Posted by Cindy - OR on June 02, 2006 at 14:32:52:
The PM ended up asking for first and last lot rent and a lot damage deposit. The buyer was going to give me 1k down. She ended up giving me $300 cash and I tacked another 1k to the Note, telling her she could “finance it”.
Yes, I saw her credit, it’s more of a no credit situation. She just turned 24 years old.
There is a 50 year old friend and neighbor who co-signed.
The seller’s purpose in moving was to get another bedroom for her nephew and take custody. She just saved a 13 year old boy from foster care. And the buyer just got her 18 mo. old away from his father and grand parents who left a lot of bruises. What’s the yield on that?
You are completely right about keeping business - business. The numbers have to work. I really appreciate your post. I won’t be able to help anyone if my own life is a mess.
Well, after attending the convention and meeting Lonnie and his lovely Wife, I decided to blow the dust of DOW and do one.
Found a seller and she found me a buyer, I found the seller a place to move into. Everybody’s happy…
The problem is the park owner does her own financing and makes it really difficult for the new people coming in IF they DON’T buy and finance from her. Even the realtor who works this park told me this. So, my buyer qualified for the park. The PM is ok with all this, but the problem is now the Park Owner is saying my buyer has to come up with nearly 4!! months lot rent in advance! Can she do this? Does everyone moving in the park have to roll the dice on move in costs? I guess I’m looking for some kind of fair housing act. Thanks
in my state this is legal but your required to pay interest on anything over one months rent so it is virtually unheard of
this rule the PM seems to be a catch 22 kind of thing b/c the people who have 4 months lot rent to pay as a security deposit are likely the ones who have good enough credit that they shouldnt have to pay that much and likely wont, and the bad tenants (which it seems the park is trying to protect itself from) dont have that much to put towards a security deposit, hence the reason they are looking for affordable housing in a MHP
the only legal cause you would have is if she is letting HER people in with different stipulations than YOUR people ie. only 1 months rent for her people and 4 months for yours
sadly the burden of proof and action to sue is all on you, and say you sue and win, what have you really won?? i have been in situations where i KNOW what a PM is doing is illegal but when you get all caught up with the “legal battle” and waste a bunch of your precious time, energy, and money fighting it, you forget that your sole purpose in business is to make money not teach people a lesson…as frustrating as it is, make sure you don’t forget this as you decide what to do…
This might be the obvious or the hindsight, but should you meet with the PM and lay out your goals, have a cup o coffee, ask what the PM expects of you, present some “what if” questions, I find that being candid works well. When I approached the PM of the park I am working in I said here is what I want to do YADA YADA is this acceptable to you, his response was and continues to be music to my ears ( he has handed me several deals and there are a couple in the works as we speak) So though it may be to late this time, maybe next time you should should lay your plan out a little better. One more thing, Breaking ice is often times neccesary when ice fishing, When I entered this park I was told by a realator that I would be wise to not insult the park manager by offering a finders fee, So I went to the PM and explained I intend to pay a finders fee of $200 for the units and asked if he would be insulted, he was happy with this new found fortune, I guess the realator was just simply protecting her money tree, I am sure glad I did not believe her.
As for your question, the correct answer lays buried in your states landlord tenant laws. From my understanding, most states do restrict the maximum amount of “security deposit” that a landlord can collect but from a quick search yours does not appear to be one of them. You’ll need to check your local laws yourself to be sure though. My question is why is the park wanting to charge so much? Is the tenant/buyer a really bad credit risk or is the park uncooperative? If it?s the latter then finish this deal and find more fertile ground.
Thanks for the great post/help and the quick search. I will check my local laws. I was told the owner wants a big deposit as a way to punish the buyers that don’t buy from her (realtor’s words, not mine) The owner has quite a few vacant homes right now, all hers, no one paying the lot rent. Another “Tenant” told me today the Owner is getting pretty “cranky” about it. The new buyer has pretty standard credit, no bankruptcy.
Posted by Daphne Lowe on May 26, 2006 at 22:49:50:
Cindy, I think you should let this go. Don’t get too caught up in the pieces you’re trying to put together. The park owner is key to solving the puzzle, if she doesn’t want you there, high tail it to somewhere you will be welcome. Its tough to make money in a place where your services are unwanted. Its hard to fight the system (the PO is the system) and win, especially as a neophyte. There are POs who will roll out the welcome mat for you. Find them.
Thank you, I read your post about a dozen times. However I didn’t want to let these two young Moms down. I bought the home tonight for $5,000, will sell it the day after tomorrow for $10,000 with a co-signer at 9.5%. Before the ink was dry. The park manager walked in. I thought oh no. He was great. Explained the fact that it is now a “deed” instead of a “title” in Oregon, where to go take care of that etc. He shook my hand, said “thank you” and then…much to my surprise, I was told that I could buy any single wides I wanted, that the Park Owner only wanted to buy the newest houses and no more single wides. I thought great, those are the ones I want to start with anyway… aren’t they?
I applaud your perseverence, but what happened with the 4 months worth of lot rent your buyer had to come up with? How did that end up going down?
One thing about your post really hit me. When you said
“I didn’t want to let these two young Moms down” it made shivers run down my spine. If you want to be in this business for very long (like, more than one deal) you need to be very clear about why you are doing this- to make money for yourself and your family. Do not ever justify a business decision because you don’t want to let someone else down- whether they be young moms or old drunks, or a “nice” park manager.
There are two reasons for this- the more good deals you make, the more people you can help through charitable giving, or education or whatever. But your business has to be about business.
I can’t tell you how many young moms I’ve met who appeared to deserve help until I ran their credit and found out that they had screwed their previous five landlords out of rent and had 6 judgements for unpaid utilities.
You did run your buyer’s credit- right? And how much is she putting down? I smell a set-up here.
Don’t know about the deed vs. title thing, but you’ve overcome some obstacles putting this deal together that would have scared off most beginners. However Daphne’s advice is rock solid, the PO or PM is the key to making this whole system work! If they are going to insist on 4 months security deposit your options in this park are very limited!
Try to work out a deal to where your buyer only has to come up with one months rent at most or no deposit if you willing to guarantee the lot rent. You?ve got your foot in the door, just don?t let them slam it shut and hurt your toes.