Finance Companys, offer options to your PM's - Posted by ScottS(NC)

Posted by Chuck Beam on March 22, 2002 at 11:08:26:

Upstate NY is excellent for doing Lonnie Deals.
The one & only eviction I have done so far took
4 weeks & 4 days. Had the MH sold about a month or
so later…BUT…got it back again just recently…

I learned the eviction laws from a wonderful PM who
took the time to teach me. I have an attorney but
I do the evictions myself with the exception of using
the Sheriff’s dept. to serve the papers.
What is scary is NOT KNOWING the eviction laws thats
worse than learning them.

I did use my attorney to fine tune Ernest Tew’s Net
Lease & Option forms. My attorney was impressed with
the design of the forms.

Also in NY you don’t have to be concerned with “being
a dealer” and I don’t have to deal with any sales tax

There are just a few of us doing Lonnie Deals in
this area and we are separated by about 30-50 miles.

If you’re talking about doing Lonnie Deals in NYC
I think it would be very difficult due to very high
prices on old MHs.

Finance Companys, offer options to your PM’s - Posted by ScottS(NC)

Posted by ScottS(NC) on March 20, 2002 at 07:33:50:

Hi All,

I have recently stumbled on to something that has made dealing in parks even easier for me and I thought I would share it. My philosophy has always been that we are finance company’s just like conseco or greenpoint, as I stated in several old posts. This has made it simple to get into parks, I have never been told no and currently deal in or have permission to deal in 15 parks. Here is where my problem began.

My PM’s always want to run a credit check(on my buyers)and be super knit picky about every little late bill. And the potential buyer may have 3k to give me for a down payment but becuase he has a unpaid medical bill from 5yrs ago they are DENIED.

What I have started to do is offer the PM’s (once they say yes they allow financed homes in there park) two choices of service programs my company offers.

Service Program One: I collect the entire payment from the tenant/buyer and guarantee lot rent for the entire duration of the note. If for any reason there is a default I do the eviction and continue paying lot rent until a new buyer is installed in the home. In other words I mail the PM a Check from My account each month for the lot rent. If the tenant/buyer is late I wait for it not the PM. If someone has to chase the tenant/buyer for the money it is me. What the PM agrees to if this option is taken is to allow me to run my credit rebuilding program, which is a nice way of saying I get to put who I want in the home. All the risks have been shifted to me but no more 3k walking away for old bills or low FICO’S!

Service Program Two: I simply tell them that I will treat them just like conseco or greenpoint would. No Guarantees they pick the person and I am just the finance company.

I have had several PM’s go for program one and my down payment are getting larger because of it and when down payment get bigger Yields go thru the roof!

I just thought this might help someone who like me gets big $$$ waved in there face and have had to tell them sorry I cant take your money because your FICO is a 587. Take Care ScottS(NC)

  • No Dealer Required Here * - Posted by investorrob

Posted by investorrob on March 20, 2002 at 19:14:29:

Very good!!! Using this concept, and have a company name with Finance in it Like ABC mobile Home Finance Co.— how could anyone think of you, or call you a dealer.

When calling state goverment to see what is needed for starting Lonnie deals— why not tell them you are a small Financing Co. and do funding for Mobiles. You are calling to find out what kind of requirement are needed to comply. Bet they won’t say anything about a (lot to show mobiles or office with outside entry–etc:)

Just seems to fit what so many are fighting the states on. Show your Lending side to the State.

Hats off to you Scott *****

The very best of investing to you


Re: Finance Companys, offer options to your PM’s - Posted by lyal

Posted by lyal on March 20, 2002 at 10:54:53:

Do you lease the spot from the park directly and then sub-lease it? Just wondering if there might be a question about whether or not you actually have the right to evict if and when you get to court. (Legal Aide attorneys will grasp at any straw!).
All the best, Lyal

Re: Finance Companys, offer options to your PM’s - Posted by Emre (ID)

Posted by Emre (ID) on March 20, 2002 at 08:21:52:

Do you charge late payment fees on the lot rent portion also just like the note? Are the fees the same?

Emre (ID)

David Seger’s advice - Posted by Tony-VA

Posted by Tony-VA on March 20, 2002 at 08:12:30:

Scott has a realized an often untapped approach. Typically Lonnie dealers have always steered clear of collecting rents, preferring to just let the park managers handle this. Many times this was because the park insisted that they do not allow subleasing. Oddly enough, Scott mentioned privately that this very park also did not allow subleasing at first but quickly found value in the way Scott delivered the options.

David Segers kindly corrected me several times in the past when I suggested people steer clear of this. David reminded me that in business, success often comes from “controlling the deal”.

Here is how my own experience has proven David correct.

I did typical Lonnie deals and let the parks collect rent. The parks knew that I had a solid track record of evicting tenants who did not pay me, and would work with the park on lot rent owed.

Well the parks began to fall down on their job, hoping that my buyer had stop paying me when they had stopped paying the park rent. The park would wait until 3 months had passed before letting me know that my buyer was behind. (Lot rents were $335 per month).

To say the least I was not a happy camper when the park felt it reasonable to ask me for $1,000. We had sit down conversations to try and eliminate their propensity for procrastination. It did little good.

Even when I would stop by or call several times per week, the park would not bring up the topic, even when I asked how my people were doing.

The park got a wake up call when we finally layed down our hand. We had one home that they again let get behind $1,000. The Buyer was current with us when they were finally served with court papers by the park. The park asked us to fork over the cash the Buyer was behind. (I argue that VA law reads contrary to this but let’s remember, we do offer to guarantee lot rents and this has provided a large number of referrals and deals).

When the park asked, we advised that they we would not be responsible for their failure to take action against Their Tenant in a timely manner. We had our money and profit already so we advised that they could either play the game fair, or we would simply release our lien on the home. They quickly negotiated.

The point of this long post is this. Controlling the deal by collecting rents may be a bit more paperwork each month but it is a great value to you and your park. You can take quick action to get bad tenant/buyers out and keep the parks happy (more deals).

I have seen the light David.

As an aside, the eviction process in VA is much easier to do when evicting for failure to pay lot rent, than it is to seek a Warrant in Detinue, then trying to evict (this does seem to vary by county however).

Courts and Sheriff Depts. are familiar with landlord/tenant disputes and evictions. They are not so familiar with Lonnie deal repossessions and this lack of experience can cause red tape and time delays.


Ps. One last suggestion. If you take the “We Guarantee lot rents” approach, do so in a professional manner. Create a form that the park and you sign stating that you will guarantee lot rents only if the park notifies you within 10 days of the lot rent not being paid and that your company will ensure that this missed month is paid for. This is not unreasonable and provides both you and the park a clear understanding right from the start.

Re: Finance Companys, offer options to your PM’s - Posted by Steve W (WA)

Posted by Steve W (WA) on March 20, 2002 at 07:40:36:

a) How long have you been offering program one?

b) What is your success percentage, i.e., how often do you have to “chase the tenant/buyer for the money”?

Sounds like a good plan, a new take on being a problem solver, and getting rich helping others. Just curious on how the risk materializes, if at all.

Re: Finance Companys, offer options to your PM’s - Posted by ScottS(NC)

Posted by ScottS(NC) on March 20, 2002 at 13:14:32:


Although it seems close I do not lease the space. When I go to evict I can do it several ways depending on the park. 1. Evict them from the home as we do now. 2. Get the park to evict with me doing the leg work, i.e. posting ten day notice, filing to the magistrate ect. or my personal favorite and most lucrative. Going to the indvidual with a letter from the park saying they will be sued for the cost of moving the trailor unless they clean and leave in 48 hours. I have used this approach to aquire trailers that weren’t mine and to willingly surrender if in default. Really no diffrent then we currently do it only I have more control over the lot Take Care Lyal

Re: Finance Companys, offer options to your PM’s - Posted by ScottS(NC)

Posted by ScottS(NC) on March 20, 2002 at 08:32:31:


The tenant/buyer still must sign a park lease which in all my parks has a section dealing with lot rents being late. I simply collect the parks lot rent for them but the rules still apply. Take Care ScottS(NC)

Re: David Seger’s advice - Posted by Chuck-NY

Posted by Chuck-NY on March 20, 2002 at 23:51:57:

Tony that was an excellent post !!
I had a very sililar incident happen to me.
I have one of those Lonnie Deals that won’t go away.
After trying to work with the buyers after 1 year
I finally decided to learn the eviction laws and I
evicted the buyers due to unpaid lot rent (my payments
were also unpaid several months back).

I had verbally guaranteed the park the lot rent
and the park gave me a letter to give the judge
that stated I was the lot rent guarantor. I was
doing the lot rent & my payment type collection
which makes the park VERY happy and it keeps me
knowledgable about where the parks payments & my
payments stood. The problem was with me not the
payment setup…I didn’t understand the eviction laws
and until I learned how to do it myself I was afraid
to DEMAND the money due. I no longer have that fear
and I tell all my new buyers that I start evictions
the day after their grace period ends.

Anyway, I Net Leased & Optioned that same MH about 1
month after the eviction and now I owe several months
back lot rent from those people…like you said you
use to do my buyers got behind on their lot rent but the park waited 3 months and then they started the eviction…I also got stuck with the eviction legal costs. Next time I will have the park sign that agreement you mentioned so that 10 days or whatever we agree upon will be the limit…I really like that idea and it’s not unreasonable to the park. I got the MH back by voluntary repossession and is currently for sale.

If I don’t use your form idea then I will do the
collecting for both lot rent & my payment. Only
this time the first monies I receive go to lot rent
and the remainder goes to me…i.e…if they can
only pay me $327 then I take that money, pay the park
and start the eviction on my part…I will not guarantee any buyer that I won’t start an eviction
if I only receive the parks payment OR mine…
if anything…that is cause for eviction.
Thanks again Tony for that agreement idea !!

Thanks Tony - Posted by ScottS(NC)

Posted by ScottS(NC) on March 20, 2002 at 08:36:39:


It takes a big man to admit error and give credit to those who pointed it out. I think I speak for all here when I say thanks and keep posting! Take Care ScottS(NC)

Re: Finance Companys, offer options to your PM’s - Posted by ScottS(NC)

Posted by ScottS(NC) on March 20, 2002 at 08:23:41:


I have been offering program one(although I just recently made it formal) for about 3-4 months. The funny thing is I have built good relationships with most of my PM’s so even though some are not program one folks I still help out when needed. I think most PM’s are going to call the “lonnie dealer” when there is a problem because we built a good reputation and relationship with the PM’s. So in all honesty program one gives me some control while doing what I normally do anyway.

I have only had to call twice so far to tenant/buyers and evict one. But chances are if they are late on the lot rent they will be late on your payment also. So risk is not much higher for assuming lot rent collection responsibility.

It is very nice to have the control to put someone in my home without jumping through a bunch of other hoops. I still run my own credit report to verify the tenant/buyer is not a dead beat. HTH Take Care ScottS(NC)

Re: David Seger’s advice - Posted by JJZ

Posted by JJZ on March 21, 2002 at 18:00:53:

How is NY for doing Lonnie deals? And how much grief is it to evict in NY? Do you need a lawyer all the time?
Thanks, Jim Z