Any other way besides yield? - Posted by Ryan B (KS)

Re: GREAT LINE! - Posted by Barry (GA)

Posted by Barry (GA) on June 14, 2007 at 07:36:38:

“I firmly believe that if I provide decent opportunities, I cannot help but succeed.”

I really like that Tye!
Barry

Re: Stories per your request (Long) - Posted by Michael(KCMO)

Posted by Michael(KCMO) on June 14, 2007 at 06:22:04:

Tye,

I remember this story from when you were asking for advice on how to structure it. To hear you tell it again, and to hear you tell so many of your stories, inspires me to be a better person. I appreciate how the human element of your business is so important to you. In fact, I sometimes think it’s THE MOST important/rewarding part for you. That’s inspiring.

Thank You,
Michael(KCMO)

P.S.
To add a good story of my own . . .
A couple months ago I bought a one bedroom home. If you used the front dining room as a 2nd bedroom, which is what had been done previously, then it was a 2 bed. At any rate it was a somewhat odd floorplan and several wondered the wisdom of buying a one bedroom. I knew my park and knew it would sell. I ended up selling it to a young single mother with 2 kids. On paper this girl looked terrible - bad credit, unpaid bills, repo car, only a one-month work history (prior stay-at-home mother), etc, etc. What struck me when I met with her though was that she really seemed to have her head on straight. Never once did she make an excuse for her bad credit or other mistakes. She was coming out of a 9 year relationship and left as soon as it became abusive. The fact that she’s 22 and w/ the same guy 9 years said a lot to me about her stability. She had a plan. She had very little cash but paid off over $1,000 in unpaid utility bills from her credit in order to get approved with the park. All in all my gut said she would make a great buyer so we set her up on affordable terms to fit her budget.

She moved in last week and LOVES the place. She is SO grateful and appreciative of her new home. I feel really good about this deal. It was definitely a profitable deal for me, and a great opportunity for her to get started. I think she’s in a great place in life right now and if she continues to make the wise choices I’ve seen so far I really expect great things from her. I’m excited to watch her over the next couple years.

Anyway, my point is that I made good money, I feel really good about being able to help her, and she feels really good about having a place of her own. If I remember right the interest rate on the note was 16.21%. But what else was she going to do? Rent an apartment at $600/mo with nothing to show for it? (her lot rent and pmts are only $500/mo) Live w/ mom and dad in their 2 bedroom place with two kids? Stay in an abusive relationship? Get involved in another foolish relationship just to have someone to take care of her? What?

Re: why pay 13%? - Posted by Sailor

Posted by Sailor on June 13, 2007 at 16:51:30:

What do you suggest as the alternative for our buyers?

Tye

Re: GREAT LINE! - Posted by Marty (MO)

Posted by Marty (MO) on June 15, 2007 at 08:49:04:

ranks up there with ‘poor people have poor habits’ and countless
others…

we need to compile a book of this wisdom!

Re: Stories per your request (Long) - Posted by Sailor

Posted by Sailor on June 14, 2007 at 20:05:27:

I like your story, too, Michael. Even if ours don’t end up as well as we hope, I like that we try.

I heard a story today from someone who just did a very good deed–he got a contractor to fix a septic system FREE for someone who needed it badly & had no $$$. Good works seem contagious, & the best part is that some of the things that really make a difference in the lives of others take so very little effort or $$$. Stupendous yield, that what it is.

Tye

Re: why pay 13%? - Posted by Jen

Posted by Jen on June 14, 2007 at 13:00:49:

Tye,

Our buyers do not have “alternatives”. That is why they buy from us. A person with a 750+ fico, steady employment, and some cash has no need for our services. A person with good credit can go to the bank and get a personal loan for a trailer for a much lower rate than we charge. They then can offer us a much lower cash price and it will probably be accepted.

Most of our buyers have some type of “problem”. Poor credit(yes, some are medical, but not that many)inability to handle money, substance abuse, legal problems, and relationship problems, etc. These problems can and do severely impact people’s ability to keep their commitments. Extension of credit is based upon the ability to pay and a past record of paying. At some time in the past most of our buyers have taken some action to compromise their credit.
Many times a credit score can tell more than a financial story, it can also point to a life management issue. Yes, there are exceptions, but if this were not true, why do so many employer’s run credit checks on new hires?
So generally speaking,(unless, Anne, it is in business situation where the gain can outstrip the finance charges)a person willing to accept high interest is doing so because for some reason they have not properly handled finances in the past.

Re: why pay 13%? - Posted by Michael(KCMO)

Posted by Michael(KCMO) on June 13, 2007 at 17:41:17:

Jen,

I second Tye’s question, what do you suggest as a more “financially astute” choice for our buyers?

I was searching the archives for the answer to a different question when I came across this post and thought it applicable to this discussion:
http://www.creonline.com/mobilehomes/wwwboard4/messages/51537.html
I think I used 0% for simplicity sake in the example in the post, but the principle is the same. You can run new numbers if you like, but I still think we provide a great alternative. There is definitely a niche for what we do.

Regards,
Michael Stilfield

Re: why pay 13%? - Posted by Sailor

Posted by Sailor on June 14, 2007 at 19:35:51:

Yes, credit reports can tell important, often poignant, tales, but I don’t pay much attn to the FICO itself. The other info there paints a more complete picture than the actual score.

I disagree, though, about the medical issues. Medical bills are the #1 cause of bankruptcy. In this country folks are divided into two groups, those that have medical insurance & those that don’t. Trying to raise children w/out insurance is a daunting task. Emergency medical care is not affordable on ordinary salaries. We’ve had 2 separate incidents in my own family in recent years that required helicopter rides to the nearest trauma center. One was an accident requiring 13 surgeries & the other was simply a swallowed marble that didn’t go all the way down. If there had not been coverage, both incidents would have bankrupted the parents.

Contrast the cost of U.S. medical care w/my my own emergency visit to a hospital in Colombia, where I paid a grand total of $3, or to the less than $25 monthly cost of full coverage for a family of 4 in Costa Rica. When I see medical collection accounts on a credit report, I have to ask myself if this is a case of lack of individual financial, or a societal deficit. (Am I the only one who’s been billed $1200 by a doctor I’ve never met?)

Another common reason for poor credit is identity theft. It is not a rare occurrence w/in families, especially when there is substance abuse.

I’m not trying to make excuses for folks who indeed lack the education or sense of responsibility to maintain tidy financial lives. Just think not everyone is a deadbeat by choice.

Tye

Re: why pay 13%? - Posted by Ruben (KCKS)

Posted by Ruben (KCKS) on June 14, 2007 at 14:12:38:

Our buyers DO have alternatives. They can rent, they can use their down payment money and buy a trailer (that is in bad condition) for cash. They can stay where they are at now.

A person with a 750+ fico , steady employment and some cash might still not be able to afford a home based on debt to income ratio or may not want to deal with a bank. My widow had GREAT credit but was used to dealing with individuals and does not like banks.

“Most of our buyers have some type of problem. Poor credit, inability to handle money, substance abuse, legal problems and relationship problems”. Yes they do. Most of society regardless of their credit score has a problem you described including some very rich and famous people.

Jen I believe in making money based on a win, win, win concept. This means the seller wins when I buy the home from them and help with that problem, the buyer wins by getting a good home financed to them and I win by providing a service to my customers for which I am paid well. Maybe it helps my sales but I feel good when I help someone buy a home. Based on the tone of your posts I take that you think anyone who buys a home from a Lonnie dealer is a loser. If this is true I feel sorry for you because one important thing I have taken to heart from our mobile home community is the concept of making money and helping others at the same time.

I know that no matter what you say I will not see it your way and I doubt that with all of the posts to you that you will not see it my way. So I will continue making money helping others such as my sellers (sell their homes), buyers (buy a home), other Lonnie investors (learn to do what I do) and my money investors (make a good profit for loaning me their money to do deals). One day I will upgrade my Lonnie buyers to land home deals or starter stick built homes and will as Lonnie said have a customer for life. You can go on looking down on your customer’s I am sure you are making money at it or you would not be doing it.

Anyway good luck with your investing.

Ruben D. Flores

816 918-9041

Re: why pay 13%? - Posted by Berno

Posted by Berno on June 14, 2007 at 13:36:11:

“…inability to handle money, substance abuse, legal problems, and relationship problems, etc.”

Jen, you aren’t just describing ‘trailer folk’…you are describing 90% of human beings!

"Our buyers do not have “alternatives”. "

Yeah…if there are no other alternatives, Lonnie Dealers wouldn’t be able to keep mobile homes in stock! If these people have no choice but to grovel to obtain a home from us, then how could they possibly not keep current on their payments? Don’t they know that they “do not have alternatives”?

Just my thoughts…

-Berno