Posted by Tony-VA/NC on October 20, 2003 at 07:19:41:
Yours is a hard but good lesson learned. There should be no need to run off to the bank (in most Lonnie deals). Typically just signing the contract and giving them $20 cash with the understanding that they will receive the rest when the home is cleaned out.
I suspect in your case that the home was already vacant. With that said, the same process could have served you well. That contract would have bought you time to get the remaining cash, confirm with the park manager that the home can stay and the lot rent is current and to confirm that the taxes are current.
The beauty of this is that it is not necessary to carry all the cash with you. Yes, in some cases of vacant homes you may be able to strike a better deal if you have that cash in hand. For the most part, I found this to be a hazardous method. For me, there were not enough deals saved by having cash on hand to justify carrying that much cash. I prefer to rely upon negotiation, not a wad of cash to make deals happen. Words are far more effective than cash in my opinion. Cash appeals only to the greed of those sellers who are ready to run (in my opinion). If they run before I am ready then I could be out that cash. I also don’t find it to be good policy to flash cash. It is a good invitiation to getting bopped on the head.
The procedure above was always sufficient to tie the property up while I did my due diligence. If they have all your cash before you complete the due diligence, then they have little incentive to correct problems that are discovered.
On to the next deal Gary.