Offers Academy for Mobile Homes
Jill DeWit: Jill DeWit with Jack Butala here. Welcome to our show.
Jack Butala: Hi. Hi. We changed our role today.
Jill DeWit: In this episode Jack and I talk about Offers Academy for mobile homes. Who knew this worked for all these property types? Great show today. Happy that it’s Friday. I’m sure you are also, Jack. But first, let’s take a question posted by one of our members on the LandAcademy.com free online community.
Jack Butala: Awesome. Keira … Is that how you pronounce that word?
Jill DeWit: Perfect. You did it.
Jack Butala: Keira asks, “This is our first mailer so we haven’t completed our first deal yet. We are picking an easy one for that first deal, but I have a question about some of the others. Several people in west Texas owe about $450 on a five-acre property for $500 and they replied and they’d be glad to take the $500 if I pay off the fees or the taxes, yes. The property would cost me about $1,000 so that’s a no go. My question is, do I politely tell them, “No deal,” or do I counter with, “$100 and I’ll pay your fees”? Or even, “The best I can do is the pay the fees and take it off your hands.”” You are so qualified to answer this question.
Jill DeWit: I know.
Jack Butala: I’m glad we reversed our roles today.
Jill DeWit: This is fun. You know, I like the latter. I’d do both.
Jack Butala: I’d probably do the last one.
Jill DeWit: I’m a fan of, “Hey, I’ll take it off your hands. I’ll give you 100 bucks. You guys can go have a nice dinner.” I really have had people that said, “You’re right. We’re going to go out and have a nice dinner and just say, “Okay, it’s over with. It’s done. I got something for it.” I think they like that, too. There’s money coming to them when they’re doing the signing. There’s a little something that they’re going to get out of it and it makes them feel good.
Jack Butala: I agree.
Jill DeWit: I’m with you Keira and you’re 100% right. There’s sometimes that when you sit, gosh, and you do the math … This is one of the funny things I love about the people that think that there’s nothing but gold in these back taxes situations, because sometimes the back tax situations negates the deal. There’s more taxes owed than what it’s worth. There’s a reason why they stopped paying and why they’re about to walk away. They really want to get something out of you because they know. You have to do your homework, extra homework, to catch up and figure out, “Oh, it’s not a good deal. Well, that was a waste of my time.” Yeah, it was.
You did the right thing. I’m glad you did your homework and you know where they stand on the taxes. If they’re still good properties and you’re still interested, but don’t negotiate. I’d say, “Look, here’s the best I can do. I mean, it’s a good property. I’ll give you 100 bucks and I’ll take care of everything else. I can have a notary to you on Tuesday.” If they have any hesitation, they’re not into it, whatever, walk away. It’s okay.
Jack Butala: Yeah, I mean, my answer is very close to Jill’s, especially because you’re brand new. If you’d been doing this for five years, really the question you’d be asking is … Or you already will have developed a good system for this, but the least amount of talking is the best. If you have to go negotiate and talk about taxes and now you’re looking up every single property and it’s not going to be $450 per property every single one. It’s going to be $472 and $432 and now you’ve got to contact the county and write a check. See? This is not what this is all about. This is about you making it so easy on yourself that it’s silly. This is a lot of work. When I say, “And you should do the deal,” I think you really should because you’re brand new and you did everything right. At this point, would I do these deals? Probably not.
Jill DeWit: Good point.
Jack Butala: But great work.
Jill DeWit: Yeah, awesome.
Jack Butala: The system’s working for her, you know?
Jill DeWit: It is. You are correct. If you have a question or you want to be on the show, reach out to either of us at LandAcademy.com. Today’s show: Offers Academy for mobile homes. This is the meat of the show.
Jack Butala: Isn’t this great?
Jill DeWit: Jack, take it away.
Jack Butala: Hey listener, if you haven’t heard any other episodes this week they’re all centered around one concept: making offers, writing offers and sticking them in the mail unsolicited based on good data, for people who own assets. It only works, in my opinion, if you have a good database set or a good data set behind you to make it work. Mobile homes, like any other asset types … We’ve covered several asset types this week, commercial real estate, single-family residences, we always talk about land, and we talked about, a little there, how to use the program to get listings if you’re a real estate agent. Mobile homes is no different. It’s a five-step process.
Get access to the data or the tools. In this case, the tools are a two-part scenario. You get access to a database and then secure a mechanism to send out bulk mail very, very efficiently and very economically, inexpensively. There’s that. Number two, qualify a buyer. Do you want to go and send a bunch of offers out to a ton of people who own mobile homes just to see what happens, or do you want to know that you’re going to do a deal and buy mobile homes to people specifically who are in the business of flipping them or in some way they benefit from purchasing mobile homes. If they’re already in that business you’re just providing a good, straight deal flow for them, acquisition flow. Number three, what is number three, Jill?
Jill DeWit: Clarify the asset criteria.
Jack Butala: Yeah. Now you’ve got this buyer, right? He or she says something like this: “I own 13 mobile home parks in Maricopa County, Arizona.” This is actually a real conversation that I had. “I’ve decided that rather than … because I need to fill them up … rather than putting a notice in the paper or advertising in a magazine or putting notices up at the hospital …,” because they’re close to a hospital … “and then having people go through the expense and the time and the effort to move their own mobile home onto our lot and connect it, I would rather that I purchase a ton of mobile homes, regardless of quality, for about $5,000 each and then rent them out as a turnkey situation. I want to kind of create an apartment building deal. Can you please find 350 mobile homes for me?” That’s the kind of conversation you want to have. Now you qualified the asset. The buyer’s qualified and the asset’s qualified. And away you go. You send everybody who owns a mobile home that fits his or her acquisition criteria perfectly, and you send them an offer.
Number four, that is number four. Send offers to the owners. Number five is get the deal done. How does mobile homes differentiate …
Jill DeWit: I was just going to ask you, can you clarify what you mean when you’re discussing which asset. Because there’s a mobile home, the physical asset, the building, the structure that has wheels on it, and there’s also the mobile home parks where they rest and they lease out the space indefinitely. Will you please clarify for us, Jack?
Jack Butala: Yeah, sure. This works for purchasing mobile home parks also. We talked about commercial real estate yesterday. I think it was yesterday or the day before. No, I think it was yesterday.
Jill DeWit: It was yesterday.
Jack Butala: Yeah, so we can our letters out all over the country to people who own mobile home parks and if you have a buyer in your back pocket, if they’re in that business and they’ve identified the area as somewhere they want to buy in mobile home parks, it works. This is actually for mobile homes. I’ve done both and it works for both. It’s a different database. The mobile home parks, that’s real property. You can use the asset set or the tool set that we have now, RealQuest. For mobile homes, you need national access to the DMV, which we are just about done completing. It is not available yet to the public, but we’re close. Does that answer it?
Jill DeWit: Yeah, that’s exactly it. I wanted to clarify which one we’re talking about [inaudible 00:08:31].
Jack Butala: The one with the wheels.
Jill DeWit: The one with the wheels. The one with the avocado green refrigerator and wheels.
Jack Butala: Doesn’t that paint a picture?
Jill DeWit: And linoleum.
Jack Butala: You know what’s funny is that trailers get such a bad rap. I don’t know why. I love trailer parks.
Jill DeWit: Isn’t that funny?
Jack Butala: I think it’s cheap as heck to live there.
Jill DeWit: Call a mobile home a tiny house, everyone.
Jack Butala: Yeah, or an RV.
Jill DeWit: It’s the same thing, by the way, but they have a whole different spin on it. You know what I’m going to say? I’m going to say, “I’m going to visit my grandmother in her tiny house.” Everybody goes, “Oh, that’s cool.”
Jack Butala: Or, “My grandma lives in a mobile home.”
Jill DeWit: Mobile home, they go, “Oh, that’s not cool.”
Jack Butala: Mygrandmalivesinatrailer.com
Jill DeWit: When you really think about it, everyone, it’s not that different. They both have wheels and they hook up to things. Or they’re self-contained and all that.
Jack Butala: Jill and I went and looked at a mobile home park that’s close to where we live in southern California. It’s right on the ocean.
Jill DeWit: It’s gorgeous.
Jack Butala: We got in there and there’s properties for sale with ocean view for less than $200,000 and about the same square footage as a smaller house. If you purchased a house in the same area in the immediate neighborhood it would cost you, what, two or three million bucks right on the water like that? You want to spend $200,000 or two to three million?
Jill DeWit: Right. Exactly.
Jack Butala: If you’re a keeping up with the Jones’s kind of person, go spend your two or three million bucks, but I think Jill and I are going to be …
Jill DeWit: We’re okay.
Jack Butala: If we had to make that decision we would be right in that … I can tell you what our family would do. It wouldn’t be a long discussion.
Jill DeWit: Exactly.
Jack Butala: I don’t have any pride.
Jill DeWit: Jack! What?
Jack Butala: No, I don’t have any useless pride, let’s put it that way.
Jill DeWit: What’s that say about me?
Jack Butala: I’m not trying to impress anybody.
Jill DeWit: All right. I prefer to say you make very sound decisions, financial decisions, how is that?
Jack Butala: I’ll take it.
Jill DeWit: “I have no pride.”
Jack Butala: I’ll take it. I have no useless pride.
Jill DeWit: “I have no pride.” -Jack
Jack Butala: Oh, it’s Friday.
Jill DeWit: I walk around looking like this every day. I have no pride, Jack. What the heck?
Jack Butala: There’s a bunch of derogatory stuff I could say.
Jill DeWit: Well, yeah. It’s so … Wait a minute. All I could think of was, “Well, where do I fit in here then? What does that say about me?” Because I have a lot of pride, thank you very much.
Jack Butala: It’s different for women.
Jill DeWit: Okay.
Jack Butala: Women should have a little bit.
Jill DeWit: A little bit?
Jack Butala: Men should not walk around beating their chest, you know? We’ve all met guys who have a little too much pride.
Jill DeWit: Oh, my goodness.
Jack Butala: That’s really what I mean.
Jill DeWit: Okay, yeah. All right.
Jack Butala: They’ve got to have the bigger sports car, buy a faster sports car than everybody, and the whole thing.
Jill DeWit: Right, even though no one knows that I’ve leased everything and I can’t possibly qualify for another dollar, but I look good. That’s crazy.
Jack Butala: There’s a certain section of Scottsdale, Arizona that is famous for what I call … being famous for housing $30,000 a year millionaires. That’s what I call them. You know? I’ll let you guess which area that is, north, south, or center.
Jill DeWit: It’s true. I almost want to say … Is it going up now? Is it a $50,000 millionaire?
Jack Butala: Yeah. Maybe it’s 60.
Jill DeWit: You’ve got to have a little more now. I don’t think you can do it on 30. I think now you’re a $50,000, $60,000 millionaire.
Jack Butala: Yup. $3,000 suits and a fake Rolex and the whole thing.
Jill DeWit: Or you leased it all. Exactly.
Jack Butala: How would you approach this differently? I talked about how to qualify a buyer differently. Maybe that’s a situation like that. Maybe you put a posting on Craigslist to find a couple of buyers … end user buyers that want a certain type of mobile home that’s a certain age and things like that. Maybe it’s a dealer just like you do with cars. You find a mobile home dealer that says, “I can’t keep this model of mobile home that’s this age … I can’t keep it on my lot. We sell it the first day. If I had 50 of those …” Then you narrow your search down with that. It’s very, very, very … How does it differ? It’s extremely similar. There’s a few caveats when you change asset types like this that you want to pre-think out. It’s very expensive to move them alone, to remove it from its spot and then put it somewhere else. In a lot of cases, in fact I’m thinking of the deals I’ve done, every case the moving expense is more than what I paid for the actual mobile home.
Jill DeWit: Exactly.
Jack Butala: We scraped the bottom on this. We’ll send letters out for $500. It’s the same thing with boats because they’re paying a monthly fee so they’re already real motivated to get the thing … just to get it out of their life. In fact, they’d probably pay you to just have to stop paying the pad rent.
Jill DeWit: All of these assets are things that people, when they’re done with them, they’re done. They just want out. They often don’t know they can’t not pay and just let it go back somewhere.
Jack Butala: That’s right.
Jill DeWit: Someone’s going to step in and just take it over, whether it’s the county, whether it’s your boat slip, all of those things. They’ll take the asset back. Somebody will use it. People keep paying and they’re pretty excited to not have to pay.
Jack Butala: Some are tied to your credit score, too. Mobile home pad rent, if it’s a larger, company-owned park, it’s probably tied to your credit score like renting an apartment would be.
Jill DeWit: That’s good point. How about a foreclosure? That might do something to your credit score.
Jack Butala: Yeah, right.
Jill DeWit: I mean, there’s a lot of things that I think that’s where it comes from, that’s true.
Jack Butala: Yeah. That’s something we haven’t mentioned. We only send out mail to lien-free assets, like cars that are not owned and mobile homes, in this case …
Jill DeWit: They are owned, you mean. They’re not bank-owned.
Jack Butala: Yes. Not bank-owned and there’s no debt on it.
Jill DeWit: Yeah, because that’s an interesting thing that people don’t think about. You’re not negotiating with a bank. Good luck. You want to go against CitiBank on this? No, I’m not going to go up against CitiBank, but I am going to talk to Mr. and Mrs. Smith before it goes to CitiBank or whoever it is, because they can make a decision.
Jack Butala: To finish that thought, you know, each of these assets have different caveats, and one of them is you want to befriend a mobile home mover, a guy that owns a company and has the tools and stuff to do that and pre-negotiate a huge discount rate so that you make that as cheap as possible. That’s going to allow you to find a buyer a lot easier and a seller a lot easier. The more things that you can add on to make that person sign that offer when they get it in the mail, the better. “We’ll move it for free,” let’s say. You would build that into the cost of the deal.
Jill DeWit: Right, “So where you’re leasing the spot’s not going to come after you at some point. We’ll get it out of there for you.”
Jack Butala: Doing these deals … Number five is get the deal done. Buying a mobile home is like maybe buying a car. It may be the easiest thing there ever was.
Jill DeWit: Yeah, cars are sometimes harder than land, which is so funny. It’s not hard.
Jack Butala: In that process you’re going to get to know all of the mobile home park operator or owner or everything else and just deals leads to deals leads to deals.
Jill DeWit: Join us in another episode where Jack and I discuss how to information, that’s Jack …
Jack Butala: … and inspiration, that’s Jill …
Jill DeWit: … to get just about anything you want.
Jack Butala: We use it every day to buy property for half of what it’s worth and sell it immediately.
Jill DeWit: You are not alone in your commercial, mobile, listing, land, real estate, everything ambition.
Jack Butala: I love it. That was kind of fun that way.
Jill DeWit: I do. I think we should do that more often, shake it up a little bit.
Jack Butala: I do, too. We always say that and we don’t, but I love it.
Jill DeWit: It’s good.
Jack Butala: I like when you’re the emcee.
Jill DeWit: Thank you. It’s kind of fun. I realized, you know, sometimes it’s almost even easier having a script. I’m just kind of going along. Not that it’s a real big script, but having an outline like that versus I’m always having to be on my toes. It’s fun asking the questions and setting it up and putting you in the hot seat.
Jack Butala: Have a great weekend, Jill.
Jill DeWit: You, too.
If you have any questions or comments, please feel free to email me directly at jack@LandAcademy.com.
I would like to think it’s entertaining and informative and in the end profitable.
And finally, don’t forget to subscribe to the show on iTunes.