$5,000 To Invest...Choose Plan A or B - Posted by Todd A. Schroeder

Real Estate Investing Mobile Homes & Mobile Home Parks
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Posted by Tony-VA on November 12, 2000 at 04:31:47:

Todd,

Deals like these happen every day. Lonnie dealers are able to buy at wholesale prices because we have CASH in hand and have been able to locate MOTIVATED SELLERS. We are able to sell for $10,000 because we are selling on terms that the buyer can afford. We are selling homes to people who do not have the $2500 cash to buy a home but have the ability to make reasonable monthly payments. They may have poor credit so banks won’t finance them. We are able to take the risk on them because we believe they can make reasonable payments and we only have $2500- their down payment left in the deal.

It does seem hard to conceive that we can buy so low for cash and sell so high on terms but that is how business is done. Buy wholesale, sell for retail. The retail price would certaily be lower if someone came up with all cash. But since they are not paying all cash, we are able to negotiate a higher price.

The beauty of this is that everyone still wins. The seller who could not sell their home got cash and could finally move without fear of judgments for back lot rent. Our buyers are happy because they are able to BUY a home for less than they could RENT. They will own this home in 3 to 4 years. We Win by solving the problem and making our money on the spread and interest.

Remember, CASH and MOTIVATED SELLERS are the key to business.

Lonnie’s book “Deals On Wheels” explains exactly how to do this. The book runs about $30 here at this site. With deals like the one above, do you think a $30 investment might be worth it?

Tony-VA

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$5,000 To Invest…Choose Plan A or B - Posted by Todd A. Schroeder

Posted by Todd A. Schroeder on November 06, 2000 at 21:36:11:

Plan A: Buy MH for cash at a discount then resell with owner financing. I like this but then all my cash is used up in 1 deal.

Plan B: Buy MH for cash then take out an equity loan and rent out the property. Same concept as with duplexes. This way I free up my cash to buy more Mobile Homes.

What is your opinion on which is better?

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And Just another Plan or two… - Posted by David Alexander

Posted by David Alexander on November 08, 2000 at 19:21:21:

and some thoughts. First of all let me say I’m glad your planning. Number rule of Investing, dont bury your cash until you can afford to bury it. The faster you can go Cash Asset to Cash the better you are.

While making your plan define your goal other than not getting you cash stuck.

Example: $2000 cashflow a mopnth.

Maybe a plan like figure what kind of yield you get when doing Mobile deals and work backwards.

Simple example… without the detail of actually figuring the yields.

Be picky and buy a minimum of two Mh’s for $2500 a piece, sell for say 10k each get 2k down and carry 18k in paper.

Discount and sell the notes for 50 cents on the dollar, or 9k, you now have 10k cash.

Buy 3 more homes for around 2-3k a piece. Get a total of 3k down and create about 27k in paper, (sell paper) and get 13k cash, plus the 3 and have 16k.

Buy 5 or so homes, get 5k as down payments and create notes worth somewhere totalling close to 45k, Again sell the paper, get 5k plus the 22 or so for the paper and start again with 27k.

Shop real well and you should be able to pick up about 10 mobiles and that would throw off 2k (little more) or so a month.

Or put your money into a mobiles that you can get financing on as you said and buy and sell them until you get to 30k or so cash and then invest for cashflow.

Hope this helps,

Doesnt matter the plan as long as you ahve one and it works for you.

The fundamental is your trying to produce a deal that creates cashflow and capital gains, and if you do a deal where you get both then you’ll get there faster.

David Alexander

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PLAN F - Posted by Carey_PA

Posted by Carey_PA on November 07, 2000 at 20:19:43:

PLAN F and the F stands for FREE: get 1 or two mobile homes for free or very little (like $300 to pay off back taxes), finance that or those mobiles and KEEP your $5,000 to buy maybe 2-3 more mobiles in the price range of $1,000 to $2,000!

$5000 is a good chunk of change to buy mobiles with!

CAREY

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I prefer plan E:… - Posted by Chuck-NY

Posted by Chuck-NY on November 07, 2000 at 12:17:14:

Buy 10 mobile homes for $500.00 each and then
finance them. Use the buyers downpayment to do
10 or more deals.

…and please don’t say “you can’t buy MHs for
$500.00 unless the roof,kitchen & bathrooms are
missing”

I’ve purchase 2 MHs for $500 each and another
for $1,000…and they were not junk.
One did need some rehab.
One was a 1985 14 x 56 2/2 and the other was a
1990 14 x 56 2/1. The $1,000 one was a 1983
14 x 56 2/1.

So you ask…"how do you buy MHs for $500 without
it being a “post tornado sale?”

Go back and read Deals on Wheels.
There is one phrase Lonnie emphasised
and that is…Deal ONLY…I repeat ONLY
with MOTIVATED SELLERS.

By the way, Tim’s idea would also be a very good choice.

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Plan D - Posted by Tim (Atlanta)

Posted by Tim (Atlanta) on November 07, 2000 at 08:10:27:

Plan D : Buy MH for cash at a discount, resell with owner financing. Sell a partial on the note to recover your initial cash investment.

Benefits to you :
1.You get most if not all of your money back to do the next deal.
2.Your yield is infinity, since you have nothing invested in the home.
3.None of the hassles of renting out the property (your plan B)

Benefits to the partial purchaser :

  1. Good yields for very little work. What can I say, I am lazy (no, make that efficient).
  2. Get better returns on a more consistent basis than the stock market.

I have emailed you an example of how this works.

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Plan C - Posted by J.P. Vaughan

Posted by J.P. Vaughan on November 07, 2000 at 06:41:49:

Plan C: Buy two MHs for $2,000 to $2,500 each. Sell one
with seller financing. Sell the other for $5,000 or more Cash.
Repeat.

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Re: And Just another Plan or two… - Posted by Todd (Wisconsin)

Posted by Todd (Wisconsin) on November 12, 2000 at 03:09:49:

David:

If I can buy a MH for $2,500 why would anyone pay $10,000 for it when there are MH for $2,500 for sale just like the one I bought?