Interest rate determination for MHs - Posted by Supercar28


#1

Posted by Rob on December 31, 1998 at 20:03:07:

I keep hearing that the industry standard is 12.75%, but I think you can charge whatever you and the leasee agree on.


#2

Interest rate determination for MHs - Posted by Supercar28

Posted by Supercar28 on December 31, 1998 at 18:08:19:

I have been reading all of the greate advice from this site for the past two months. My interest right now is in mobile homes, I have since purchased the Deals on Wheels book, (have not recieved it yet). I have read all of Lonnie Scruggs articles from this site.

But, it sems to me that each time a deal is made whether it is a house or mobile ome, the interest rate for the leasee is 12 to 12.75%. How do you determine how much inerest to charge your Leasee? Do you have to charge whatever the current interest rate is for your state (I live in the state of colorado)?

I know that John Estell (in Denver) asked this question earlier, but he was aksing it for me.

Could someone enlighten me?

Thanks in advance

Supercar28


#3

Re: Interest rate determination for MHs - Posted by Robert McNeely

Posted by Robert McNeely on January 02, 1999 at 13:28:18:

Mark has it correct. Just sounded like a good number, If it is good enough for Lonnie, its good enough for me . In the deals I have done , the buyers have not questioned it. High enough to pay well but not raise objections.


#4

Lonnie’s Head - Posted by MarkHOUTX

Posted by MarkHOUTX on December 31, 1998 at 20:17:02:

12.75 is the “industry standard” for MH’s. That industry standard comes straight out of Lonnie Scrugg’s head. He just likes it b/c he doesn’t want to get into the “teens”, like thirteen, fourteen, etc. Staying out of the teens probably makes it easier for the buyers to swallow. Additionally, Lonnie more or less points out if you get dragged into court it might not get the Judge on your side if he sees you charging 17.5% on a used MH deal. He wants the interest he charges to be “reasonable” in case he ever is challenged, etc.