Buying on payments - Posted by Karl (Oh)

Posted by Shawn J. Dostie on July 16, 2002 at 17:52:29:

It doesn’t mean you are weak, it just means you have a good heart. Besides, one of those that got a better deal might just refer another buyer to you. Would you have had that easy sale referral if you had passed over the initial less than full value sale? As a Used car dealer I’ll take the customer and the fast nickel over holding for the full dime anytime.
Hope you and Sara are doing well.


Buying on payments - Posted by Karl (Oh)

Posted by Karl (Oh) on July 15, 2002 at 16:32:10:

I bought another mobile home Saturday from a private seller on payments. I?m having good luck with this technique when the seller isn?t desperate for cash, or just isn?t that motivated yet. An older couple was selling and had their heels dug in at $6k. We settled at $5k, $2500 now, $250 month for 10 months starting in September at zero interest. They never think to ask for interest. They just handed over the title and the keys, the purchase agreement and my handshake was good enough for them.

This is a very nice ?89 home in a good park I?m trying to break in to. I wanted this home, but didn?t want to tie up that much cash in another deal ($5k is still a lot of money for me!), and didn’t want to wait out their cash price and maybe lose the home. Buying on payments made the difference. (Equity rich and cash poor, as always.) I?ll sell the home for around $14k on a note, and should recover half my outlay on the downpayment. Later I?ll offer a cash discount to the sellers for the remainder of the payments.

Karl Kleiner

Re: Buying on payments - Posted by Jason R

Posted by Jason R on July 18, 2002 at 20:35:34:

Can you really sell used mobile home for that much (I’m in Indiana)? I’m interested in this type of investing for generating some quick and steady income without the outlay of cash. I also have found a few good deals for some MH’s (4 @ $500.00 each), but I’m a bit apprehensive about moving. Any tips? Thanks.


Re: Buying on payments - Posted by terry

Posted by terry on July 15, 2002 at 22:35:04:

remembered a post by doc back in late may or early
june that talked about running the note for 10years
and really making some money.
go to archives and type in whisler.
good luck

Re: Buying on payments - Posted by Helen

Posted by Helen on July 15, 2002 at 18:50:41:

That is interesting. I don’t think you can ever have too many “tools” in you toolbox. Your idea is just another tool to reach your goal.
I have just completed my first deal as of Saturday. I had a freebie given to me and my intention was to spruce it up and rehab to a point and sell long term financing. However, after cleaning human and animal waste and removing tons of debris, etc. I gladly took the first $2K that came my way. After factoring my cost of supplies and dumpster my yield was 180%.

My second deal was Friday and I’m now trying to sell it. It is a’99 subject to deal that is in a park. I’m not locked into one way to do things. I think flexible thinking is key in any business. My thanks to Lonnie, Ernest and everyone at this board for the good education. Best wishes Karl.

Re: Buying on payments - Posted by Karl (Oh)

Posted by Karl (Oh) on July 16, 2002 at 09:11:57:

I remember that post (“The long and short of it”). Craig assumed we were all selling homes for half of their retail value. We set the down and the pmt with a buyer, then make it a 3 or 4 year note, and let the price fall out at whatever. I did exactly that when I first started. I was out to create 3 year notes, and was ?aiming? at 36 months for no reason. I believe Craig suggested just increasing the price until you hit 10 years on your payments. I would struggle to justify that much of a leap, but I get his point. Don?t shoot yourself in the foot by under pricing homes when you?re the one taking the risk and carrying the financing.

I still struggle to separate my sell price from my purchase price. If I paid a little more than I wanted to on a home, I have no problem digging in my heels on a higher sell price. And I get it. But if I got a terrific deal on a home, I?m a lot softer on the sell price, when I certainly don?t need to be. This year I?m trying to teach myself to stop winging it, and just sell them all at ?full retail?. Maybe then I?ll end up with some 10 years notes.

Karl Kleiner