Posted by Scott (OR) on June 04, 1999 at 02:54:33:
Hi Angelia-
I too applaud your enthusiasm, however you will find that Lonnie’s advice would be to make it the seller’s problem if he still owe’s money before you go dishing out dollars. He could easily take your $3500 and never get the title to give to you, due to some un-forseen circumstances. Trust me, he isn’t going to get anyone to fork out this money yet with his situation. If it is with a local bank or credit agency and you can walk with him into a bank and make the transaction then that is one thing. Just don’t set yourself up for a “dose of reality” so soon in your Lonnie endeavors.
As far as your thinking about options goes my only question is, “why”? Buy low, take title and finance. Borrow the money from a friend, relative, credit card or whatever it takes to get the home. Create note, sell 1/2 and keep going…
Hope this helps.
Scott
I am so green, that grass is still growing under my feet…
Can I work this deal somehow with limited capital and poor credit?
1979 12x60 mh 2/1 with appliances and in great condition.
It is located in a nice family park (lot rent $100/mth). Owner is asking $4500.
Reason for selling: He has just completed the purchase and repair of a larger mh in the same park.
Motivation: Needs to get the cash to pay on the loan he acquired to purchase the second mh. He has recently lost his job.
Offer: I offered him $2500.00, but it isn’t enough to pay the loan on the second home. I pretty much let my offer stand and provided my name and number if he changed his mind.
I’m pretty sure he won’t budge at my offer, but I know I could get it for $3500.00. I have about $2000.00 of my own money to use. I have considered a t/b’s down payment of $500.00 and finance the balance. Creatively, where can I get the other $1000.00?
…for all the wonderful and insightful information you have provided. Just to sum everything up that I didn’t clarify correctly in the previous postings. The mobile home for sale does not have a lien against it. The new mobile home purchased by the seller has a very small lien. The seller wants to put his money toward the new home’s lien. The park manager has okayed the transfer with the approval of purchaser condition. I’ve left it at my original offer of $2500, and I’ll check back in a few weeks if he doesn’t call before then, and gently remind him - just before lot rent on both homes are due. In the mean time, I’ll start searching other parks to gain knowledge and hopefully some contacts. Can’t wait until the Pony Express arrives with my Lonnie Books!!
Thank you for all of your patience and advice. I’ll keep you posted!
In your enthusiasm, I think that you are getting ahead of yourself. Wait until Lonnie’s books arrive. They will get there in a couple of days. These books are very inclusive and will provide you with an education reaped from years of experience.
I applaud your enthusiasm. Just remember that this is not the only deal around. The passage of time will only motivate the seller even more. He will quickly learn that other prospective buyers will not be able to purchase for cash. They will require him to finance, which from the sounds of it, is out of the question. With some info from Lonnie, you will be able to find ways to get investor funding to provide the home owner with cash, at a decent price, which will allow you to sell and finance at a fantastic yield.
Rather than trying to reinvent the wheel, wait for the books. Don’t worry about losing the deal. The knowledge that you will gain will more than compensate you if this deal goes by (which I do not think it will.) I read both books in one sitting. I read through the night and finished at 6 AM!!! You will have much better bargaining ground with the knowledge contained in these books. Lonnie will teach you everything from how to structure the deal to how to negotiate it. This info is too valuable to skip.
While waiting for the books to arrive, start looking at other homes but begin by speaking the park manager to ensure that the home can remain on the lot if you buy it and sell it while holding the financing. You will also be able to check on back lot rent that is due etc. These contacts will be what is most important too you. While waiting for the books you can cultivate a couple of parks to work in and already have a few homes lined up. You will also get a better feel for your market. This will help you in gauging what you should pay, and what you can sell for if you are willing to provide owner financing. You will also come across “handyman” type characters that you may want to later use to fix up homes (should you decide to go this route.)
I will be happy to email you the forms that I have created using Lonnie’s books as a guide. I do not have any forms for lease optioning however. Email me if you want what I can send. I am leaving in about 40 minutes to go look at another mobile home. At 7pm, I am meeting a seller to make an offer on a home I looked at this morning. I will check my email when I get back. Let me know if I can help.
I’m new too, but here’s something you could consider:
Put an option on the MH, then start marketing like crazy. I’ve heard of others here who had buyers before they even closed the original deal. That way you might not have to come out of your pocket with any money.
I know I can find a buyer, as the owner of the home has had more than a dozen calls this week asking if he could finance.
I have ordered Lonnie’s books, but they won’t make it here in time to help me with this deal. I know about the web site offering legal forms, but how do I know what forms and information I need:
To option
To buy
To sell/owner finance (best way for the seller.)
I’m going to absorb as much information as I can regarding optioning here on the board. I meet with the owner this afternoon. I want a really smooth transaction with the owner. With his mh repair experience, I may want to approach him for future repairs on other homes. Thanks.
Angelia:
I’m sure you’ve already checked with the park manager to make sure the mh can stay in the park and that the owner isn’t behind in space rent, but I didn’t see that mentioned in your post. Some parks won’t allow third party transactions, some will. What are comparable mh asking prices? What would a comparable apartment rent for? Since he’s had activity @$4,500, you should be able to easily get $5,000 with financing if you can pick it up for $2,500. Remember, you’re talking cash and most everybody else is talking “finance”, which he can’t do. Just my .02. Success to you!
Skip
PS If you haven’t ordered Lonnie’s books yet, do so. In the meantime, read all the Success Stories relating to MH’s and anything Lonnie has written here.
“I just can’t afford it.” “I just can’t afford it.” “I just can’t afford it.”
That’s what you should say to the MH seller about his price, and offer what is a good deal for YOU. Cash is king.
“But here’s what I CAN do…” and then offer your price and be patient. Don’t let someone else without the cash control you because you are eager to do your first deal. Find out how long he has on the purchase of his new home. There may come a point in time (that you want to wait for) that not getting this MH sold–at ANY price–may become a deal killer on the new home.
I say this because I once bought a car that was supposed to be a good deal because I was eager to get into SOME-thing. Every month when I sent in the payment I regretted it…
The lot rent is current and the park manager will allow a third party transaction without any problems. As far as comparables, I haven’t found that many. Most of the mobile homes I have found are fairly new and are getting around $250-400 a month. I feel positive that I could get a return like you mentioned if he accepts my initial offer. If he tries to negotiate my price, I’m not certain if I can go much higher to still make it worth my time and money. Apartment rents in the area run anywhere from 350 - 700. I did not notice one vacant lot in this park and the immediate neighbors have resided there 5+ years. Yes!! I have ordered my books, and await patiently.
Thank you for your help!!