Posted by Dave Swett on February 06, 2001 at 17:04:11:
Hi Debra, Obviously, I am missing 80% of the detail on your deal, but I think that you are ignoring the income from the two MH’s. In Maine, where I live during the summer, a MH on a lot rents for about $450 or so a month including the $100 or so lot rent. That is a gross of $900 less taxes and insurance, say $100 gives you $800 per month for the five years.
This kind of income will amortize a $37,000 loan. Doing the reverse, if I remember the numbers, you had a deal of $21,000 with $5k down or a loan of $16k at 10%. At $800, this loan will be totally amortized in 19 months–a year and a half. Borrow, bum or steal the $5K–go back and negotiate less, say $2K and borrow it on your credit card or Aunt Tillie.
You have two el cheapo trailers ala Scruggs techniques. I don’t understand why you want to move them out. You are buying them for almost nothing. Clean them up and sell them for $8-10K each. Two times $10k equals the cost of your whole deal. Use the proceeds of the trailers to pay off your owner finance and your project will be free and clear. The lot rent of $200 per month continues forever. What could be better?
My observation is that it is almost impossible to move the el cheapo trailers cuz they will fall apart. Also, tho I have not personally experienced, Scruggs says that the kind of people who buy the el cheapo eventually move on to another life experience cuz they are so unstable and can’t sell the el cheapo trailer. Then they come back to you and you forgive the debt, give them $500 to leave the place clean without trashing it and then you re-sell it for another $10K. Lonnie talks about this idea often in his books.
Good deal, but how do I do it? - Posted by Debra-SC
Posted by Debra-SC on January 26, 2001 at 19:20:19:
I found a 1-acre lot with 2 mhs (1984 and 1981) on it, owned by a woman who got married and moved 45 minutes away. Both mhs homes need work, but nothing horrible. The lot is just off 2 major streets. Going price for lot is $18K. Mobile homes - maybe $5K. This property was under contract with a realtor when I first saw it last year. Realtor showed it to us and said owners wanted $30K for the whole thing. Realtor has not shown the property, his sign fell down and stayed down for about 2 months. Owner’s husband happened to come by and saw it on the ground and decided to sell property themselves. Owner is tired of messing with it. They now want $21K !!! ($16K for the lot, $5K for both homes). I presented owner financing to them and they took the bait. BUT… they want $5K down (which I DON’T HAVE) and 10% on the balance. I can’t afford anything but the monthly payments and I was going to ask to start those in about 6 - 8 weeks until I get the homes fixed up and put some tenant/buyers in them and get some up-front cash as option money. How can I work this deal so the sellers are happy and I don’t have to spend my own (non-existent) $$? Would really appreciate some help.
Posted by Dave Swett on February 03, 2001 at 15:15:44:
Idea 1
If you have tied up the deal, try to sell the deal to someone at $25k and pocket the difference and just walk away with cash for a vacation.
Idea 2
Use your persuasion skills and find a money partner. They put up the money for 60% of the deal and you do the grunt work of fixup and selling for 40% of the deal (or whatever percentages that you can make work).
Also, to accomplish your other goal,divide the MH’s from the land. Just sell the MH’s as personal property and keep title of the land as real property. Then you end up as a mini-MH park renting out two trailer spaces forever. After the MH’s are paid off, the new MH owners still need to pay the lot rent forever.
I consider the idea of selling the trailers and then kicking them off your land as being unreasonable. If you want to buy a lawsuit in 5-10 years after the MH are paid off, you could try to evict the MH and force them to move or more reasonably negotiate a buy out so that you could junk them and start over again.
You would need to negotiate a release clause with the owner carry back finance so that you could release the MH and give title to the MH owners.
Re: Good deal, but how do I do it? - Posted by Ernest Tew
Posted by Ernest Tew on January 27, 2001 at 12:52:26:
If the owner is ready to get out and you are willing to do some work, there may be a way to acquire the property with little or no cash.
If you are willing to do the needed fix-up work and can get enough money to pay for any needed materials, you may be able to get the owner to agree to lease the property to you with an option to buy.
While doing the fix-up work, you could also start looking for a buyer. It could even be someone who is willing to do some of the work for a part of their down payment. It wouldn’t be necessary to exercise your option before “selling” under a Net Lease and Option plan. But, you must have the right to deliver title at any time the buyer decides to pay you off.
Oops, forgot about that, but… - Posted by Debra-SC
Posted by Debra-SC on January 29, 2001 at 12:38:37:
That will work for the 2 mhs, but I want to keep the lot that they are on and move the mhs out as soon as the buyers have finished paying for them (maybe even moving them for them) and move 2 more on the lot. This could continuously make $$ since land it at a premium around here unless you want to move 25 miles from the nearest Walmart. How could it netleast the mhs with sweat equity as down payment and keep the lot?