For those of you who have taken back homes...... - Posted by Nate-WI

Posted by Michael(KCMO) on March 24, 2006 at 22:39:52:

As far as paperwork and keeping things simple for tax purposes at the end of the year, in situations like this I actually write up a purchase contract (along w/ title and all accompanying paperwork) and BUY the home from them for the outstanding balance of the note. That way, the note is technically paid off and ownership of the home is transferred back to you. No money actually exchanges hands, it’s all on paper. This will increase your tax basis in the home to the new “purchase” price, thereby reducing your taxable income at the end of the year.

That’s the way I understand it. I’m not an attorney or an accountant, so take it for what it’s worth.

Good luck,
Michael(KCMO)

For those of you who have taken back homes… - Posted by Nate-WI

Posted by Nate-WI on March 24, 2006 at 12:29:12:

I got a call from one of my noteholder’s today. They want out of our agreement due to some family issues as they are moving out of state. They need to sell the MH asap. They asked me if I wanted the home back. I told them that I needed to take a look at it to see the condition of the home.

They still owe me about 3.4K. She told me that they will put new carpet in the house for me before they leave. This is my first time taking back a home. I have the title in hand so that’s not an issue plus they won’t trash the home. They are good kids (20 and 22 years old). Do I ask them for the keys and take the new carpet as a payoff? Do I ask them for the carpet and 500 bucks? I know I can re-sell it quickly for 4.5 to 5K on a note. My first cash cow I guess. Your thoughts…

Nate-WI

get what you can - Posted by JD (IL)

Posted by JD (IL) on March 27, 2006 at 18:50:19:

Get what you can, don’t be greedy. If they leave it clean, you’re money ahead. Don’t underestimate what you can get for it. Forget price, think payments over long term. $5500 cash,but more depending on downpayments and payments… you say you’ve got $1000 for a down, well, I could do $275 a month for 3 yrs on that… of course you understand I have to charge more if I’m financing, and a higher interest rate then a bank. I don’t have the kind of resources a bank does and there’s risk.

People understand that and emphathise. With any luck they’ll pay the cash price. Not often, but sometimes.

Good luck
JD

Get a sign in the window ASAP. - Posted by Dan (Michigan)

Posted by Dan (Michigan) on March 24, 2006 at 14:56:40:

Fresh carpet, a home in the black, and the entire month of April to show and sell it to a new buyer puts you in a good position.

Along with the new carpet, make sure they agree to help you show the home while they’re still occupying it - of course with the understanding that they no longer own the home. Place an INFO TUBE full of flyers on the outside of the home that explains the purchase options so that you don’t have to rely on the current occupants to do any marketing for you, if you don’t think they’re up to it.

Ask the occupants to transfer their security deposit to you to cover your future holding costs, marketing costs, etc.

Re: Probably - Posted by JeffB (MI)

Posted by JeffB (MI) on March 24, 2006 at 13:22:16:

How much do you have left in the home? I wouldn’t be greedy… if they’re offering to recarpet the home and leave it in good condition, that would be good enough for me.

Would you buy this home with new carpet for $3.4k to resell?

these words are golden nuggets - Posted by Steve-WA

Posted by Steve-WA on March 27, 2006 at 19:17:34:

“”""“well, I could do $275 a month for 3 yrs on that… of course you understand I have to charge more if I’m financing, and a higher interest rate then a bank. I don’t have the kind of resources a bank does and there’s risk.”""""

these are the things that one hears in lobby discussions that makes one whip out the notebook and pen . . .

great fine-tuning comment

Re: Get a sign in the window ASAP. - Posted by Nate-WI

Posted by Nate-WI on March 24, 2006 at 15:11:31:

I have my owner financing signs that I can post. They haven’t paid the deposit yet. Don’t ask me the 5 W’s. Anyways they owe the park 400 bucks for water repair. The deposit is 300 bucks which the are paying next week. So they will owe them lot rent for April and the extra 100 bucks. They know that this must be cleared up before I entertain in taking back the home. I will try and get some holding cost money out of them as they are getting ready to leave.

I would hate to show the home right now. I’m gonna wait until they are gone. They have a young dog who is tearing up the place and truth be told they are not the most organized bunch. I will start marketing this home with a couple weeks left in April.

Nate-WI

Re: Probably - Posted by Nate-WI

Posted by Nate-WI on March 24, 2006 at 13:57:37:

Depends on how you look at it. I bought if for 1.5K and had about 1.9K when I sold it for 4.4K with 400.00 down and monthly payments of 131.00 a month. I sold a partial purchase for 13 months of payments for 1.5K. So right now I don’t have any money left in it. I am however on the hook for 9 months of payments to my note investor as I guaranteed payments to him. Not a big deal if I can sell it for the same or even more. I should be able to sell it for around 5K. Your thoughts,

Nate-WI

Re: Probably - Posted by osupsycho (OK)

Posted by osupsycho (OK) on March 24, 2006 at 22:50:17:

Nate,
My thoughts based off of your numbers are you are selling your homes to cheap. But that is just me…

I don’t have any homes that I would sell that cheap unless it was an all cash price or it was a fixer-upper. New carpet and appliances in even a 70s model 2x1 is gonna be over $6500 financed price for me (got one right now like this). My NADA CD will back up this prices as well so most buyers don’t even question it. Just keep in mind that most only care about down and monthly payment and play with the number of years till it makes you happy. For more on this read Doc Whislers old posts…

Just my 2 cents worth,
Jad

Re: Probably - Posted by JeffB (MI)

Posted by JeffB (MI) on March 24, 2006 at 14:12:55:

So your liability (payments to the investor) are limited to less than $1200. If it were me, I’d definitely take this one back, especially if it sounds like you’re going to get it back one way or another anyhow. It might as well be on your terms. Maybe ask the couple to pay up a full month’s lot rent before they move out, to reduce your holding costs?

Re: Probably - Posted by Nate-WI

Posted by Nate-WI on March 25, 2006 at 05:22:45:

The reason I sell that low is based on the market here in NE Wisconsin. I sold it for 4.4K last fall but I had it priced to move since winter was approaching. I’ll bump up the price a little bit. I think I need to do this anyways as I am probably selling my tin cans to cheap in order to move them fast. DP and monthly payments are the key like you said. Thanks for the reminder.

Nate-WI

Re: Probably - Posted by Nate-WI

Posted by Nate-WI on March 24, 2006 at 14:20:22:

I just got back from talking with the payors. They are gonna move out at the end of April. This is what we have agreed to (tentaively speaking of course) They are going to carpet the entire house and leave the washer and dryer, which were not there when I sold them the house. They are also gonna fix the screen to the outside door. We did talk about extra monies for holding costs and we left the door open to discussion as we get into April. Funny you mentioned that as we appear to be thinking the same thing.

Nate-WI

Re: Probably - Posted by Marc Faulkner

Posted by Marc Faulkner on March 27, 2006 at 18:42:53:

Nate,
I would go for 5,995 w/1k down and a couple hundred a month. This gives you a new down payment and higher payments than your last payers were paying! Thats all you can do is make lemonaid…

Re: Probably - Posted by Ken L (MI)

Posted by Ken L (MI) on March 25, 2006 at 08:36:08:

What area of Wisconsin are you in?