Current MH Note Deal - in the Works - Posted by will (WA)

Posted by Jered (WA) on April 01, 2006 at 11:41:19:

How much cash does the note holder NEED?

I would propose buying a partial. For example, offer $5K for 12 months of pmts. This is a yield of 73.3%.

==> The note holder gets $5K + a balance of the note ($8700) 12 months from now.
==> You get 73% yield, a 44% cash/cash return, and you have cut your exposure in ~half ($5K vs. $9K).

If all 12 pmts come in on time, do it again. In my experience, you can negotiate to purchase the remaining 16 months pmts at an even better yield.

Good luck,


Current MH Note Deal - in the Works - Posted by will (WA)

Posted by will (WA) on March 27, 2006 at 22:16:04:

Seller called me asking if I’d buy her note. She’s an out of town owner who wants cash.

Original Note:
20,000.00 @ 7.41% 600.00/mo for 38 months.

Current Value:
15,000 @ 7.41 600.00/mo 28 months.

Seller Offer:
9000.00 and same terms.

I said, lemme go look. Called Escrow this AM to set it up. Still need to go inside and meet owner but so far looks good.

Way I look at it:
15 months to cash back then 13 months gravy.
If I have to repro, I can sell it for $20,000.00 or more.
Unless I missed something this is a 59.25% yield.
10 months of seasoning looks good to me.
The Park it’s in is one I’d like to do more deals in I think, looks nice in good location.

Re: Current MH Note Deal - in the Works - Posted by John Merchant

Posted by John Merchant on March 30, 2006 at 24:09:24:

Will, I deal a lot in WA MH notes and I’d be glad t help you check specifics of this MH, MHP and note.

I’ve learned some MHPs to avoid like the plague, and some other things that could be of help to you and would be happy to chat with you.

I’m in Tacoma and have done MH notes in a number of counties in WA & OR.

Re: Current MH Note Deal - in the Works - Posted by Marty (MO)

Posted by Marty (MO) on March 28, 2006 at 07:09:27:

post the deal to the note guys on the other forum. I’d be curious about what they’d say.

We’ve bought notes, but they’ve been non-perfomers we’ve been able to get at steep discounts. This is a bit different than what normally comes down our path.

Keep us posted-


Re: Current MH Note Deal - in the Works - Posted by Tony Colella

Posted by Tony Colella on March 28, 2006 at 05:43:43:

Admittedly I am not a note Buyer but if I were, I would look more closely at the collateral. I would ask myself, “If they never make a payment, would I be happy to get the collateral back for that price?”

Mobile home notes go bad often enough, and are usually for balances far in excess of the cash value of the home. I would essentially view the note purchase as if I were buying the home. Would I pay that much for the mobile home to Lonnie deal?

From there, the decision is easy. If yes, then I do some due diligence on the payor. If no, then I go buy a lonnie deal at the wholesale Lonnie price and create my own note.