .
