How to Complete a Land Acquisition with a Mobile Home on it (LA 1540)
How to Complete a Land Acquisition with a Mobile Home on it (LA 1540)
Transcript:
Steven Butala:
Steve and Jill here.
Jill DeWit:
Hi.
Steven Butala:
Welcome to the Land Academy Show, entertaining land investment talk. I’m Steven Jack Butala.
Jill DeWit:
And I am Jill DeWit, broadcasting from sunny Scottsdale, Arizona.
Steven Butala:
Hot.
Jill DeWit:
Yeah.
Steven Butala:
100 degrees, Scottsdale, Arizona.
Jill DeWit:
I’m sorry, I meant to say scorching Scottsdale.
Steven Butala:
Today Jill and I talk about how to complete a land acquisition with a mobile home on it. Or do you even want to do that?
Jill DeWit:
That’s a bad thing. Uh-oh, I only wanted land. Shoot. I almost said a bad word. Shoot. There’s something on it. Is that bad? Hold on, everyone. This is good. This is great. It’s great.
Steven Butala:
Here’s a spoiler. Mobile homes rock.
Jill DeWit:
Yep.
Steven Butala:
And they’re easy deals to do. We’ll talk all about it. Before we get into it, let’s take a question posted by one of our members on the landinvestors.com online community. It’s free and if you’re already a Land Academy member, join us on Discord. Mean it.
Jill DeWit:
And Clubhouse. Okay.
Steven Butala:
Well, you might as well. You brought it up. When’s your Clubhouse show?
Jill DeWit:
Every Thursday. Well, you’re joining me now.
Steven Butala:
I know.
Jill DeWit:
You’re a guest.
Steven Butala:
I got drug into this.
Jill DeWit:
He did, but you like it.
Steven Butala:
It’s another thing on my calendar now, permanently.
Jill DeWit:
He likes it. Hey Mikey, he likes it. So, yes-
Steven Butala:
Every Thursday when?
Jill DeWit:
Every Thursday at one o’clock Pacific time. Come find me. Search me, find me, follow me on Clubhouse. In addition to that, join the land investing group and you will get notified whenever I schedule something and whenever we go live.
Steven Butala:
So there’s a land investing-
Jill DeWit:
Club.
Steven Butala:
Clubhouse thing?
Jill DeWit:
There’s a Clubhouse, like a separate group.
Steven Butala:
Do we run that?
Jill DeWit:
It’s mine.
Steven Butala:
Oh, outstanding, Jill.
Jill DeWit:
It’s all mine, man. Mm-hmm (affirmative).
Steven Butala:
Excellent.
Jill DeWit:
Exactly.
Steven Butala:
I love to not know what’s happening in my own company.
Jill DeWit:
That great? You’re welcome. And that’s the truth. That’s what’s so funny. So, he’s being sarcastic? Nope. Likes it this way. Every time we do a live event and he’s like, “Just tell me where to stand.”
Steven Butala:
I’ll write it and show up.
Jill DeWit:
Sure, just like, “I don’t want to do anything else.”
Steven Butala:
That’s basically my whole responsibility now.
Jill DeWit:
Exactly. Okay. Evan wrote, “I’m looking to purchase a parcel with a mobile home on it. The mobile’s considered personal property with its own title. The owner wants to sell me the land and the mobile. How should I specify that the offer is for both the land and the mobile? Should I just add a line item to my purchase agreement?” That works.
Steven Butala:
Evan, we’re going to answer this during the show here. Today’s topic, how to complete a land acquisition with a mobile home on it. This is the meat of the show. There’s a deed for the property and a title at the DMV. There’s two separate components to this thing. The short answer is, and everybody loves this answer, me included, title company will work it out for you. If they don’t know how to do it, find another title company or another title agent in that company. These are real simple transactions. You never want to buy a mobile home property with a mobile on it and then not buy the mobile home.
Jill DeWit:
Correct.
Steven Butala:
It’s almost always more… Not almost always. It’s frequently more expensive to move the damn thing than it is to just leave it there and sell it with it. Here’s why. Somebody put probably a septic tank in or septic field-
Jill DeWit:
Maybe a pad.
Steven Butala:
Septic systems.
Jill DeWit:
Maybe some foundation.
Steven Butala:
And whatever foundation they choose, whether it’s jacks or concrete blocker or concretes, it’s there.
Jill DeWit:
They’ve got power.
Steven Butala:
They got power somehow there, whether it’s off the grid or on the grid.
Jill DeWit:
Right.
Steven Butala:
And water. There’s probably a well, whether it’s shared or there. Those are all very attractive components over just a vacant piece of property.
Jill DeWit:
Valuable. Yeah.
Steven Butala:
So, Jill and I will frequently just buy bombed out holes.
Jill DeWit:
You could have missing a wall. I don’t care. Just buy it.
Steven Butala:
Holes in the wall. And so what we do, though, I’ll tell you. We value it as if it was just piece of land.
Jill DeWit:
Right.
Steven Butala:
And so as far as changing the purchase agreement that Evan says, I wouldn’t change anything. I would just send the purchase. We just bought one for five grand and sold it for 45, I think. The purchase agreement went to title.
Jill DeWit:
They took care of everything.
Steven Butala:
And the seller said, “Hey, can you just draw up…” Either seller or our transaction coordinator did a bill of sale, damn it, and the title company will do all that for you.
Jill DeWit:
Yeah, it’s not a big deal. It’s easier than you think it is. You don’t have to think through this. Well, what happens on the backend? Everybody just assumes. Just let them know I’m buying it. There’s a mobile on it. This is the whole thing. Okay, great. That’s really the extent of the conversation, and then when they get into it, they’ll pull all their regular paperwork and they’ll do all the normal escrow checks, lien checks and tax checks and everything, and they’ll also pull up the ownership paperwork on the mobile, which is with the motor vehicles, and they’ll facilitate the transfer, too. Traditionally what will happen is, because you’re not in the same state and they’re doing the whole thing for you, they will send you an affidavit, giving them a release so they can work on your behalf with the motor vehicles. You’ll sign that and have that notarized, that extra document, so they can take care of motor vehicles getting it transferred from the seller to your name.
Steven Butala:
Yeah, into your name.
Jill DeWit:
Just the same as with the county, getting the land out of their name and into your name. Same thing. So, and then once you own it, I mean, and it’s worth more. That’s the whole thing. What was Steven was just describing, because we have one right now where we have an agent involved and the agent was talking about dropping the price, and actually, I didn’t tell you this one, my transaction coordinator properly said, “Hold on a moment, lady,” as she should, said, “You need to remember that all the utilities that are coming with this bombed out whatever you want to call it, this borderline, we’re not sure who can live in it, mobile, that’s worth 10 to 15 grand on its own.”
Steven Butala:
At least.
Jill DeWit:
All the utilities and the driveway and the stuff that’s there.
Steven Butala:
The property’s fenced.
Jill DeWit:
So she had to remind them, this is not just a piece of land.
Steven Butala:
It’s flat.
Jill DeWit:
It’s got services and things there, ready to go. So someone can pick it up, move it and put something pretty on there, whatever they want. It’s worth a lot. So, and like I said, they’ll take care of the whole thing for you and it’s not a big deal. It’s just you need to mark it up accordingly, by the way. Now your property’s worth double what you thought it was, at least.
Steven Butala:
Mobile homes are the answer to affordable housing.
Jill DeWit:
Yeah. Yep.
Steven Butala:
Every article I read right now is real estate’s over for people. They can’t afford it anymore. Prices are out of control. Everybody from moving out of California and bringing their prices with them. That’s all true, except for mobile homes. A brand new double-wide mobile home that anyone would be proud to call home is about a $100,000.
Jill DeWit:
On your own acre and a half or whatever it is.
Steven Butala:
We’re experts here, all of us, in buying inexpensive land. So, if you do some research and figure out where and what size it needs to be and what zoning and then you send a mailer out based on all that and drop a mobile home on there, let’s say you spend $20, $30,000 on a great piece of dirt and drop a mobile home on there. It’s going to take a year to do this, by the way. Now you’re into it for, let’s say $115,000. I can almost tell you that you could sell it for 200 and there are people that this is all they do.
Jill DeWit:
It’s true.
Steven Butala:
It’s an entire career. We do a lot of deals like this.
Jill DeWit:
It’s true.
Steven Butala:
So, buying a piece of property, Evan, with a mobile home on it, regardless of the condition, is an amazing opportunity.
Jill DeWit:
Right. And if you have one that is… Grandma just moved out, Grandma just passed on, whatever it is, don’t pooh-pooh it. There are so many great people that would love to come in there and redo the floors and redo the inside and paint it and do a new siding, whatever it is. They’re happy to do that. Sometimes it’s easy to say, “Oh, who would want that?” Because that’s not your cup of tea. You’d be surprised.
Steven Butala:
We have nine or ten of these going on right now in some stage of the acquisition or sale, and if we put them on the MLS right now, before they’re done, they would all sell in the first week.
Jill DeWit:
I personally love them. I think it’s great, and I know there’s people that rent them out, too. That’s a whole nother business model, but I’m a fan of just selling it and making a good profit and moving on. It’s endless what you can do with this mobile property. I learned that a long time ago. I’ll tell you, when we first got started and I was working with you and something came in and I didn’t even know it. I’m like, “Hey, by the way, I found out from the county, this is zoned okay for mobiles.” And you’re like, “What?” And I saw you get so excited. I’m like, “Is that a good thing? I didn’t even know.” He’s like, “Yeah.” That’s a good point, too, that not every piece of land is zoned mobiles.
Jill DeWit:
So, like you said, you’ve got to check that out and make sure. There might be size requirement, might be within a certain area of the city. There might be restrictions on it has to be on a pad or it has to be… It can be on the jacks or whatever it is. There’s certain things you’ve got to get into, but that’s okay. That’s one phone call to the county, talking to the right person-
Steven Butala:
That’s right.
Jill DeWit:
And you can get all that information.
Steven Butala:
Many counties have designated areas for mobile homes, also.
Jill DeWit:
Yes.
Steven Butala:
With a lot of vacant properties. So you could do a target-specific mailer.
Jill DeWit:
Yep.
Steven Butala:
Where the utilities are all in, right at the lot line. They’re usually pretty small lots and they’re usually kind of expensive, but you still can, either for personal use or for flipping, it’s real easy to go in there and just clean the lot up, make sure that the utility… You don’t have to do water. Water, sewer’s usually at the street and electric’s right there. So, you could package that all up and say, “This is ready for a mobile home. Here’s the pictures,” with a picture of where the utilities are and pointing into all of it, and just say “This is mobile ready and it’s a smoking deal. Here’s the math.” If a new mobile home costs a hundred grand, I’m selling a lot for $20,000, even though you bought it for five or whatever, the numbers end up being, people are going to… You need to present it is what I’m saying.
Jill DeWit:
That’s exactly right.
Steven Butala:
You can’t just assume that people are going to figure this out.
Jill DeWit:
Correct.
Steven Butala:
Maybe even do a rendering of a mobile home on there.
Jill DeWit:
You know what’s so funny? I had this property the other day that my transaction coordinator said, “Why do people not think this? Shouldn’t they know this?” I’m like, “Yeah, they should.” It’s a deal-funding deal where I saw they said, “Hey…” I got a link to the listing and I pulled up the listing. It had seven photos. It’s a gorgeous property, right? Seven photos, none of them with a blue sky, no outline showing exactly where that property is, and two sentences description, and this was an agent. I’m like, “Are you kidding me?” So, I had to tell the person back, I’m like, “Okay, you know better than this. You need to tell this agent, I need drone shots. I need blue sky. I need an outline. I need 17 photos, not seven. And by the way, we need a great description. I want a picture of the area. I want all the stuff.”
Steven Butala:
Tell the story.
Jill DeWit:
Yeah. I’m like, “Come on.” Just because they’re an agent and they say what they’re going to do, you still have to manage them.
Steven Butala:
Now more than ever, there’s free software applications out there where you can take a horrific picture and make it look gorgeous.
Jill DeWit:
Even for five bucks, some of the paid stuff I saw, it looks great. I can’t think of it right now, but I told somebody, “Go look this up.” It’s really easy to find. Happy you could join us today. Five days a week, you can find us right here on the Land Academy Show.
Steven Butala:
Tomorrow the episode on the Land Academy Show is called Our Biggest Land Flipping Bottlenecks in 2021. Jill and I are going to bare all.
Jill DeWit:
Yikes.
Steven Butala:
You are not alone in your real estate ambition.
Jill DeWit:
That sounds scary.
Steven Butala:
We throw each other under the bus.
Jill DeWit:
Oh no, here we go.
Steven Butala:
If you would just send out the mail correctly, Jack, and price it correctly, we could buy some real estate. If you would just answer the phone correctly, Jill, maybe we could buy some real estate.
Jill DeWit:
That’s actually not what’s going on, but it’s going to be funny. That’s good. Hey, if you’re interested in learning more about us or what we do, check out landacademy.com or houseacademy.com. We provide the education tools and support you need to be flipping property like the pros.
Jill DeWit:
We’re Steve and Jill.
Steven Butala:
We’re Steve and Jill. Information…
Jill DeWit:
And inflammation.
Steven Butala:
To buy undervalued property.
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