Posted by Tony Colella on March 21, 2006 at 12:57:14:
Its not easy when I think of the volume of deals you are doing!
Man, guess I need to cut down on the 3 hour lunches?
Na.
Finding A Motivated Seller - Posted by Ryan (NC)
Posted by Ryan (NC) on March 19, 2006 at 08:14:45:
There has been a lot of folks posting that are looking for mobile homes instead of looking for motivated sellers and I wanted to share a deal that shows what the difference is and how we can make more money by finding motivated sellers and solving peoples problems instead of looking for MH?s that are for sale.
Thursday morning I selected 18 promising ads from areas surrounding our home by about 150 miles and called all of them, I rule out half over the phone since they just were not ready to do business with someone like us and didn?t get an answer from a few. After working the ads I found 3 that were promising, then I hit one and asked the seller why they were selling after she dropped the price from 10k to 6k on the phone? She started explaining that the land owner was evicting her and that she had til 10:30 on Monday morning to be outa the house and have it sold, the home had to be moved and she didn?t have the money to make it happen nor could she find anyone to buy it and move it before the holding period expired. Folks talk about motivated, their choices were basically to sell for whatever they could get or give the home to the landowner and have nothing!
This home is an 1987 28x72 4/2 DW which is way bigger than I wanted, the home was in fair condition but had to be moved which I knew was going to add at least 4-5k to the total cost of purchasing this home. All in all it?s not our typical home by any stretch of the imagination and I would not recommend that someone just starting out try to take on a project like this!
I drove an hour and a half to look at the home and found things to be pretty much exactly as the seller described, she was leaving the refrigerator, stove, dishwasher, and 4 window ac units. The home needs painted and some floor repairs but is livable as-is and I thought it would be a perfect fit for one of our current buyers that is looking to trade up. After explaining the move cost and abandonment procedures in NC they quoted 3500 as their best cash price, after talking to the land owner I?m pretty sure we?ll have to use claim and delivery to get the home off the lot so I offered them two options. We?d give them their $3500 asking price payable $100 down and the balance the day we hook up to the home and take it off the lot which could be Monday or a few weeks or months down the road depending on how much of a problem the landowner gives us or we?d give them $1000 cash and deal with the problems ourselves. They looked at each other and looked back at me without saying a word and announced that they?d take the cash so we signed a purchase agreement with the seller for 1k and will have about 5k total in move and set up cost leaving us with about 6-7k invested in a home that is worth around 20k as-is.
Our plan is to trade up one of our current buyers with a growing family that currently has a balance of 3700 and a nice 14x70 2/2 home worth about 9k, I spoke with them about the home and a family of 4 in a 2 bedroom just wasn?t working for them and they simply loved the idea so we put it under a verbal contract as-is for 22k since we are offering to finance the sale using their singlewide as a trade in ala Karl. We?ll give them trade credit within one of our partnerships leaving them a balance of roughly 20k and a note payable for around $320 and we?ll get their home back to sell again for 9k with a note payable for around 275 giving the partnership a total paper profit of around 19k and note payments totaling almost 49k over the next 8-9 years.
I don?t really like doublewides (and I really don?t like the thought of moving one) but when you find the right seller things will fall into place and you get a nice payday when you have the knowledge and courage to make a deal happen even when it?s not really exactly what you where looking for to start with. This deal is an extreme example and deals like this aren?t an everyday occurrence but there are sellers like this couple in every market it?s your job to find them and solve their problem, THAT?s what we get paid for folks!
Best wishes,
Ryan Needler
Re: Finding A Motivated Seller - Posted by Steve
Posted by Steve on March 21, 2006 at 02:59:48:
Interssting deal, but not all that easy to find sellers like that one.
Re: Finding A Motivated Seller - Posted by Marty (MO)
Posted by Marty (MO) on March 20, 2006 at 08:30:30:
this is what I’ll hand someone when I can’t help them understand the difference between “looking for trailers to buy” and “motivated sellers.”
good job, Ryan!
great post and deal Ryan…nt - Posted by Joe C. (AR)
Posted by Joe C. (AR) on March 19, 2006 at 12:21:23:
.
Re: Finding A Motivated Seller - Posted by Tony Colella
Posted by Tony Colella on March 21, 2006 at 10:04:15:
When I focused on Lonnie dealing years back, my entire business was targeted at similar situations. I worked in only a few parks because they were large enough to keep me busy and had poor collection practices.
When they took someone to court for eviction, I made my move. Many a time I was going out the back door of the mobile home with the tenant signing the title and collecting my check, while the Sheriff was coming in the front door to evict them.
We would all meet in the driveway, the Sheriff, the park manager, the seller and I. Everyone understood that I was the new owner and the Sheriff escorted the seller off the property. The PM and I settled up on lot rent and went to work lonnie dealing the home.
I specialized in tenants facing evictions because it was easy. I would try to work with them before the court date but so many remained in denial that the deal could not work. Most never posted a for sale sign in the window or advertised in the paper. The would call me about a month away from doom (before the eviction) and act all confident and be unwilling to settle for anything less than retail. The day before the court date they would call me and drop the price in half. Once they realized that they would soon be evicted and have to move the home, they realized just how overconfident they had been. This was when they would tell me what they really needed from the sale of the home. Many times I was able to buy before the court date which helped the sellers leave without police escort and put them on good terms with the park manager for addressing the problem without court.
The same type of experience held true with other motivating situations seller’s face such as divorce, loss of job, new job trasnfer, purchased a new home somewhere else and paying lot rent on this vacant unit.
I even bought from mobile home brokers who saw how fast I sold homes and went nuts buying up lonnie deal homes and trying to flip them for retial cash. Eventually they would call me and dump the home for a grand or two to be rid of the nightmare. Some took me took lunch to find out how the heck we did it!
I did buy some homes from people who did not need the money but for the most part, these folks have the need and the right to hold out for a retail sale. The don’t need me.
Focusing on those who need us made better sense all around. They are out there. At first it will take work to find them but once you are established, they will find you as word spreads. In many cases, you become their safety net (remember they remain in denial as long as they can).
I would get calls out of the blue from tenants asking if I could meet them at the courthouse in an hour (the time of the court date for eviction) so they could avoid having to go into the courtroom.
This may sound as though I preyed on folks in dire straights but for those who understand the reality of this business and have seen tenants deny, deny, deny their problems up to the last second, you realize that they have exhausted all of their other options (usually by procrastination) and looked to us as the ony way out. I did not call them, they called me. I did not low ball them, I used Lonnie’s techniques. I never once had anyone leave mad. Most of the time we would meet with the park manager, settle up and walk away with them shaking my hand thanking me (ladies tended to hug). They could now leave with some cash and no fear of the debt haunting them or someone coming after them for more money because they have just abandoned the mobile home in the park.
Find a means to solve the problems that motivate your market and get that solution in front of them!
Tony
Re: Finding A Motivated Seller - Posted by Ryan (NC)
Posted by Ryan (NC) on March 21, 2006 at 07:10:31:
I didn’t say it was easy, if it was everyone that came across this board would be retired multi-millionaires in a matter of a few years. On the flip side, it’s not hard but it does take time and persistent to locate someone that needs to sell for whatever reason… These folks are an extreme example of someone that HAD to sell by a specific time for a specific reason. It coulda just as easy been someone that had bought a new house a couple months ago and has been making 2 house payments and is under financial pressure, a recent divorcee needing to liquidate, someone moving out of state next week (or an out of state seller), or any other reason that puts them in a position that they NEED to sell.
You just have to keep talking to sellers on a regular basis until you find the ones that need to sell and solve their problem for them.
Best wishes,
Ryan Needler
How can you sleep at night?! - Posted by Karl (Oh)
Posted by Karl (Oh) on March 21, 2006 at 10:19:02:
nt
And this from … - Posted by Lyal
Posted by Lyal on March 22, 2006 at 13:38:41:
Mr. “Instill Despair”!!!
LP