Armed Polite Society
Main Forums => The Roundtable => Topic started by: MillCreek on April 05, 2015, 10:11:53 AM
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http://www.seattletimes.com/business/real-estate/the-mobile-home-trap-how-a-warren-buffett-empire-preys-on-the-poor/
I had no idea about this. Mobile homes are not that common in this area since there is not much cheap land here.
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Ignorance is curable. I'm unsympathetic to people who make bad financial decisions without researching.
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^ That statement presumes the research is available. I bought a mobile home in about 1986 as a temporary place after a divorce --pre-net search engines, and indeed before the net was available to everyone.
Looked like a good deal, comfy, close to work, good neighbors... and the metal roof provided a good ground plane for my vertical antenna.(!)
Stayed there four years, then moved out of supercilious and snotty Boulder CO. By then the quality of neighbors had declined considerably and I got rid of it at a loss --dollar wise. Yet, as an interim place, it was ideal --despite the rule about buying what appreciates, leasing what depreciates. It was more like cheap rent in the interim, even with the dollar loss on re-sale.
It wasn't as if, at the time, you could walk into the library and thumb through the card index for "mobile home depreciation," after all. And it wasn't as if you could predict that the city of Boulder would put so many restrictions on student rental properties that housing became so expensive that students were moving in to mobile homes in groups and trashing up the parks.
So your statement is only true "if the research is available" and all possible external variables remain the same.
Terry
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It also assumes said company hasn't set itself up to *expletive deleted*ck as good and hard as humanly possible.
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Phone calls to find better interest rates. Visits to non profit credit counselors. Checking one's own credit before attempting to buy. Walking away from a bad deal. It ain't *expletive deleted*ing rocket science.
And these days, every special snow flake seems to think that "ownership" is a right.
It also assumes said company hasn't set itself up to *expletive deleted*ck as good and hard as humanly possible.
Um, I thought that was always the assumption? The lenders are in bed with the builders and the Realtors are in bed with the appraisers.
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But I though Warren Buffet was looking out for the best interests of the little people.
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But I though Warren Buffet was looking out for the best interests of the little people.
Funny so many of the comments at the site are people making the immediate assumption about the rich conservatives screwing people. ;/
I can see the system being amenable to catching "low information" buyers who might move into a mobile home park and who either have just not had any financial experience, or have been really bad at it.
I've actually been contemplating modular homes as a possibility in my retirement property search. Many properties I've seen already have them on site (often currently owned by retirees), and I've though a bit, given the current situation with my dad, about buying a piece of farmland with no structures on it, and just sticking a smaller modular on it to use for being there part of the year while still having to go back and forth. After my situation allows me to move fulltime, I could just keep it as a guest house, and build a regular home next to it.
Though from what I've researched (not extensively), outside of what looks like a mess regarding loans, which I wouldn't get, the modulars from reputable manufacturers are pretty well built, and while inferior to standard homes in some ways, are superior in others (such as energy efficiency). Certainly smaller homes can be a better choice for retirees. For those living somewhat in the sticks (Tallpine sticks versus 10 miles out of town), there is likely a bigger delta in cost differences between having a modular delivered, and the minimal construction prep needed, to having a boat load of different contractors charge extra for travel time and material transport.
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Ignorance is curable. I'm unsympathetic to people who make bad financial decisions without researching.
Ignorance is curable. Stupidity isn't.
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Ignorance is curable. Stupidity isn't.
stupidity is usually a symptom of ignorance.
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If I was selling a rifle that was worth $500 and I was able to find someone who would pay $700, should I turn that down or refuse to sell it at the higher price because that person is ignorant?
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I think folk need to do due diligence. OTOH, I despise those who set up overly complex systems designed to ensnare the less-bright or less experienced. Yes, it pretty much does become an unethical conspiracy to screw the left-hand side of the IQ bell curve.
Maybe the best compromise is to let unscrupulous lenders set up such complex systems, but also let locals beat the snot out of them when they become abusive and then run their families out of town with a nice slathering of tar and feathers? Make it less attractive to hook up with such companies in some fashion.
This sort of unethical/abusive system has history going WAY back. In a higher-trust, less diverse community, folks will look out for their less quick-witted neighbors and attenuate the worst of things (without completely eliminating them--horse/water). The sort of people who set up and prosper from these sort of overly complex systems thrive in diverse, low-trust communities.
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I read and studied everything that has been written here and remain confused.
What can you buy, with the exception of a mobile home, that you can get replaced with a totally furnished new model every two or three years at the outside?
The only other possibility I can think of is an oceanfront home along the East Coast (well, up to NC for sure).
stay safe.
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stupidity is usually a symptom of ignorance.
One can be intelligent, but ignorant (lacking information). In that case, ignorance can be fixed.
If one is both stupid and ignorant, piling on more information is less likely to help.
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Not to be a Sour Sam, but someone suddenly "discovering" that mobile homes are a depreciating asset is like someone suddenly "discovering" that smoking contributes to cancer. Not a real big secret, that.
Brad
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Not to be a Sour Sam, but someone suddenly "discovering" that mobile homes are a depreciating asset is like someone suddenly "discovering" that smoking contributes to cancer. Not a real big secret, that.
Brad
my issue on the depreciation front is the fact that they will "reposes" a trailer by destroying it, rather than suck the "loss" or just make adjustments and keep getting at least some money.
I'm sorry, but if the thing isn't worth anything to take back, why bother? Yes, that means someone gets to default on what they owed and keep the thing, but the other way just seems wasteful. =|
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my issue on the depreciation front is the fact that they will "reposes" a trailer by destroying it, rather than suck the "loss" or just make adjustments and keep getting at least some money.
I'm sorry, but if the thing isn't worth anything to take back, why bother? Yes, that means someone gets to default on what they owed and keep the thing, but the other way just seems wasteful. =|
From their point of view, they also get to displace someone and decrease the supply. If you are vertically integrated in any way (one or more of: MH builder, seller, financier, lease lots) it makes sense in a "destroy the grain to drive up the price of grain" way.
Yeah, not a nice thing to do, though.
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Not to be a Sour Sam, but someone suddenly "discovering" that mobile homes are a depreciating asset is like someone suddenly "discovering" that smoking contributes to cancer. Not a real big secret, that.
Brad
One would think it would be obvious.
We spent 1979-91 in two different mobile homes. It never did strike me as that good of an option, especially for long term. It was just what we could afford. A regular house might last well over a century. What I could see around me was trailers built in the 60s, beat to heck in the '80s.
(We got nothin' out of our doublewide when we left. Paid someone to cut it up and junk it.)
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When our church and school finally had the cash on hand to build a new brick & mortar building to replace the "modular" supplemental building, we lucked out and were able to freecycle it. Would have cost us $15k to demo and haul it off. Instead, some even poorer school/church with a mobile home delivery truck service parishioner solved both out problems.
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One would think it would be obvious.
We spent 1979-91 in two different mobile homes. It never did strike me as that good of an option, especially for long term. It was just what we could afford. A regular house might last well over a century. What I could see around me was trailers built in the 60s, beat to heck in the '80s.
(We got nothin' out of our doublewide when we left. Paid someone to cut it up and junk it.)
weirdly enough, the ones built in the 70s are not as crappy as you'd think.
at least this one isn't.
The floor and the stuff over the frame is all crap, but the frame itself is better built than a lot of actual houses. It's sad, because the frame is finally starting to have weaknesses from neglect. If we had pulled out floors and fixed the roof ten years ago, I'm betting this thing would stand another 40 years.
Basically, the obvious stuff was built to completely desingrate and force the buyer to replace it, but they aren't as crappy as you think if you pull the crap off and replace it.
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Lee, some of that depreciation is that you expect to do work on a traditional home. Yes, even to the point of ripping out and replacing walls.
I have some philosophical differences with the way the market 'works', and I see the 'common way of thinking' sold by the real estate agents and everybody else as the reason behind the housing market collapse.
So I'll list some points:
1. Houses do NOT actually 'appreciate' in value in most cases. What they actually do is depreciate slower than inflation.
2. Houses can maintain and increase their value through renovation and maintenance work. IE you put more resources into the home, it becomes worth more.
3. What generally appreciates is the land the house is on. But this is only true when the population is increasing, or an area is 'popular'. See Detroit for were the land can't even keep it's value.
4. You are generally far safer viewing your home as a capital investment for the most economical means of shelter of a given quality. IE 'it's cheaper than renting', than you are viewing it as part of your retirement 'nest egg' with the intent of moving to a cheaper place when you retire and the kids are out of the home.
Now, consider a mobile home.
1. Generally speaking, the owner doesn't own the land underneath the mobile home, so any appreciation the land doesn't help them.
2. Because it's viewed as a depreciating asset and is generally owned by poorer people, the maintenance doesn't get done.
3. Because they're generally purchased by poorer people, not only does the maintenance not get done, but it's built cheaper in the first place. Not necessarily true today - look up 'manufactured home' vs 'mobile home'.
4. The better constructed homes of today tend to retain mobility better - so moving one from a trailer park to a permanent spot that you actually own is more possible.
So yeah, trailer homes* can be a trap. But if you're aware of their quirks, they can be a worthy choice over a traditional home in certain circumstances.
That being said, you could and CAN purchase a mobile home that is as well or better constructed than your standard on-site built house today, but perception is a thing.
*I'm not sure of the terminology, but here's my take, and why I consider 'mobile home' something of a misnomer.
Mobile home: To me, these are the 'homes' that are actually built to be moved while occupied. Some have engine, driver's seats and all that, some are designed to be towed. They're built so you can put at least tens of thousands of miles on them. Due to this they're more limited in size, and appliances have to be special built to take the vibration and such. Cabinets will have locks or 'strong' magnets to keep them from flying open while being moved. They'll have a septic tank and water supply 'built in'.
Trailer home: A step closer in construction to a normal home, they'll actually have drywall, more normal appliances, and are designed to be hooked up to a water and septic system on a continuous basis. Generally not worth the effort to move once they've been in place for a few years, though the better constructed modern ones may be. Moving is much more of a pain, because while they've been left on the 'trailer', the trailer itself was probably cheap, the tires and maybe even the axles need to be replaced, the utility lines removed and secured, everything inside secured or removed, etc... Can also be a 'double wide' in that you match 2 trailer sized segments together. Otherwise they tend to be rather small for a modern family.
Manufactured home: Yet another step up in quality, these homes can count as the same as a on-site built home, and are often actually built 'tougher'. These ones are taken OFF their trailer at the install site, and placed on a permanent foundation. Moving one after the fact would only be a shade easier than moving a traditional house(which can be done). They often have basements, garages are built along one side, etc...
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I have some philosophical differences with the way the market 'works', and I see the 'common way of thinking' sold by the real estate agents and everybody else as the reason behind the housing market collapse.
So I'll list some points:
1. Houses do NOT actually 'appreciate' in value in most cases. What they actually do is depreciate slower than inflation.
2. Houses can maintain and increase their value through renovation and maintenance work. IE you put more resources into the home, it becomes worth more.
3. What generally appreciates is the land the house is on. But this is only true when the population is increasing, or an area is 'popular'. See Detroit for were the land can't even keep it's value.
4. You are generally far safer viewing your home as a capital investment for the most economical means of shelter of a given quality. IE 'it's cheaper than renting', than you are viewing it as part of your retirement 'nest egg' with the intent of moving to a cheaper place when you retire and the kids are out of the home.
+1, #4 is spot on.
I view a house as a long term rental where I'll get some of my rent money back when I sell it. A house is about the worst 'investment' there is, and the word 'investment' is a real stretch of the word as applied to home 'ownership.' (Another misnomer).
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A fool and his money are soon parted. Nothing new about that, and it has very little to do with mobile homes.
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A fool and his money are soon parted. Nothing new about that, and it has very little to do with mobile homes.
Or pay day loans, or title loans....
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A cheap mobile can be a useful thing to live in when money is tight- I spent years in one, saving to pay off property. Kept the rain off.
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It can certainly be done right.
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A cheap mobile can be a useful thing to live in when money is tight- I spent years in one, saving to pay off property. Kept the rain off.
Where I live you can buy a decent used mobile home for $18-30k and lot rent is around $300/month. If it wasn't for my wife, I'd probably be living in one.
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I'm thinking wall tent or Airstream if I ever go off the reservation...again. MH comes with all the home infrastructure and bills and few of the benefits.
When I was a kid I knew a couple who lived in a teepee for 4-5 years while they built their own log cabin. As in cut the trees, prepped and treated the logs, everything. Total loons but the teepee was on a deck, had wood heat and a TV. What's for a kid not to like?
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I remember reading a book about the British .mil in the 80's where it was mentioned that part of boot camp was detailed in depth instructions on things such as how to properly wash yourself and brush your teeth. This was needed, because a significant number of recruits had literally never had anyone to teach them to pull their foreskin back and clean under it, or the necessity of brushing all sides of one's teeth not just the front etc. On this very forum we've seen first hand accounts of teens who have never been taught how to read a clock. Moreover, it is (sometimes/often/nearly always) the case that the culture which spawns such people is not merely apathetic to bettering oneself, but actively antagonistic to it.
Things like payday loans or the scam mentioned in the OP could indeed be easily avoided by some basic internet research and etc. But the folks who are being preyed on in this way don't know that such things are possible, let alone how to do them. And they are taught from a young age that attempts to learn more and better yourself carry harsh negative repercussions.
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I remember reading a book about the British .mil in the 80's where it was mentioned that part of boot camp was detailed in depth instructions on things such as how to properly wash yourself and brush your teeth. This was needed, because a significant number of recruits had literally never had anyone to teach them to pull their foreskin back and clean under it, or the necessity of brushing all sides of one's teeth not just the front etc. On this very forum we've seen first hand accounts of teens who have never been taught how to read a clock. Moreover, it is (sometimes/often/nearly always) the case that the culture which spawns such people is not merely apathetic to bettering oneself, but actively antagonistic to it.
"bravo two zero", IIRC.
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"bravo two zero", IIRC.
Good memory! I believe you are correct. I enjoyed those books, a very down to earth look at the SAS of the time.
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MY mobile home is certainly not a trap! Never mind this cattleprod, I keep it handy for defense against....things. And those shackles hanging from the walls are merely innocent decorations.
Please do step in! I have cookies!
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Where I live you can buy a decent used mobile home for $18-30k and lot rent is around $300/month. If it wasn't for my wife, I'd probably be living in one.
Same here. Kids would happily trade stick built habitation for a more rural existence.
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bluestarlizzard mentioned,
Weirdly enough, the ones built in the 70s are not as crappy as you'd think.
After reading this thread, just for grins I google-mapped and street-viewed where my 1969 single-wide Schulte that I mentioned in Reply #2 was. It's still there, looking good.
Served me well for 4 years, and despite the ~$1000 hit over four years on "depreciation," it was a good deal.
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Same here. Kids would happily trade stick built habitation for a more rural existence.
I think a lot of people think "big travel trailer" when they think "mobile home". Modern modulars are actually pretty nice (and often nearly as much as a stick built):
https://www.google.com/search?q=modular+homes&tbm=isch&tbo=u&source=univ&sa=X&ei=R4EmVZvYKMmzoQS-2oC4Cg&ved=0CE0QsAQ&biw=1536&bih=742
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A modular home and a mobile home are different. Modular homes are made to be put on a permanent foundation (it's a home built in portable modules, thus the name). A mobile home is designed to remain on it's frame & axles.
Brad
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A modular home and a mobile home are different. Modular homes are made to be put on a permanent foundation (it's a home built in portable modules, thus the name). A mobile home is designed to remain on it's frame & axles.
Brad
My understanding from the article is that they're referring mostly to Buffet's company, which AFAIK, just does modular homes?
EDIT: Also, I guess my point was that "mobile home" kinda gets misused to apply to everything.
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I have a different take on the original story, nothing to do with the type of home. My take is that it's trying to make victims out of people who created their own problem. They commited a bunch of time and money without having a fully approved loan. It's the homebuyer version of "Ready, Fire!, Aim."
I've seen it more times than I care to recall. People will spend weeks, sometimes months, looking at houses and preparing for a move (up to having movers contracted and home renovation companies scheduled) without having so much as called their lender. Or there's the dreaded "I got an approval on line!" routine.
I'm sorry they lost their money, but my sympathy ends there. The situation wasn't Buffet's fault, it was theirs. They failed to do the most basic of financial preparation before committing other money to the deal.
Brad
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I think a lot of people think "big travel trailer" when they think "mobile home". Modern modulars are actually pretty nice (and often nearly as much as a stick built):
https://www.google.com/search?q=modular+homes&tbm=isch&tbo=u&source=univ&sa=X&ei=R4EmVZvYKMmzoQS-2oC4Cg&ved=0CE0QsAQ&biw=1536&bih=742
My step-grand-folks had a pre-built assembled on their land when they retired. You could not tell the difference from a regular farm house.
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I have a different take on the original story, nothing to do with the type of home. My take is that it's trying to make victims out of people who created their own problem. They commited a bunch of time and money without having a fully approved loan. It's the homebuyer version of "Ready, Fire!, Aim."
No I agree with you on what the story was about. I meant people here (and in general) seem to be mixing up what the actual structures were - at least those that Buffet has a stake in. That's kind of an aside. The story could have been about widgets regarding what people were going into debt over and making bad decisions about.
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Know what a tornado and a divorce in Oklahoma have in common?
Some old boy is gonna lose a trailer house.
When we bought our current home it was unfinished and uninhabitable. It came with a late '60s. early '70s vintage mobile home. It was a few steps up from living in a tent. We managed 2 winters in it before getting the house ready to move into.
We sold it "as-is" for $500. The young newlywed couple that bought it thought they were skinning us and we kind of felt we were screwing them a little so I guess everybody was happy.
I've told the story about moving it here before, 2 guys named bubba and a big truck.
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My step-grand-folks had a pre-built assembled on their land when they retired. You could not tell the difference from a regular farm house.
I've been in quite a newer few modular homes, ones that were built in pieces in a factory, trucked in and assembled by crane on a basement foundation. They appear to be way more solid then the stick built new home construction. Like no squeaks when walking, or floors are bouncy, etc.
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They are much better built. Incredibly so. I have had to do demo on them it sucks .
Sent from my iPad using Tapatalk HD
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A good modular home tends to be very well built. The glorified trailers? Not so much.
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Know what a tornado and a divorce in Oklahoma have in common?
Some old boy is gonna lose a trailer house.
When we bought our current home it was unfinished and uninhabitable. It came with a late '60s. early '70s vintage mobile home. It was a few steps up from living in a tent. We managed 2 winters in it before getting the house ready to move into.
Tallpine I think could relate.
We sold it "as-is" for $500. The young newlywed couple that bought it thought they were skinning us and we kind of felt we were screwing them a little so I guess everybody was happy.
Hey! Y'all get a room!
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bluestarlizzard mentioned,
After reading this thread, just for grins I google-mapped and street-viewed where my 1969 single-wide Schulte that I mentioned in Reply #2 was. It's still there, looking good.
My old trailer park is completely gone. When I took #1 son down to Carbondale for school, I drove through Champaign just to see stuff. The whole place was scraped away and replaced by student apratments (http://one-illinois.com/). No loss, but I wonder what would have become of us had we stayed.