Searching For Repos

John’s perspective:

In addition to a couple of dozen park owned homes in disrepair, Madison Woods had an equal number of vacant lots to fill, so during due diligence we spent time looking at repos. Our real estate broker, David Protiva showed us homes that were available, explained what to look for, and gave us guidelines on what we should expect to pay. At that time (before Katrina), clean, well maintained SWs went for around $6k. After closing, more pressing issues required our immediate attention and it would be several months before we bought our first home.

To attract the quality resident we wanted, we knew the homes needed to be in excellent condition. Existing homes would have to be rehabbed. The average cost of the homes we’ve fixed so far has been about $4k per home. Most of the existing homes are 2 BR, but we found there was more demand for 3 BR homes. In order to meet this, we would have to upgrade our housing stock.

Not knowing exactly what price range the market would support, we decided to search for 3 BR SW repos. In Georgia, code regulations for mobile homes vary by county. Here in Morgan County, code stipulates homes brought in must be no more than 10 years old, and not have metal siding or roofing.

There are many ways to find repos. We were approached by repo brokers. For a fee, they will go out looking for homes that met our specifications. One of our residents drives a toter and is on the lookout for homes for us. We regularly check out the offerings on Vanderbilt’s website.

Our main source of repo homes has been Green Tree’s list, which comes out every Wednesday. We scoured the list for vinyl sided 3BR SWs within a 50 mile radius. We inspect every prospect before bidding on it. For most MH shoppers, this is a time consuming activity. Given our complete unfamiliarity with Georgia, it would be an almost unfathomable task were it not for GPS. I spend the night before inputting each location into a laptop computer loaded with De Lorme Streets (this program cost ~$45). The next day I hit the road at around 8 am, and follow the route outlined by the program. Having the most efficient route minimizes driving time, allowing me to visit 8-10 homes before it gets dark. It allows me to find homes in the middle of nowhere, 20 miles down a dirt road. Even with the aid of GPS and good planning, searching for homes is time consuming.

Part of the reason it takes so much time is that I do a thorough inspection of each home. In general, I want to know what it is going to take to get the home in sales ready condition. The process I follow has evolved into a standard procedure. I go through the home at least twice. On the first walk through, I get an overview and form a general impression of the quality and condition of the home. On the second pass, I focus on the needed repairs: holes in the wall, weak spots in the floor, condition of the paint and trim, salvageability of the carpet, presence and condition of the appliances, type of heating and cooling system, etc. I take notes on exterior and interior measurements, and other characteristics like presence of a hitch, AC, etc. I find a digital camera an indispensable tool. I systematically photograph each room and then every major repair needed. Pictures are crucial documentation, by the 4th or 5th home, the characteristics of the homes start to blend together in my mind, and it would be difficult to remember them distinctively several days later, when trying to prioritize and determine bids.

When we began aggressively searching for repos a couple of months ago, we found supply had fallen and prices had risen since our preliminary searching during due diligence. Katrina changed our plans.

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