Pretty new or not, Ed, you got the major point of this biz. We only think we are dealing in MHs, but our main financial vehicle is p-a-p-e-r. It doesn’t really matter that much what folks think you are selling, the product is the financing. Mass market manufactured goods are not sold because of the product, but because of the financing. For example, most of the entire NC furniture industry relies on selling p-a-p-e-r, not massive ugly reclining couches. Best Buy doesn’t sell big screen tvs–that’s a by-product. The real product is p-a-p-e-r.
As Doc Whistler’s post pointed out, the way to sell notes is to offer full recourse. Once they’ve established a good reputation, those that do generally have buyers standing in line to buy. In fact, good note folks often have people offer them $$$ unsolicited.
Developing a good reputation, & a good network of fellow investors is really key in this biz. That’s one of the things I like about MHs–it isn’t a lonely work-all-by-yourself kind of deal. Socializing here & @ MH events, like Boot Camp, is important; it’s not only productive, it’s a great deal of fun.
I have sold 11 Mobile Homes using conventional financing. It’s a pain in the butt. I could sell them so much faster owner financing. I am closing monday on SW on its own 1.1 acres. I have a buyer ready to put in with 100% owner financing. I would be willing to sell the note for 75% of purchase price. Is that discount attractive to most note buyers?, or what is a good discount for a quick note flip?
What’d you pay me for my black car? - Posted by John Merchant
Posted by John Merchant on June 24, 2007 at 14:40:59:
What? You mean you want MORE info than this?
Isn’t it enough to say it’s a car and it’s black?
In other words, your wanting a blanket OK on anybody’s paying you 75% for a “note”, without a LOT more info is just the same.
There are all kinds and grades of notes, from very poor to very good, and no smart note buyer is going to just tell you blanketly that sure, he’d give you 75% on just any old note you throw together.
Just like you’d want to know my car’s year, model, make, mileage, history and all about it, same with any savvy note buyer and your notes.
Spend some time studying the Note Forum here where you’ll learn a lot about notes, their creation, value, salability, etc…
You’ve asked a question kind of like: “Hey, I’ve got a shiny black car…what will you give me for it?”
Not quite enough info to give you an answer as no two notes are identical and value depends on credit and income of payor, market value of the collateral, location of the MH and land, etc.
Re: do MH notes at 75% get bought readily? - Posted by Marty (MO)
Posted by Marty (MO) on June 16, 2007 at 19:57:20:
this is a little off the beaten path… most people are just creating notes
to sell on the mobile, not the land. I know a couple of the Florida guys
sell l/h packages and carry the financing… Maybe you should post the
question over at mhu, too.
What makes it tough is the lack of seasoning. I would think it’d be fairly
easy to sell the note if you offered some kind of recourse, though.
Without recourse, you’re probably looking at a pretty steep discount.
Does the property appraise for more than the note value? Does the
buyer have decent credit? It’s hard to say how much discount is fair
without knowing details…
I’d try a local real estate club to find investors… It looks like it might be
a good fit for an IRA investor.
Re: do MH notes at 75% get bought readily? - Posted by Ed in Idaho
Posted by Ed in Idaho on June 16, 2007 at 18:54:22:
I’m pretty new at this myself, but I gotta tell ya, creating notes is the nuts and bolts of this business. Doing deals is just a way to create the notes. When you get the note I think the main things to consider are 1)percentage rate of return 2)risk of the note. Discounting the note is a way of getting to the % rate that a buyer will buy your note at, based on whatever risk is perceived. Higher risk , higher reward!
You need to read and understand this post. I think it was written by some sort of a financial genius.IMHO (LOL)Anyway it is the direction I’m headed. Hope it will help you too!!!