Posted by Paul_NY on March 30, 2000 at 24:24:18:
How do you find out ahead of time if trailer owners are on these entitlement program?
Paul_NY
Deposits on MH purchases - Posted by Michael
Posted by Michael on March 29, 2000 at 09:14:10:
I am a little nervous about offering a deposit on purchasing a MH (did not give one on my first purchase)…has anyone had any bad experiences? How did you handle? Is there anything you can do, besides post dating the check to protect yourself? I think my bank charges $20 to stop pay a check…
Thanks
Michael
Re: Deposits on MH purchases - Posted by Jacob
Posted by Jacob on March 29, 2000 at 23:02:29:
Hi Michael,
All of them are right.
I actually have given a cashiers check for the entire purchase price when I had the seller sign the contract.
Now, be aware I am not advocating you do that. I did it, because I found that the seller was more concerned about that check then the fact I was paying 20% of their asking price without negotiating. I like it, but am EXTREMELY careful about when I do it. At the least, only when the unit is vacant, and I can just get the keys and title. IN that situation, it has worked for me every time.
Good luck to you.
Jacob
Re: Deposits on MH purchases - Posted by Karl (Oh)
Posted by Karl (Oh) on March 29, 2000 at 16:27:38:
Postdating a check is no protection. A bank doesn’t care what the date is on the check, if its signed they’ll cash it. (Thats how my bank works.)
On the handful of trailers I’ve purchased, I’ve usually put $100 cash down and filled out a purchase agreement. One seller I didn’t like much, I only gave her $50, another couple I liked a lot, I gave them $210 down to help them make one more loan payment before I paid their loan off and stole…er…I mean bought their trailer. Maybe I’m putting too much down, but $100 seemed like a nice round number. I think in the future I’ll round down to $50.
Of course, there’s the larger downpayment in my post below…
Karl Kleiner
Don’t let the deposit part of the deal scare you - Posted by Dirk Roach
Posted by Dirk Roach on March 29, 2000 at 13:16:44:
Hi Michael,
Welcome to the wonderful world of Mobile Home Investing. In buying a Mobile Home from individuals most of the time you will need to pay a deposit, to close the sale and validate your contract. This is really not a big deal at all, and should not worry you in the least.
If you use the standard Lonnie “TO BUY” contract or some variation of that, you can give the folks (sellers) time to move or find a place. When buying the Mobile you simply put down some denomination to make it binding. Personally I use 10 or 20 dollar bill . I also explain that now I am legally responsible to buy the home. They (the sellers) get the rest of the money when they have vacated the home, leaving it in the condition that we agree on (again, put this in your to buy contract (it already is in the Lonnie Contract) and give me the keys.
As a lot of folks who are reading this now can see, this is a powerful tool. Say you don’t have any money, well now you have “x” amount of time (whatever the period is from contract signing, to actual closing) to get the money.
But what happens, if the sellers say need the money from the sale of the mobile home to get an apartment or whatever? Well this does happen from time to time. But again it is not a problem. I simply have them find an apartment that they want, and apply for it, when they are approved, I simply pay the apartment whatever it is going to take to get them in, providing that my buy amount (for the mobile) is more than the apartment move in costs.
I NEVER PAY THE MONEY TO THE SELLERS! What I don’t want to happen is the sellers go and spend that money on doo dads and then do not have enough to get out of the mobile that I bought.
Also many times simply talking to the apartment manager /owner and explaining that I am buying the applicants Mobile home, and then giving them a copy (with sellers permission of course) of the buy contract, does the trick.
Remember we are in business of making a profit, but the most profits are made when we are flexible enough and smart enough to solve others problems.
Good luck and I hope this helps,
Dirk
Re: Deposits on MH purchases - Posted by Tony-VA
Posted by Tony-VA on March 29, 2000 at 10:55:59:
I usually go with $50 plus the signed purchase agreement. I have never had a problem with people not going through with the deals. But then again, most of the people I buy from are extremely motivated because they are likely to lose the home in the near future. They want the money and want out of the obligations of the home.
I figure, $50 is worth the risk.
Tony-VA
Lessons learned - What not to do - Posted by Karl (Oh)
Posted by Karl (Oh) on March 29, 2000 at 16:14:18:
Here’s a perfect example of getting in trouble putting too much cash deposit money down, and not controlling the money as Dirk advises above (Dirk, I needed this advice a month ago!)
I bought a '96 14X60 a couple weeks ago from a young girl who was moving into an apartment. She asked for a $1000 down from me so she could pay the deposit/rent for her new apartment, plus buy some furniture. After she moved I would pay her the balance and take the trailer. I wanted to help her out (and get her trailer in the process), so I agreed.
A couple days after doing a purchase agreement and giving her the downpayment money, she called me crying because the apartment manager denied her application, because she isn’t working right now. (Before she told me she had already been approved). Now she has nowhere to move. I said no problem, just give me back the deposit money. She can’t - she went out and blew most of it on doo dads as soon as she got it ($350 on movies!). Now her problem became my problem, unless I wanted to walk away from my deposit.
The solution to this involved me taking a day off work (yeah, I’m still in the top left quadrant) to make arrangements for an apartment that would take a tenant without a job. I got her into an apartment by pre-paying a year’s rent. First I put the title to the trailer in my name, then I wrote a check to the apartment manager for rent, and then gave the seller the difference. I?m sure she?s blown the money already, but now I don?t care.
This one worked out, but could have easily gone south. I was happy to help her straighten out her problem, but I didn’t like being financially on the hook to do it.
As an aside to this, I got a call today from the Public Defender?s Office, they wanted to ask me some questions about how much I paid her for the home. It turns out the seller is in a local entitlement program, she shouldn?t have sold the home without permission (no lien on title, however), and the entitlement folks are hot! I explained how much I paid and where the money went, got the park manager to tell them it was a fair wholesale price, so at this moment I?m in the clear.
Kind of hard to anticipate something like that happening!
Karl Kleiner