A few Differences - Posted by Tony-VA/NC
Posted by Tony-VA/NC on September 13, 2003 at 20:29:01:
I am glad you see the value in expanding investments not only into parks but also the land/home packages.
The differences are your figures appear to run close to retail for these homes, though no doubt your area prices may vary from mine, the fact that you are buying at retail or using retail like terms may be what is damaging the income stream.
What I am suggesting to Briton is to look for motivated sellers of older mobile homes on land. These folks face many of the same oppositions that our Lonnie deal sellers face. They have a need to sell (for one reason or another) but none of the people interested in the home can seem to qualify for financing. The sellers cannot or will not provide that much owner carry financing to these credit risk homebuyers.
Just as the investors in traditional real estate, we must locate these motivated sellers and solve their problems. All of the creative real estate techniques are at our command on these deals.
You appear to be obtaining bank financing (or similar terms) which require you to come out of pocket with too much cash.
The solutions to this problem are the same ones employed by the intestors here on the main newsgroup. Subject-to deals, owner financing (or owner carry seconds), hard money deals, lease/options, wraps etc.
Banking relationships can improve your cash flow by providing better terms, especially when you are buying at a wholesale price.
Ask yourself this,“how many of these land/home packages could you do if you did not have to shell out $5,000 each?”
If your location has land/home packages, then you will begin to find the older land/home packages that can be aquired at wholesale prices (or terms) and marketed for rent (as in my post to Briton) for greater cash flow while capturing some equity.
We can, as you seem to indicate in your post, then increase the equity position by owner financing ourselves at a higher price if we so choose that exit strategy.
Briton, from what I can tell, is doing quite well at a young age, at aquiring and operating long term income streams. I am prejudiced here. This is my chosen niche. I prefer long term income vehicles that will provide for me now and in the future, regardless of my health or desire to create new business (ie retirement).
To each his own, no way wrong. Just a suggestion that you ask yourself that question again,“if I didn’t have to pay out $5k per deal, how many could I do?”