Posted by Philip on September 12, 2003 at 13:08:41:
from California echoes those sentiments.
Philip
Insurance lapse - Posted by Philip
Posted by Philip on September 11, 2003 at 13:38:24:
I don’t have any late payors yet, but I do have a kid who let his insurance lapse. I know I can evict and take the mh back, but I think starting the process will scare him into fixing the problem, and he is a good payor.
I used Lonnie’s form for the sale and it doesn’t specifically mention that he will have to pay for legal fees for starting the repossession…so how do I know he will? Same threat? You will lose your house if you dont? Even when it isn’t in there?
Philip
Tony will say “pinch me I’m dreaming” - Posted by Dr. Craig Whisler CA NV
Posted by Dr. Craig Whisler CA NV on September 11, 2003 at 14:46:44:
Insurance is usually pretty cheap. If he is a good payor you could consider not rocking your canoe by hasseling him. Just pay the insurance and add the cost onto the end of his loan. You should be getting 12% or more in interest anyway. Better yet when he pays again, first deduct the ins. costs then tell him how much MORE he STILL owes on that month’s payment. He will get the point. You should have permission to do this worded into your contract with him, if not add it now, for your future deals.
Regards, doc
Re: Tony will say - Posted by Phiilp
Posted by Phiilp on September 11, 2003 at 15:56:56:
Does Tony like those “extra charges”? Or does he have some bad payors? What thing would he pinch himself over?
That is not in my contract. Can I still do it? Do I have the right? Or should I threaten to reposses, and then, being the nice guy I am, just add the insurance to the loan?
Philip
Once upon a time, long long ago… - Posted by Dr. Craig Whisler CA NV
Posted by Dr. Craig Whisler CA NV on September 11, 2003 at 17:11:05:
… I stated that I felt that it was hardly worth insuring old slummobiles for fire. Liability insurance is always de riguer of course. I said that I found it more profitable to self-insure for fire on junkers. Tony took exception to my ideas on self-insurance and we went round 'n round, where we landed noone knows. When you buy casulty insurance, a part of your payment money goes to the salesperson’s commission, a part goes to the insurance company for profit, part goes to pay for their big office building and 10,000 employees dental plans and another small part goes into a general fund that is invested at about 4% interest. It is that fund that they use to draw on when you have a claim that they must pay. I feel that if I can invest money at 100%-200% per year, that it is wiser and SAFER, to self-insure for fire than to let some insurance company invest about 1/4 of my payment at 4% interest, to insure me against fire in a mobile home that was free or nearly so in the first place. Well Tony really lit into me about that. He thought it was crazy to not insure for fire. Probably still does. I claimed he had insurance-itis. Different strokes for diferent folks. Twenty lashes with a wet noodle for Tony. Its all about math and money. I still think I will be better off investing my money at 100% than letting the insurance company do it at for me about 1% per year. Sorry if you don’t like my math but I can earn 100 times more than the insurance can, and so can everyone else. I don’t want to ruffle feathers on the old coot :~) so I’ll be more tactful this time.
If it ain’t in your contract your contract needs improving even if it did come tumbling down off the mountain engraved on stone tablets, from Lonnie. Everyone should read the fine print in all of their contracts and tweak them every time they have a problem that is not covered so that next time it will be. This is a case where it is useful to close the barn door even after the horse has gotten out.
If it isn’t in your contract you don’t have the right to do it. I don’t threaten people who pay me money regularily, especially if I am making 150% profit off off them already. I kiss and hug them (and their money) instead.
If it isn’t in your contract, you’ll just have to use my remedy for when I 've done something foolish. I just smile a lot to confuse people. If the guy is paying well, I would leave well enough alone, even if you lose two bits off every $200 of profit. So what?
Just as long as you are getting a regular supply of Big Macs, the world is fine.
Regards, doc
Poor man, Rich man - Posted by Philip
Posted by Philip on September 11, 2003 at 18:02:02:
That is very, very interesting, and I do like the idea of not padding an insurance company…
I laughed out loud about you kissing and hugging the people who pay you money!
It aint in my contract, so I will have to get it put there…dang it…
One more thing. It is kind of about math. And risk.
I hold the note on 4 mobile homes. If this one blows away in a Missouri tornado, one fourth of my collateral is gone. Dozens around the area blew away a few months ago.
I don’t have the lee-way to lose 1/4 like say…someone who holds about a zillion notes…not mentioning any names but his initials would be Doc Craig Whisler.
I don’t know if you drink when you write, but you are a funny, funny man! Once again, you should write a book!
Philip
The Protection is FREE - Posted by Tony-VA/NC
Posted by Tony-VA/NC on September 11, 2003 at 17:49:52:
The irony remains in this series of insurance posts between Doc and I.
Doc has stated here that he prefers to put his money into investments that return him 100% or better (who doensn’t) instead of the 4% an insurance investment makes.
The odd part for me is this. If the BUYER is required to pay the insurance, NOT ME, and my company is named as the loss payee, where have I lost money? That sounds more like an infinite yield, not 4% or even a measly $100%…INFINITE!
If the home burns down…there goes Doc’s 100% money making machine.
Having the insurance cover the loss of the home costs you NOTHING but protects your investment.
Even if Doc should choose to save his buyers money each month by not requiring them to pay the insurance (though it appears he agrees it is wise) and instead is willing to “self-insure” the loss of his money making machine, then that it his choice. Maybe he can afford to shell out $1,500 to have the burned out shell removed, pay another $1,500 bucks to move a “free home” back onto the lot, then pay another $1,500 for steps, skirting, and untilty hookups.
Seems to me that Doc is willing to PAY about $4,500 out of pocket just to return to the same money making machine he had before. This is a total loss of one deal just to replace one. All because he does not believe he should pay insurance. He’s right. HE shouldn’t, but the BUYER should.
If you follow the investment train of thought, instead of worrying about Doc’s insurance company making 4%, we could see the reality that we are getting this protection for FREE.
Respectfully,
Tony
Re: Poor man, Rich man - Posted by Dr. Craig Whisler CA NV
Posted by Dr. Craig Whisler CA NV on September 11, 2003 at 19:15:39:
Philip if you have a lot of tornados, hurricanes etc, in your area, how high are your insurance premiums? Anyway, Tony won the debate, when he mentioned that the buyer is the one who pays for insurance not the seller. If it is FREE to you, you’d be crazy not to go for it.
Actually I don’t drink very much. A six-pac is supposed to last for 6 months isn’t it? I am quite thrifty, but please do not call me cheap, even if my home IS furnished in early American Junk. I can usually make a six-pac last for a year if I hide it well enough. But then with my memory the only problem is remembering where I hid it. I discovered a hidden six-pac of Carter beer, under the back seat of my old Packard, just this last season. Say, is aging good for beer too?.
Regards, doc
What is a guy to do? - Posted by Philip
Posted by Philip on September 11, 2003 at 18:08:29:
All this expert advice!
Your’s is crystal clear, but Doc’s is funnier.
I respect both of your opinions and appreciate them very much.
I also enjoy the entertainment.
I think I will coin the phrase “investainment”!
Somehow I have got to get insurance and I don’t plan on paying for it.
This kid is in about 3k on a 11,400 original purchase.
One would think he would hate to lose his home now.
And he IS a nice kid and an EXCELLENT payor.
Such a shame.
I am glad anytime you have input and I think your logic is sound…if I could stop laughing at Doc’s writing style long enough to think about it!
Thank you very much,
Philip
LOL - Posted by Philip
Posted by Philip on September 11, 2003 at 20:07:39:
LOL,…and even your Packard is an investment! Just like the 55 Hudson I sold for my dad…minus the Carter’s beer!
Tony is right but I’ll never admit it. - Posted by Dr. Craig Whisler CA NV
Posted by Dr. Craig Whisler CA NV on September 11, 2003 at 19:45:40:
If the buyer pays for it, by all means make him buy a $50k policy and hope you get “lucky” :~)
I suppose I was looking at the situation thru my own point of view. I don’t do Lonnie deals. I rent my mobile homes on my own land, rather than sell them in parks, except for the free slummobiles. Under these circumstances I would be the one to pay for the fire insurance and I believe self-insurance is wisest and safest in the long run for me.
Some people are just natural gamblers, speculators and risk takers. I am such an individual. I sleep well at night. It you are less risk tolerant or would lose sleep over it then pile on more insurance securtiy blankets.
An entrepreneur doesn’t say make me more secure, he says make me more money.
I can CONTROL many of the fire risk factors such as by keeping dry grass cut, using smoke detectors, renting to mostly non-smokers, and non-drinkers and non-tweakers, having a large fire extinguisher present in my rentals, and installing extra smoke detectors and by checking the batteries periodically.
Incidentally, when I test smoke detector batteries (twice as often as recommended) I ALWAYS have the tenant present and require them to sign a statement atesting to the successful test. I keep these on file so that in the event of a fire, they can’t say I neglected to keep the smoke detectors in good working order. An once of prevention being worth a pound of cure.
In Ca we only have earthquakes and then rarely does one destroy a mobile home. They may fall down and roll over a few times but my mobiles are so old and rough that you usually can’t tell which ones have been rolled and which haven’t, so whats the difference?
I suppose this is one friendly debate that will never be settled.
A man convinced against his will, is of the same opinion still.
Regards, doc
Re: Tony is right but I’ll never admit it. - Posted by Tony-VA/NC
Posted by Tony-VA/NC on September 11, 2003 at 21:51:12:
Craig is correct that this is a friendly matter of differing opinion.
As he discovered, his advice was given from a position other than that of the person asking the question.
This board in a large majority, has people posting questions in regards to Lonnie type investments. Many are new investors with little room for un-necessary risk. I believe that when we give advice, we need to consider the audience that we are addressing. Our responses should be tempered to their situation, not ours.
I too rent mobiles on land. As for Craig’s decision to self-insure his rental units, it is one that he appears confident he can withstand.
I would question only the reality that it takes only one fire and loss of life (or injury) to ruin that self-insurance model. This has happened to one of our own here and I assure you, that investor would not have chosen self-insurance on a rental, nor are they likely to do so in the future.
Rentals are quite often the subject of civil action. Most are frivolous but sometimes a reasonable insurance policy is what we need. But it is up to the individual investor to make this decision and as such, Craig is well within his rights to do so. He is not “incorrect.”
For the new investor, such a decision may be more pocket book related than a matter of true risk vs. reward assesment. Don’t gamble. Take calculated risks. What Craig’s post says to me is that he has done the assessment and has calculated his risk. I also recall from previous posts that Craig sets aside Cash to solve problems of this nature when they occur. That is “self-insurance.” He is not ignoring the possiblity or the risk. He is in fact preparing for it in his own manner. New investors may forget such an important point.
I am not pro-insurance. I agree in many regards with Craig’s assessment of how our insurance premiums are spent. Insurance should be a calculated risk. Without calculating, we are quite likely to over insure (at least pay too much) or under-insure (what we cannot afford to lose).
You cannot insure against every possibility. Some personal risk must be assumed in life. Conversly, sticking one’s head in the sand is a good way to expose your assets instead of assuming responsibilty.
Tony
Re: Tony is right but I’ll never admit it. - Posted by Philip
Posted by Philip on September 11, 2003 at 20:16:58:
Well, I will agree with your last line…but in your title you allready admitted Tony was right…so I know you are just playin’.
About that really old beer…I think you might want to avoid it.
My dad tried to make hooch in our basement(we ARE from the Ozarks)and it nearly killed him because it “aged” too long. Grandpa would turn over in his grave if he knew his son and grandson can’t even make a little berry “wine”.
Shortly after that dad gave up drinking(really).
Thanks for the many laughs…I love the “roll over a few times, but you can’t tell them from the others” stuff! I laughed out loud and even told my kids and they laughed.
I also enjoyed your comment in another post about having a large nose because air was free. My otherwise surly 15 year old son even laughed about that one!
Write a investment/humor book!
Philip
We seem to now be in total agreement… - Posted by Dr. Craig Whisler CA NV
Posted by Dr. Craig Whisler CA NV on September 11, 2003 at 22:44:00:
…though it took us about 18 months to come full circle, and get everything qualified and clarified. I also neglected to consider that in other (lesser :~)) parts of the country many different casuality hazards are prevalent, as well as that most new investors are following the Lonnie M.O. rather than buying mobiles on private land to hold for rental income and appreciation, as I do.
Thank you Tony, for bring that to my attention.
Gee, will wonders never cease? Look at me, being cordial for a change. Yikes, I gotta be careful not to ruin my reputation. :~)
Regards, doc
Philip we have a misunderstanding - Posted by Dr. Craig Whisler CA NV
Posted by Dr. Craig Whisler CA NV on September 11, 2003 at 20:35:10:
I think Tony is right only as to Lonnie deals and other flippers. Tony has convinced me he was right all along for these kinds of deals.
I still feel that in the west it is much wiser to self-insure for fire on the oldies but goodies, and I still have some charcoal to prove it! :~)
Like I said its just a friendly debate. Each of us can use his own judgment to pick and choose and take from this board those ideas that they feel will benefit them most. I’m happy when some folks agree with me. I pray for the rest of 'um.
Regards, doc
Re: We seem to now be in total agreement… - Posted by Tony-VA/NC
Posted by Tony-VA/NC on September 12, 2003 at 09:46:55:
Many times I have lengthy conversations with other investors in our arena. At the end of the conversation we typically find that we were both saying the same thing, only differently.
I liken it to two people climbing a mountain from different sides. On the way up, they each see different things but when the summit, they both have attained the same outcome.
Had we been in conversation Craig, it would no doubt have proven interesting, and the climb to the same conclusion would have taken far less time.
Tony
Re: We seem to now be in total agreement… - Posted by Philip
Posted by Philip on September 12, 2003 at 08:16:10:
I have one deal on land and 3 in parks just FYI.
Lesser? Lesser parts of the country? You must mean San Francisco with it’s “diverse” population, or Detroit area with “a murder a day keeps the doctor away”…but really keeps the coroner busy.
Surely you don’t mean places like southern Misouri?
Where God did the landscaping and, only now, is there an influx of Californios crowding up our little corner of heaven! 
Majority rules. California Rules! - Posted by Dr. Craig Whisler CA NV
Posted by Dr. Craig Whisler CA NV on September 12, 2003 at 09:58:52:
Besides some folks could get lost in a
broom closet. :~)
Who will be Gov. and their view on mh’s?nt - Posted by Philip
Posted by Philip on September 12, 2003 at 11:13:15:
n
Re: Who will be Gov. and their view on mh’s?nt - Posted by Dr. Craig Whisler CA NV
Posted by Dr. Craig Whisler CA NV on September 12, 2003 at 12:41:23:
Bustamonte, and ‘trailers’ are for poor white trash.