There’s a 5 step process that we go through when we’re repossessing a reselling home from a buyer that stops making payments.
The 5 steps to it are repossessing the home, reinspecting the home, repairing it, reintroducing ourselves to the park management, and then reselling the home.
In this blog we’re going to briefly describe this process to you by using the case study of one of our tenants from back in June 2020.
Repossessing the home from our vetted tenants
We put a lot of time into vetting this couple that purchased this home.
The stigma with mobile homes is that the buyers are problematic. We assume that they’re the type to not make their payments on time, they’re going to miss paying their Lot Rent, and by the time they finally get kicked out of the park the home is completely trashed.
But it’s not true. Or it’s not necessarily true if you vet your buyers properly.
One of the things we’ve done that’s gives us a lot of peace of mind is vetting our buyers so that we’re getting qualified people in there.
People who have pride of ownership. They’re excited about the property. They’re not trying to trash it and they actually upgrade the property. Many times we’ve gotten back a property and it’s been upgraded.
There’s a lot of people out there that want these homes, they see it as an opportunity, and they will have a lot of pride of ownership with the home. Those are who you want to vet for.
By talking to our clients, and picking the right kind of people to sell the homes to we’ve actually ended up having some amazing tenants.
The couple whose home we’re repossessing right now have made their payments early every single month and were very diligent about keeping us updated with anything going on with the property.
The only reason they’re even looking at getting out of the contract right now is because they inherited another property from another family member that passed away.
Reinspecting the home and making any repairs
One of the first things we’re looking at is the exterior of the property. We just want to make sure we’re not seeing any type of damage on the siding. We try to do as much of a roof inspection as we can. We’re really just checking of there’s any type of water damage or signs of rust.
The next thing we look at is the landscaping as well, because when you go and re-introduce yourself to the park manager and let them know you’re repossessing the home, they’re going to tell you, ‘Hey, I’m going to need you to bring the landscaping up to park standards.’
We’re making sure that there’s no weeds or rocks out of place, or any type of trash or debris, things like that.
We’re also checking out the skirting. That’s one of the things your park manager is going to request for you to fix.
We try to check as much as we can along the roof and even the car port. A lot of the time when we get these homes back the car port is usually damaged.
On the inside of the home the first thing we’re looking at is the flooring within the home. We’re looking for any soft spots, any type of apparent damage to the flooring, or any discoloration. Especially in the corners because that’s where a lot of people put their furniture, like tv stands and bookshelves.
The next thing that we want to do is check the plumbing. So we’re simply going to do a test to make sure the toilet flushes and the hot/cold water turns on in all the bathroom vessels.
Whenever you’re flushing the toilet, you want to make sure that there’s no leaks, and that the toilet completely flushes. You want to also check if the water pressure in the toilet and the shower head is correct.
When you’re checking any sinks switch the hot/cold water on and look underneath the sink just to make sure you don’t see any type of leaks.
The next thing we inspect is the air conditioning. So what we do is just turn it on to make sure that the fans work, that we feel warm/cool air coming out of the vents. We like to leave it on for a few just in case anything’s out of the ordinary.
After that we move on to the ceiling inspection. We’re looking for any water damage, looking for any type of discoloration, any light brown, dark brown, or rusty spots. While we’re scanning the ceiling we also try to notice if it is sagging in any places. A bend in the ceiling is an indication of some type of damage.
Later on what we do is get a handyman to just walk the roof just to make sure it matches what we’re seeing with the ceiling.
The last thing we’re going to do is check the electrical system and the appliances. It’s very important to check the outlets. You can literally bring in you charger and make sure the outlets work in the home. If they don’t, it’s not a big deal. We can always get that fixed by the professional handyman.
Reintroducing ourselves to the park management
and reselling the home
After inspecting the home we want to re-introduce ourselves to the park managers so that we can let them know this tenant is moving out and we’re going to be taking over the Lot Rent payments.
And we want to make sure they understand that we’re going to be sending new buyers through, to get qualified. So we need help to understand what the application process looks like, or if anything has changed since the last time.
We just want to get really familiar with the park manage and let them know what stage of the process we are at. This is super important, guys. You don’t want to do this behind the park managers back. You want to make sure that they’re in the loop and they’re helping you to get the home re-sold.
Then the final step is to re-sell the home. We can either list the home, sell it for cash, or ask for a higher down payment and sell it on payments to collect cash flow.
Based on the condition of this property, we think we could probably sell that for somewhere around $18,000. Or we can list it for somewhere around $25,000 to $27,000 on payments and possibly even have our buyer bring in a higher down payment.
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