The Science of Flipping - Episode 166: How to Find and Flip Mobile Homes - Mobile Home Investing with Brandon Pfannenstiel

Episode Date: September 3, 2020

In this episode learn about How to Find and Flip Mobile Homes - Mobile Home Investing with Brandon Pfannenstiel.

Welcome to the Science of Flipping Podcast. I'm your host, Justin Colby. Yo, yo, what's up everybody? Welcome back to another incredible training from the Science of Flipping podcast. If you are joining us live right now on Facebook, welcome. If you are actually listening to this on iTunes or any other of the areas where you can, Spotify, iTunes, etc., happy to have you as a loyal listener. And if you happen to be catching this on YouTube or another venue to be watching this, I wanna say welcome. If you are not subscribed to my YouTube channel, you want to because ultimately all these podcasts not only will be on iTunes, but will also be on YouTube.

And you need to make sure you go over there to make sure you can watch those videos as well because I have some really cool guests that I bring on my podcast. Today is another one of those days that I have a really cool guest on the podcast. I actually have a really good friend of mine, Mr. Brandon Fantastil. What's up, dude? What's up, man? How you doing? Dude, it is a lovely day. Today's Friday as we're recording this. It's been a really good week. The last three

weeks have been really good in the real estate market and this is shocking to a lot of people to hear, but it has been good. In fact, we sold a mobile home as a matter of fact, and that is what this training is about. So this couldn't be more apropos. I sell probably for a month, I would say. And you are the mobile home flipping real estate investing king. And that's why I wanted to come on and have you on here because quite literally you've been doing this, man, for the better part of the entire time I've known you, right? So I call it five or six years maybe? Close. Yeah, about four years now. Four years. Okay. And so listen, I mean, this is a hot market. I think, you know,

a lot of people want to know more about it. I wholesale them traditionally. And I know you have an entire, you know, program slash ability to rehab them, remodel them, flip them slash keep them, hold them in a portfolio. I mean, you really have been eyeballs into mobile home investing for quite some time. So I wanted to have you on primarily because the way I look at mobile homes, it's like the last land of financially viable real estate, right? And whether it's in a park or it's on land itself and affixed, but people can't find the returns in residential real estate that they can in mobile home real estate as a moment in time. So it's a really hot topic. It's something a lot of people ask me a lot of questions about.

I tend to send them your way, but dude, I'm excited to have you on the podcast. Cool, man. Thanks a lot. Well, I'm ready to get going here. And you know, this is something I wanted to mention to, you know, those that are connected to you. This is a great arena for those that are, you know, maybe cash strapped or, you know, have little capital. We primarily focus on the mobile homes that are in communities or parks. You typically hear trailer parks, but I think it goes beyond that. These are nice amenity filled communities and they have a very little price tag.

So, you know, what we really wanted to do is, you know, introduce to your connections, your folks, that there are the same similar exit strategies as there is with real estate with mobile homes that are considered personal property. Personal property homes are in communities. We seller finance, we flip, we wholesale. And yeah, you're not going to see the $70,000 wholesale deals everybody loves. But you will see amazing return on your investment. I mean, we're talking getting mobile homes for $0 and in less than 60 days making 12 grand on that. I mean, what the heck? So I mean, this what we're going to get into today, and I'm really excited to discuss is the ability to make a profit on deals that are usually thrown in the trash. Yeah. And so let's kind of start with the baseline information about mobile homes, because I think there is a lot of confusion about when they're on land, which would be a fixed,

right? And what the process is for that, right? Because they actually have to give up their rights as personal property for the actual mobile home and then they got to go affix it to the land and then it becomes a real real estate transaction right because it's a fix to land but then you have what you're talking about worse in a park and it's personal property and not that i've ever owned any mobile homes in a park but my understanding correct me if i'm wrong is you have your, it's almost a license with the DMV, right? Absolutely. So we carry, just to tweak that a little bit, we carry a dealer's license with the Department of Housing. And as far as doing title transfer, as opposed to going to, you know, your third party title company, we're going to the

motor vehicle division. We're going over there, we're easily transferring, you know, your, your third party title company, we're going to the motor vehicle division. We're going over there. We're easily transferring, you know, slips, right. From, you know, one party to the other. Um, yeah. So that's the simplified way of putting it. Yeah. And, and, and again, to continue to simplify it effectively, it's the same thing as if you were exchanging pink slips for a car, right. Absolutely. Registering that pink slip at the DMV to say now that this is my car. Yes. Easy. Exactly the same thing. Yep. Now again, that's when they're in mobile homes because they're considered personal property. It's not considered a real estate transaction. Why I want to make sure there's clarification. When I say I've been wholesaling probably one

a week, they typically are the ones that come with land. I'm not typically in a park when I'm doing this. I think I have done that several times. And I think the one time that most recently this year is I bought it and just resold it for simplicity sake. But when it's on land, it would be considered a fixed. You actually do have to record an affidavit of a fixed, which you basically are giving up the rights of your personal property to the DMV saying, this is no longer a personal property. It's now becoming a real estate transaction. So you have to give those rights up to the DMV, right? And correct me if I'm missing a step anywhere to give those rights up to the DMV, but then you have to record an affidavit of a fixment, if that's the right word, with the county saying that this now is a real estate

transaction. Absolutely. You know, we've actually bought a mobile home from you that was affixed to land. We do, you know, maybe three or four deals a year with the land attached to the property itself, but we primarily focus on the communities. But to kind of go a little bit further from what you just said, if you're an investor out there and you're looking to buy a mobile home and it is affixed to land, one thing that we learned, we really got lucky was to find out that you need to make sure that the home is at the original site location, meaning that it was transported from the manufacturing facility over to the piece of land that is considered a fix now. Why this is important? Well, you have to look at it from the end buyer's perspective. If you're selling it to an end buyer that's looking for FHA lending, it needs to be the original location. It needs to be from the manufacturing facility

to the land. Now you start to see mobile homes that are placed in, let's say a trailer park or mobile home community, and they may sit there for five years and then somebody pulls it out, puts it on a piece of land. That is not the original location. Yes, you can affix it to the piece of property, but getting financing on it is slim. And that's one mistake I see investors make all the time. So if you guys get anything out of this and you're looking to invest in mobile homes on land, that is something you need to make sure you take note of. That is really gold. And I'm glad that you brought that up because literally we just wholesaled one this week that that was actually the case. They could not get financing. And it was because the mobile home came from a different location. It was not built and constructed and

then meant to go to that plot of land. It was built, constructed, went from one plot to another plot to wherever and ended up here. They did the affidavit of a fixment, et cetera, got it recorded. But because of that, you know, rule or guideline or whatever we want to call it, the financing was almost, I mean, you couldn't get it. Right. And so the buyer had to come in literally with all cash and or private money cash, right. Where it's not a bank. So I'm glad you brought that to light because it actually happened to us this week where our buyer, a couple buyers couldn't get it done. And a guy came in with all cash and was able to get that done. So.

Yeah, yeah, yeah. No, we've seen mistakes too where, you know, investors call us and say, hey, what is the way, what's the best way to exit on this? And I'm like, well, you got to find a cash buyer or you carry the loan. And, and yeah, you don't want to minimize your, your exits on these types of properties. So if you guys, like I said, if we take anything out of this call, make sure you guys take note of that. Totally. And what I would say is, I mean, we're going to get into this soon, but God, there's such a great seller financing opportunity to mobile homes. I mean, it's incredible. If you had like an extra 50 grand sitting around 60 and you can buy a mobile home or whatever, and we'll get into some strategies, but like this whole seller finance positioning is remarkable, especially to your point, you can buy these things for $0, right?

And so it's really incredible. So let's get into really your specialty, which would be a lot more, not that you can't do the land type, but you definitely do focus primarily on stuff that is in parks. And so let's talk about that. And I wanted to clear the air because I think people really don't understand the difference fundamentally.

And so hopefully that was a good 10,000 foot view of where the differences are. And primarily it comes from, one is real estate, one is actually personal view of where the differences are. And primarily it comes from one is real estate. One is actually personal property recorded with the DMV, the motor vehicles division. So let's get into what you do and how you've been doing it. And you've been doing it now for the better part of four years, as you just mentioned. So talk to me what you do and how we can help people potentially see what you do and make another avenue for them to get into a space like, listen, real estate investing is very crowded right now. I think

we all get that, especially in the single family, condo, townhome space, multifamily, even more so. And so this is an avenue that you've been perfecting for four years and have perfected in large part. And, you know, I think it's a space that could have a lot of quote unquote real estate, right? There's a lot of these out there that if you do it right and follow the kind of the guidelines, it can be an incredible business model. Obviously you've proven that to be true. So why don't you tell a little bit about what you've been able to do over the last four years and we'll go from there. Yeah, absolutely. So, you know, just for a moment, I want, I want those that are listening to kind of take a stance, uh, take a step back

because this is totally different from real estate. The, the approach, you know, running comps and, you know, ARV, that language is not so much, um, harped on in this space as it is where you guys that might be, you know, flippers themselves for real estate, you know, typically use net. That being said, we started off and I don't think that there's any order to go about this, but we really started off with building up our cashflow portfolio. When I, when I first started this, I said, okay, I need to, and Justin actually was one, you Justin were the one that gave me the advice. He said, Hey, what's the amount of money you need to put to the side? What do you need to have come in so that you can quit your nine to five? And that was really my focus. So that being said, I found out early on, okay, you know, I can get a mobile home for, you know, X amount, sell it for Y amount on payments.

And I should reasonably be able to bring in three to $500 per home. How many of those homes do I need to sell in order to replace my nine to five? So we did the math and then we targeted that. And I mean, gosh, it's amazing how much when you have your eye and your target totally zoned in, you can easily accomplish these things. And my goal at the time was to just completely get away from having to work for somebody. So within one year, we got 30 mobile homes. And do the math, anywhere from $300 to $500 per month on those homes, that adds up. And we had a good amount of cash flow coming in as far as our expenses on these homes. Gosh, I, I wish I had, I wrote down the numbers, but I'll give you guys some simplified numbers. We were buying mobile homes from as little as $0 to $3,000. And we put a couple of thousand bucks in repairs to the property. We're not going in there. We're not, you know, flashing up the home

because these homes don't appreciate like real estate. So there's no point in, you know, doing those necessary or those big, big, big repairs. That being said, we're not selling, you know, because let me take a step back here. The buyers of these properties, they are typically folks that have construction background or perhaps in construction themselves. They want a deal and you don't want to put a bunch of your money into these homes because you want to keep moving your funds. So if you can give the buyer a deal and let them make some of these repairs, you know, they can, you know, move in, make the adjustments themselves.

You don't have to come out of pocket and it's a big win win from there. So yeah, we, we were in within, you know, one year we were making six to $8,000 in cash flow. That's that. I mean, it was amazing. It totally took away from my job. Almost no money out of your own pocket, right? This didn't take a big investment. You didn't spend 60, you know, or specifically like $600,000 in real estate to make six grand a month. I mean, yep. The exactly, you know, we want to get our money back within one year, 15 months at most is typically what we're, what we're, uh, where we're landing. But, um, you know, that was definitely the main focus now kind of fast forward to where we're

at now. Uh, we have a team that's around us. I got, uh, three sales reps in the field. I got my assistant who does all of our, you know, basically customer service. And then we have our marketing guy who's been with us for about two and a half years or so. And, um, we really focus now on flipping these homes either through the simplified way of buying a home at a really low, low price, and then just putting it right back in the market, uh, or buying it with, you know, the intention to fully remodel it because we do know our buyers were confident in that arena. Um, so yeah, wholesaling and flipping is really what we've been focusing on. Now I wanted to touch on this too, and maybe we can get into it. You know,

there are ways to wholesale these mobile homes where there actually is an assignment contract. It's not the typical assignment contract, you know, that you guys may use, but there is a way to do this. And when we implemented this part into our business, you know, I think it brought in another six figures that year because of just making a small tweak. It's amazing how many buyers are looking for affordable homes and especially right now. So that being said, if your inventory is maybe low, but you have a lot of buyers, what our company has been doing is really piecing the puzzle together, connecting our, our buyers with, you know, uh, other sellers contacting them through, you know, the method of for sale by owners or direct mail or, um,

you know, contacting community managers, but there, there are several, you know, exit strategies with mobile homes. And yeah, we have, we've, we've really just sprinkled on, you know, kind of the process, but I want to make it very clear, you know, we, you know, you can sell our finance, you can flip, you can wholesale. And I'm telling you guys, the return on your investment is going to be better than any investment out there. Yeah. You're not going to see $70,000 wholesale fees, but you're going to see $0, you know, investments turn to 12, $15,000. That's a pretty big win. Yeah, there's no doubt. And I mean, even someone like myself, if you come to me and I know Phoenix,

I want to catch up a little bit about what you're doing in Phoenix or Knox. I know for a large part, you did a lot in Texas, but like if you said, Hey, Justin, I have a mobile home for five grand, I'll sign it to you. And it rents for 600 bucks, I'm doing it all day, right? Or if it rents or I do a seller carryback or I create maybe a structure, like that's the type of stuff that I know because you put in the work to go get and buy it for $0 because of the scenario of the seller,

right, those are the type of things. And I don't know how common five grand is, but in general sense, like for someone who's looking to build rental income, passive income, mobile homes is a massive market. I mean, not market, not sense of spread, but like an area where people need to be looking because there are a decent amount of mobile home parks out there. And there are a decent amount of trailers out there. And there's a decent amount of people that are honestly just trying to get rid of them. And you know this better than anyone else, right?

Like they're just like, I'm done with it. I'm going to go buy a home. I'm going to go upgrade, downgrade. I'm going to rent a, I'm going to buy a RV and travel the world. And this thing is not worth more than two grand. So if someone can just take it off my hand, I'm out. Right. And that's, but that's where you, the mobile home guy makes their money the same way in, in traditional real estate. I do. I get in front of the seller and I negotiate and I find the pain point and I figure out what's going on with them and line up A and Z. Absolutely. You know, there, there has to be a start to, to, you know, any business, right? Um, we push anybody that ever wants to get connected with us and work with us and get

their, you know, get their foot in the door. We want them to test their market. We have students, you know, in Florida, California, Georgia. And what I really push for them to do is instead of, you know, going and buying a home and, you know, praying and crossing their fingers that they got a good deal, we want them to find out whether or not they have buyers in their area. So we use a lot of the similar methods that you've introduced me to years ago, and that's like the reverse method of finding buyers. So what we easily do, yeah, and this is a good way to find out whether or not it's worth buying a home in one area over the other. So I'll give you guys like a 30,000 foot view of exactly what I'm talking about. We, we, we will plant a lead magnet, some sort of landing page

or application. We collect some details about, you know, an individual who's looking to buy a mobile home. We may have a, you know, a fake ad that's being ran or a ghost ad, because we want to know whether or not there's buyers in the area and what they can afford. And then also where they're looking to buy properties at, that allows us to target effectively. So that being said, when I got lucky with my first deal, I call it luck because I didn't really implement that approach. I had asked myself the question, okay, how do we, how do we scale this business? And I said, all right, let's, let's go test. Let's go test the market. Let's go see if I, you know, if,

if I got something here, if we're fishing in the right pond, planted the lead magnet, we captured about 130. So leads found out that they're looking primarily in, you know, South Phoenix, I think at the time, and I'm sure the, I'm sure that location has, uh, has adjusted and we knew what their pockets look like. We knew that majority of folks were looking for some, some sort of seller carryback deal, but they could, they could put four to five grand down and afford 400 bucks a month, give or take. Um, you know, so that right there just kind of exposed us to, okay, well, this is a smart way.

This is where we can go find homes. This is what our buyers typically have. And we had a little bit more confidence buying more properties, knowing that there's a possibility to get these sold. And now like kind of fast forward to where we're at now. I mean, it's amazing how many people have cash. Gosh, we started asking questions. This is a big win too. We started asking questions on some of our landing pages, you know, that was geared towards finding folks that are looking to buy a mobile home.

We asked the question, well, hey, you know, where do you currently live? Do you currently own a house? Do you currently own a mobile home? And it was amazing how many people actually owned a house that were downgrading. And we bought those houses, we flip those houses, or we wholesale those houses, we got a few deals. And again, that's not our primary focus. But it's amazing how many people may be upgrading. I'm sorry, downgrading, for that matter. So you know, that is, uh, that is another way to generate more of

those type of leads. And, uh, yeah, it's, it's been pretty exciting. Um, trying not to go too far off topic, but that has been a great way to, um, you know, really, you know, kind of use all tools that we have in our position to, to help the market. Yeah. I mean, effectively again, and I say this all the time when people listen to me is you're in marketing and sales. And if you can figure out the widget that people are desiring and you have an ability to be able to put two and two together, you're going to do very well. Right. And so it doesn't matter if it's a real estate home or a mobile home, you're going to do very well because you are the expert finding the buyer who wants it and finding the seller who needs or wants to get rid of it. And you're just simply

putting two and two together. Now, I know you also flip them. I know you flip them in a, you know, you buy it and you remodel it and make it new or newer and things of that nature. And there is the same model. I mean, again, the fundamentals of the alignment of where we're at, right? You can assign it, you can rehab flip it, you can keep it as a portfolio, you can do seller carryback. Everything fundamentally is the same. Well, I don't want to say that in the paperwork sense, but you're doing the same strategies you would with residential. You're just at smaller price points, right? You're not going to be getting the $70,000 wholesale fee or even $40,000 for that matter. But you're also not investing however much money

in marketing to find that deal either, right? And so everything is a give and a take, right? And percentage basis, the returns on the mobile home world seem to be way better in the real estate world right now, right? And so, I mean, you're looking like a goddamn genius at this point, Brandon. Well, you know, once upon a time, I was thinking I was completely, you know, stupid with what we were doing, but I knew that there was something that could be designed to scale. And that really is it because, you know, as I mentioned, the goal was to get rid of the nine to five, but you know, how long, you know, until I need to go back was, was a question of mine.

So, you know, I'm, I'm proud to say last month we had, um, we beat our record of home sales in one month, uh, in the midst of COVID-19 era, which is amazing. We sold eight properties and brought in $45,000 in revenue. That's not including our cash flows, uh, properties that was strictly wholesales and flips. And these are mobile homes and communities. And that's some big, that's some big boy numbers for, for a lot of people. Uh, big, big boy, big girl numbers. Right. And, um, you know, I want to harp on that, you know, Hey, if you're going for some, some big money goals,

yeah, this is a great way to get started. And you said it too. I mean, gosh, the mechanics are there. The mechanics are similar as flipping real estate as wholesaling, um, as, as seller financing. Yeah. The paperwork is different, but the mechanics are there. If you want to kind of work your way up the stepping, stepping stairs before you start putting in some big money into, you know, you know, these giant rehabs, these big, you know, remodels, residential homes, this is a great way to build a little bit of confidence. And I knew, I know that once I had that confidence boosted from not having to, you know, be completely cash strapped, and, you know, buying a house and using, you know, those funds to flip, you know, be completely cash strapped and, you know, buying a house and using, you know, those funds to flip, you know, a handful of mobile homes versus one. It really gave me,

you know, that trajectory to go and start flipping real estate. And, you know, my wife, love her to death. She's a realtor as well. And she definitely spurs me on to look at, you know, other real estate flips. I can tell you, you know, four years ago, I'd be like, I don't know about this. I'm scared. I'm a little worried. This gave me the confidence, these mechanics, these tools really ignited me to, you know, take on those deals. Yeah, no, I think it's brilliant. And so why don't we, because there's a lot we can talk about. And I know you actually do teach people this. And so where can they best find you? Obviously social media is great. So in, in sending emails, so tell them where to find you and how to get ahold of you. Yeah. Just email me. If you guys email me

info at M H G academy.com. So, uh, M Mary Henry, Georgia academy.com.com and uh reach me out there we'll get in contact with you guys we'll we'll connect you with you know what programs we teach and and how we can get you guys investing in this uh this way maybe the real estate market is taking a dump where you're located and you need a shift uh this is a great alternative and And I really hope that we can be somebody that can spur you on, give you a good accountability and really give you the tools, scripts, resources you need to start your mobile home investing career. Yeah. I mean, you know, even if you are primarily in the real estate business, you are going to come across these, right? And if you don't know how to fund them, I mean, even if they come twice a year, you should understand fundamentally how to work them

and what to do and where the paperwork difference is. And, you know, but in large part, like Phoenix, man, this is a brutal market right now for the real estate side, right? I mean, I'm doing fine, but it's work. It's a grind, right? And so if I find another, if you find another avenue to be able to put forth that can create, what I really love about it is the rental. You talked about your rental income monthly, right? Like there's such a great opportunity there with whether a seller financing or strictly buying it and renting it

is a traditional rental. It's really incredible. Rent to own, you have the same options you would, but the price point to get into one of these is so much lower. Oh yeah. I mean, can you buy it? Like I'll ask you straight up.

Can you buy it for $0? Can you negotiate that with the seller? Are there sellers out there? Like, dude, just take the damn thing. Absolutely. You'd have, you'd be amazed how many people just want out of the situation that they're in because they know that next month they have a $700 lot rent coming up and things are tight. Uh, we don't ever want to take advantage of anybody, but there are people that are in situations where times are rough and they need out of this situation. We run comps, maybe a little bit different than how you run comps, but we want to make sure that what we're offering the customer totally aligns with what they're looking for. Also aligns with our goals for the property. If we're going into every home offering $0 and just trying to use any sort of manipulation persuasion to get them to take that deal, that's not going to last you long.

That's not going to get you the reputation. It's not going to give you more referral leads. It's amazing how many leads we get from just communication of others because we're doing right by the people. And that's the idea. So yeah, absolutely though. You can find those leads. You can offer zero, you know, as a, how do you comp it? How do you like what platform? Like when I teach real estate, just because a lot of people don't have the MLS, I tell people to go to PropStream, right? And I think PropStream is the most viable resource for real estate specifically to comp nationally

in almost any city. So where do you tell people to comp mobile homes? Yeah. So image village is a great place to find mobile homes that are being sold in communities. Primarily it's a nationwide mobile home community selling platform, if you will. But I can't rely on that only. We have to rely on our previous deals because it's amazing that you can buy the same home over and over again because they were built by the same manufacturer, but you just need to know, okay, is it selling for a couple thousand dollars more in North Phoenix opposed to Glendale or, you know, Marietta opposed to Atlanta and, you know, kind of having those, that idea. So we really rely on, yeah, image village is our starting point, but then also

taking notice and keeping, you know, keeping record of what previous home sales go for, because yes, you know, there's no MLS for this and you can put these homes on Zillow or get it somehow through the MLS. But the buyers that are looking for properties in communities, they're not working with realtors. They're not going on Zillow. They're going on MH Village or they're looking at Craigslist or Facebook, right? So you need to be able to meet them where they're at. Right on, dude. Well, hey, I appreciate your time, dude. Thank you so much. Again, info at mhgacademy.com. Yes, sir. Info at mhgacademy.com. My man, Brandon is my guy. Again, when I do, you know, stuff that, uh, is in parks, I'm always calling and make sure I'm

doing it right. And that's why I know what I know. So I appreciate you helping me out in that space. And guys, go check him out. Go hit him up. He'll answer your questions. He's a big giver. And that's why he wanted to be on this podcast. And I wanted him on the podcast because I know he wasn't going to hold anything back. So appreciate you, dude.

Thanks for having me, man. Appreciate you guys. Absolutely. Talk soon.