Re: PFA - Posted by Lonnie
Posted by Lonnie on January 01, 1999 at 08:26:38:
My interest rate (12.75% was a PFA (plucked from the air) number that I used when I first started selling MH?s. I didn?t want to quote numbers in the teens because I felt that just sounded so ugly. So over the years 12.75% has become the “industry standard” on used MH notes.
But keep in mind, most of the people that buy the type homes we sell are only concerned with two things…“How much down? How much a month?” Some of my buyers don?t even ask what the interest is, or how many payments there will be. For instance, I showed a home yesterday (yeah, New Year?s eve) and the couple that wants to buy it still hasn?t asked what interest rate I?m charging. After telling me that they could pay $1,000 down and $350 monthly, they asked “about” how long would it take to pay the loan off.
Remember, you make your profit when you buy and you get paid when you sell. If you buy right, you can take back a note with zero interest and still make a good profit and yield. In fact, if your profit and yield is determined by the interest rate you charge, you?re paying too much for the home. Hope this helps.
Best wishes for a great?99,