down payment - Posted by park austin

Posted by soapymac on May 11, 2000 at 08:01:27:

Asking for a down payment on a MH is not unlike asking for a down payment on a megabuck home entertainment center. When I was a manager for Radio Shack many moons ago, I borrowed a technique from Tom Hopkins Book, “How To Sell Practically Anything.” The wording goes something like this:

First, decide how much YOU want as the down payment. Then offer the “Triplicate of Choice.”

“Mr. customer, there are those individuals who can afford to ‘invest’ (125% of your down payment amount.) There are a fortunate few who can invest as much as (150% of the down payment.) Then there are those people who, through no fault of their own, can only afford to invest (your down payment amount.) Tell me…which of those ‘investments’ best describes your situation?”

Whatever amount they say, then use Ernest’s closing answer: “I think we can work with that.”

Worked for me, anyway.

Cordially,

Roy MacLean
"soapymac"

down payment - Posted by park austin

Posted by park austin on May 10, 2000 at 20:00:27:

I was wondering If someone could tell me how to
decide what a minimum dollar amount should be for a downpayment considering a person has alright credit,
poor credit good credit etc. I realize that its possible
for a person to do a few thousand dollars in damage to
a mobile home, but generally speaking on average what
kind of downpayment do I need to cover my gluteous-maximus
for a good credit person, an alright credit person, or a poor credit person. Thanks park.

I agree with Mr. Tew - Posted by Dirk Roach

Posted by Dirk Roach on May 11, 2000 at 13:52:42:

Out here in CA and in a few other markets I know several people (companies) that ask for 10% down no matter what. In fact it is even stated in their advertising. However these are high volume organizations and often times do not even personally show the respective mobile home. It is all done through lock boxes etc.
However I DO NOT AGREE WITH THIS METHOD.
As Mr. Tew stated, often times one is surprised with what folks can put down.
I know I have been numerous times. The added benefit is if someone has several thousand to put down, you can juggle your PV up a little, in relationship to that. Just depends on how good of a salesperson you happen to be that day. Now I’m not saying that there is any need to get greedy. Personally I believe in Volume. So I don’t have to make a killing on every deal, just a modest profit on a lot of deals.

As far as down payments go though, I have also seen the opposite go down a lot of times, by other investors, namely not collecting a big enough down payment. Usually there is a weak link in the overall plan (poor advertising etc) that leads a new investor to take a minimal down payment (couple hundred bucks). The New investor sees approaching space rent, has other issues etc. which put him/her in a bind and they just need to move the home. So they fold and take a small down payment from just anyone. Of course most often they either wind up in court or if they’re lucky getting the mobile back.
See the bottom line is you want the buyer to have a “homeowner” mentality, not someone who just needs a place to crash for awhile.
Say a guy or gal is making like $275/$350 a week. If you ask for a grand down, then basically that’s like a month of work for them. You better believe that they are serious. And they’ll take this new responsibity serious too.
Anyhow hope that helps, and listen to Earnst, the man knows what he’s talking about. He has a great book too.
Dirk

Re: down payment - Posted by Ernest TEw

Posted by Ernest TEw on May 11, 2000 at 06:31:11:

Before asking for any particular amount of down payment, we ask the prospective buyer, “what would you be comfortable with for a down payment?” Sometimes, they will surprise you by naming a higher figure than the minimum you were prepared to accept. In those instances, we simple say, “I think we could work with that.”

If the figure the prospective buyer mentions is too low, we might then mention the minimum we would need for a down payment. If they can’t handle that, we might talk about taking a promissory note for part of the down payment. Whenever possible, it’s better if they can secure the note with something, such as their car or pick-up truck. If they later default, you can sue on the note and take them to small claims court without the expense of a lawyer.

The minimum down payment you will accept might be similar to the amount a typical buyer would need when renting a house or apartment, such as security deposit, first and last months’ rent etc.