Help!! Don't know what to do from here! - Posted by Tony

Posted by Tony on January 07, 2001 at 14:47:30:

Thanks so much for all your help. I am very concerned about credibility. I try very hard to make everything I say, count. I realize that reputation is everything. I’ve been in another business for years and have kept my reputation stainless. However, I hope I’m allowed one mistake that won’t haunt me. I really appreciate everything, but I do think I will have to back up on this one and take everything at a more reasonable pace.I will try to keep the door open on this one but I have yet alot to learn. I think I’ll do my homework first.
Thanks and any advice from you is always appreciated.

Help!! Don’t know what to do from here! - Posted by Tony

Posted by Tony on January 07, 2001 at 01:06:13:

I need some advice! After reading this forum for a couple of weeks, I got so excited, I went out and bought a MH. I don’t know how to close the deal. The owner says she has a clear title but do I need to check it and how? Also, do I need to use an attorney to close. It’s a cash deal and I don’t have any type of form(s) and don’t know what kind I need. I feel like I got a good deal and really didn’t expect her to take my offer. I have full intentions of getting Lonnie’s books but don’t have time on this one. I need help, big time!! Please someone, walk me through this one. Tell me what I need and where to go to get it.
Kinda scared,can you tell?

Re: Help!! Don’t know what to do from here! - Posted by anthony

Posted by anthony on January 10, 2001 at 20:57:24:

This is still a good deal if you can sell on terms and make a substantial profit. It is true that you could possibly do better deals and make a higher yeild but if you have a good amount of capital to do multiple deals this may not be bad. You could place an add such as “owner will finance” and describe your MH and Your phone will ring off the hook and you can negotiate terms and see if you think the deal is “good enough” Best of luck, Anthony

Stop! - Posted by Tony-VA

Posted by Tony-VA on January 07, 2001 at 09:46:16:

Tony, I had to take a few moments to calm down before responding to this post. My frustration and concern is only for your well being in this deal.

Your excitement is commendable. It is good that you are so enthusiastic. But I caution you to use it wisely. Enthusiasm is a product of emotion. Emotion is a poor business advisor. Misplaced enthusiasm can lead to business decisions based upon emotion and not facts and numbers.

You believe you have found a great deal, yet admit you do not have experience in mobile homes, nor have you saught education from Lonnie’s (or other) books/courses. How do you know that this is a good deal? What is your base of comparison?

Questions that immediately jump out are:

Is this in a park?

Can it remain in the park?

How much back lot rent is owed?

Why is the owner selling?

What is their motivation level?

How much can you sell this home for?

What are the lot rents?

How long do you anticipate your holding time to be?

How much have you estimated holding costs to be?

How can you protect your interest if you don’t know how to document the transaction in your state?

How did you perform your “due diligence” if you are unaware of what can hurt you in these deals?

These questions and many more screamed at me when I read your post.

Please understand that my post is an attempt to point out the possible harm that this deal could present to you. It is not my intention to rain on your parade.

I believe that in your previous posts, you mentioned you have invested in real estate. Let me ask you this. Would you have invested in a Single Family Home based upon the information you gained from a few paragraphs from posts made by people all over the country?

I hope you are able to retain, and contain, your enthusiasm. Apply it in a directed, educated manner and you will be successful. Leave little to chance. Make your money going into the deal. And as Terry reminds us, “Always reduce your exposure, both legally and financially.”

Best Wishes For Your Success,


Re: Help!! Don’t know what to do from here! - Posted by Rainy

Posted by Rainy on January 07, 2001 at 02:38:29:

Tony… Calm Down :slight_smile:
Did you buy this home already? Did you put out money on this home?
The owner of this home should have a current registration. Ask to see the current registration before you buy this home. This will show if there are any lien holders, if the taxes have been paid and are up to date. Also, it will show the name of the registered owner. Check I.D.
AND… Ask to see the Title.
What about a Purchase Agreement ? A Bill of Sale?
The big scam on mobile homes is the back taxes owed and back space rent and utilities owed. The Park Manager will be able to tell you if there is back space rent and utilities owed.
What State do you live in ?
Talk to the Dept of Housing and they can walk you through the transaction.
Be careful, you can get burned. Don’t jump so fast!
Did you look the home over? Do you know how much that home is actually worth? Be sneaky and get a mobile home sales agent to run comps on the home and on the park. :slight_smile: And dont forget… suck up to the PM :slight_smile:
if it is an older home, the park may require the home to be pulled out of the park upon the sale to a 3rd party. So you better start with the Manager before you do anything. The Dept of Housing will have all the forms you need.Good Luck!

Re: Help!! Don’t know what to do from here! - Posted by Tony

Posted by Tony on January 10, 2001 at 22:57:16:

Thanks for the response. I still haven’t said yay or nay. Tony VA helped me out and made alot of sense, get my education FIRST and THEN do Lonnie deals. Rainy also was alot of help. That was my first offer ever. I don’t know if it was fear or what but I realized I didn’t know what I needed to know to deal. I’m waiting on Lonnie’s books to arrive.
What concerned me about that deal was the amount I would have in it after repairs. It was pretty nice. 14x70 2/2, c h/a, with appliances, 87 model, but it would have taken me 2 years WITH a down payment just to get my money back. I couldn’t stand that. I hope that’s not the norm. Anyway, thanks for the help.
Good luck,
p.s. The people here are great! Thanks everybody!

Re: Stop! - Posted by Tony

Posted by Tony on January 07, 2001 at 11:11:09:

Thanks so much for your concern.I think Maybe I put the cart before the horse but so far I haven’t put out any money.In response to your questions…

I have no base for comparison. This is my first deal. The MH was priced at 8K. It is a nice one with a few repairs needed. I estimate repairs at 1k if I do them myself.(I’m handy in those areas).I offered 5k.I’ve already spoken to the PM and she informed me that the owner was current on her lot rent(110 per) and her property taxes were current. I told the PM that I wanted to resell the MH and was told that it was o.k. as long as my buyer met with their requirements(credit check etc.)
The owner was somewhat motivated as she had already bought a house and the MH is empty. I don’t know exactly what the MH would bring( I think 10k to 12k with a little work but I have nothing to base this on).
As far as “due diligence”? I don’t know what that means. I also don’t know how to calculate my holding time, nor costs.
Tony, I appreciate your questions and concern and am about to ask you( in your opinion) a very important question. Should I pass on this deal until I have the knowledge needed in Mh’s? Nothing has been done except an offer made and accepted. The PM says its o.k. either way with her. Waiting to hear from you.
Thank you,Tony

Re: Help!! Don’t know what to do from here! - Posted by Tony

Posted by Tony on January 07, 2001 at 11:42:00:

I haven’t put any money out yet, thankfully. I realized when the owner took my offer that I had jumped too soon.
I’ve already talked to the PM and checked the lot rent and taxes, it is current.I didn’t check the utilities. Will the PM know about the utilities? I’m in TN.
As far as a bill sale or purchase agreement, I don’t have anything. Everything has been verbal at this point. I’ve looked at the MH about 3 times and feel comfortable with the repairs needed, but I still have no way to determine the actual value of the home. I guess I’m just guessing. If I need to back out of this one and educate myself a little more, I am comfortable with that. Your opinion is appreciated. Any more thoughts?
Thank you, Tony

Re: Stop! - Posted by Tony-VA

Posted by Tony-VA on January 07, 2001 at 11:37:02:

Firs let me say that I admire your ability to take constructive criticism. This will be a great benefit to your investment career.

You have asked the PM many of the right questions and made steps in the right direction. This is good.

I don’t know your area but I would hazard a guess that an older mobile home can be bought for less (perhaps closer to 1/2 that price), especially if the current owner is paying lot rent on it.

Please read Lonnie’s books, since it appears you are going about it similar to his route. (Ernest’s material is also very good).

Lonnie will show you how to negotiate these deals and obtain incredibly low purchase prices, without ever saying a number (making that offer). He has adapted Roger Dawson’s negotiating material (Roger’s material is in my opion, outstanding and presented in a very user friendly manner), to the mobile home business. He gives you the techniques he has found to work. I stick very closely to his material and have had success with them.

You will be able to read his book in a very short time to at least give you good footing on this deal. This deal may not be a bad deal, but it may also not be a great deal. Either way, if you hold off to get the education first, you will not miss out. There will be other deals. I am willing to bet that a mistake made on this deal would cost more than the lost opportunity.

If you are adament about this deal, I suggest that you try an “option” approach. Using a small option consideration you may be able to tie the home up for say 60 days at the agreed upon price. You would only exercise the option if you locate a buyer with terms that make it worth your while. During the option period, the current seller would be responsible for the lot rent etc.

One note. A mistake I made and I believe others make.

We read Lonnie’s book and can’t believe he pays so little for mobile homes. We automatically believe that he must live in an area that has lower costs of living and demand for housing. BAD Mistake!

I initially figured that in my area I would have to pay atleast $5,000 for a used mobile home. I went out with that thought in mind and paid just about that.

I then began utilizing the negotiating techniques Lonnie teaches and found that I paid more than twice what I should have for that home. The money is defn in the negotiating. Is is amazing the amount of money a few words spoken at the right time can make you.


Re: Stop! - Posted by Tony

Posted by Tony on January 07, 2001 at 11:53:15:

I love constructive criticism. It’s the best way to learn the things I need to know.
Question: Would it make more sense to back out of this deal (AT THIS STAGE), knowing how uncomfortable I am and educate myself. I kinda feel like I’m going into a gunfight empty-handed. I know there will be more deals. This MH might be a better deal if I waited to learn more about this business. Who knows, this might motivate the seller even more if I call back and pass. Would that be a terrible thing to do? Your honest opinion(putting yourself in my shoes). I trust your opinion.
Thanks, Tony

Re: Stop! - Posted by Tony-VA

Posted by Tony-VA on January 07, 2001 at 14:22:11:

As for backing out of this deal. I would imagine that since your agreement was only verbal, it is not legally enforeable but it may cost you some credibility.

That is why is so important to get your buiness/investing started of on solid footing. This business is based upon people so credibility is very important.

What you may have to do is call the woman back and say that after discussing the deal with your partner, you have decided you will have to pass. Let her know that you are interested in the home but that your partner has some concerns.

Mention things like :

Since she has not been able to sell it at her asking price of $8k and you have offered $5k, you may have to pay several months lot rent, electric (don’t know where you live and if it is cold or not), heat, worry about vandalism etc., place insurance on the home and still try and sell for a profit.


Explain to her that you and your partner (this could be your wife, mom, friend, cat, dog, whatever, it doens’t matter and she doesn’t need to know, it is just your partner), will be looking at several homes in the area and since this is a slow time of year for home sales (her experience will confirm this) that you have to make sure you buy the home at a safe price. Give her your number and ask her to call if things change and she can do better on the price. If she asks how much, ask “If we payed all cash today, what would be your best cash price?”

Then don’t say anything. First one to name a number loses.

If she offers a lower price, explain that you will need to discuss it with your partner and that you will call her next week after you two have looked at the other homes.

Order Lonnie’s books right NOW. Don’t let other opportunities pass. They will take some time to arrive in the mail. Don’t wait!