Posted by swwa on July 08, 2005 at 17:27:02:
,
How the heck did that happen? - Posted by Steve-WA
Posted by Steve-WA on July 08, 2005 at 13:24:34:
So here I am . . . I find myself with 7 MHs for sale: 3 in one park, 2 in another, and solos in two others. Currently my prime objective is cashflow. Let’s look at one set of numbers, and go from there:
Say I have 1500 into a place that should normally sell for 10K on pmts, but I may have to wait a few weeks to get that buyer. I’m considering selling for 4-5K - still great yield, and certainly buyers will be happy.
Another house is a 3/2 DW that should sell for 18-20K. I bought for 3K. For quicker sale, I am considering a lower price.
My dilemma: My statute of limitations for free lot rent is running out 8/1 - fact of life. If I sell cheaper to minimize holding costs, what about the next place I have for sale when I don’t have a lot of inventory, and I want to sell for higher market retail? Am I binding myself in to lower prices in a particular park, because I do it once (or three times in one case)?
I know buyers only really care about down & monthly, but couldn’t I promote a short payoff, and the overall cost discount as a selling point? Or just don’t go there? Perhaps just sell for lower down and lower monthly? - but that will force a lower overall price (cause they REALLY won’t like a 15 year term!), and attract more unqualified buyers.
Consistent demand, higher supply will lead to reduced price, and as my supply goes down, price will go back up. Makes sense, but I am sensitive to the “neighbor factor”.
I guess the bottom line question is: What are your opinions on “sales”?
Re: How the heck did that happen? - Posted by Mr. BIg
Posted by Mr. BIg on July 13, 2005 at 18:50:42:
Like any other business you try to sell for full price but if that doesn’t work at some point you have a sale and try again.
It may be terms, or price, or doll up the homes, whatever it takes.
Don’t feel bad about selling cheap. Brag about it. Get to be known as “the guy who always has great deals on mobile homes” “The guy who will go the extra mile to be sure you are satisfied” etc.
Perception is the Key - Posted by Jered (WA)
Posted by Jered (WA) on July 12, 2005 at 22:34:47:
You taught me this Steve when you stated that you say “you want how much for this ol’ Trailer” when talking to sellers but never let the T-word cross your lips when talking to buyers. To them, it’s a manufactured home.
Sell the homes.
If a previous buyer comes to you with a concern/complaint on the deal they got, I am sure you can spin it. Give the perception that there case was different - newer home, better condition, you were having a sale, etc. If they balk, offer to sell them a larger, nicer home on a new note. Then resell their home for the same you sold it to them orginally. Could you make money doing this? 
Perception. It is how we make money in this business.
Remember, there is no spoon…
Jered
P.S. Let us know how this works out.
cash flow is king - Posted by JD (IL)
Posted by JD (IL) on July 09, 2005 at 21:04:37:
Hey Steve!
I’ve had similar run ins myself lately, and had a similar conversation with Lonnie in St. Louis. The gyst of it was I’m getting back about 1/3 of my places that I sell before they’re paid off. So regardless of my sale (price), things change on 1/3 of them. So my strategy’s changed a bit to encourage cash flow velocity. How many can I move how fast. To do that I’m not necessarily lowering my price, but my terms are more flexible. Example is I just sold a place for $5950, cash would have been $5000. But I told them if they wanted to go on terms, I could do $500 down, $200 / month, 3 years, and they jumped on it.
Most of the other places I’ve sold have been in the $250/ month range, but that $50 made a big difference, and I’m still getting a decent return on it.
So, in talking around it in a long way, consider extending your terms and lowering your pmts. You won’t be paying lot rent.
Jody
P.S. I’m pretty jealous of all of you that have “no lot rent arrangements”. No luxury of that here, and it sure makes a difference on cash flow!
Re: How the heck did that happen? - Posted by Dan (MD)
Posted by Dan (MD) on July 09, 2005 at 19:50:18:
Steve,
I was facing this exact same problem about 5 months ago, I had 12 homes up for sale in the same park…I was looking at quite a bit of lot rent coming up (now they all weren’t due to start on the same day, but within 1-2 months of each other). But my objective in this business has been CASHFLOW, so I wasn’t willing to dump them for cheap and move on. But as you have seen in this business, the ebb and flow of sales is a reality, especially in July, July stinks nobody buys anything in the dead of summer. However, I would think that you should have EVERY home sold by the end of August, why? School is starting. I love August, usually one of my best months for sales. (right behind Feb for tax season). I personally would wait, but that’s just me.
In my situation, I got all of them sold but one. the one person who I let move in very VERY low down and VERY reasonable monthly payments ended up really screwing me, and he’s getting evicted this week. the homes that I sold for my usual price are performing nicely.
Dan
Re: How the heck did that happen? - Posted by Sailor
Posted by Sailor on July 09, 2005 at 17:15:42:
If your dilemma is that “statute of limitations for free lot rent is running out 8/1,” rather than selling out fast & low, I’d consider ways to alleviate the lot rent problem., Don’t know your situation, but I’d consider offering everything from homemade brownies to deferred rent to a piece of the action. At least make sure all your possibilities are explored before you take $$$ out of your pocket–
Tye
Re: How the heck did that happen? - Posted by Ray (MO)
Posted by Ray (MO) on July 09, 2005 at 16:51:58:
Dude…are you just sitting around thinking of problems. Sell the freaking houses and move on.
Sorry, I almost went into a rant. You’ve been helping a lot of folks on this site. What would you advise a newbie to do if they asked this same question?
Ray
Re: How the heck did that happen? - Posted by Anne_ND
Posted by Anne_ND on July 08, 2005 at 15:50:56:
Hi Steve,
I never am worried about what my other buyers paid, just what I paid. If they ever talk, and if they ever ask me about it I’m happy to tell them the truth, that it’s a matter of supply and demand- and I offer to notifiy them the next time I get a really nice house that I need to sell fast. Having a seasoned buyer when I’ve got one I want to move fast is a blessing.
have a good weekend,
Anne
Re: How the heck did that happen? - Posted by osupsycho (OK)
Posted by osupsycho (OK) on July 08, 2005 at 15:25:54:
Steve,
As you know I am still kinda new to all this but I do have quite a bit of experience in sales. So far I would say that mobiles correlate a lot with used car sales (and I have a lot of experience in this).
I would say that it should not matter if you “cheap” sell some homes and the neighbors talk about it. Just let the people you sell to know that you are having a “sale” (come up with a reason, maybe overstocked?) and that they are getting a one time bargain. First off I think that it could bring you future business from their referals (this happens in cars a lot) and secondly they will feel they are getting something special.
If you do get a referal from them just tell them that you aren’t having a sell right now but you can still help them out. Then sweeten the deal for them in a way that doesn’t hurt you much. It really shouldn’t matter as the price of the homes is so variable. They probably won’t have a clue anyway. The car market has a lot more knowlegdable buyers and they still don’t have a clue what a car “should” sell for. I had people all the time think they were getting a great deal and were not and then some that thought I was gouging them and they were robbing me (this more often than not).
Thats just my two cents worth.
OSUPSYCHO
Re: How the heck did that happen? - Posted by Mr. Big
Posted by Mr. Big on July 13, 2005 at 18:59:24:
Practise saying things like " That guy sure got a great deal" “I took a loss on that one” “I’ll let you have this one at your price, you can make it up to me on the next deal” “You are getting it for less than I have in it”.
It may not be easy to do with a straight face, when you are selling “at a loss” for $5000 @ 12.75% when you only have $1500 in it.
Re: How the heck did that happen? - Posted by Steve-WA
Posted by Steve-WA on July 08, 2005 at 15:41:43:
these too are my thoughts.
Psycho (if that is your real name), I was beginning to think that you stayed home from work on a Friday!
Re: How the heck did that happen? - Posted by osupsycho (OK)
Posted by osupsycho (OK) on July 08, 2005 at 16:14:42:
No I just had to do some real work today. I talked my boss into a “business” trip to visit some clients and am working out the details. In reality I just decided where I wanted to visit this fall and talked to some prospects about visiting them. I probably won’t have to work more than a couple hours a day (in addition to the drive time) and get the whole trip on the companies tab. I will probably even take my wife and only have to pay for her plane tickets. I will have to do some real work though, but it is my mini vacation for this year.
so when are you coming to WA? - Posted by Steve-WA
Posted by Steve-WA on July 08, 2005 at 16:44:30:
;-)3
Re: so when are you coming to WA? - Posted by osupsycho (OK)
Posted by osupsycho (OK) on July 08, 2005 at 16:49:07:
Unfortunately my territory is the Northeast. I will be visiting NH, MA, CT, RI, NY, and NJ. Basically Boston to NYC in a week. A coworker who has the northwest is visiting WA next month so maybe I can knock her off and take her place