Posted by Barry (Or) on September 14, 2005 at 24:30:51:
Philip thanks for catching my mistake. It was a typo and a very bad typo at that.
My statement should have been “Lonnie’s says to sell for at least 2x what you pay and charge 12.75%.” Thanks for correcting me.
Sorry for the confusion.
Is 29% “good enough?” - Posted by Barry (Or)
Posted by Barry (Or) on September 13, 2005 at 10:19:38:
I am thinking of providing financing for nicer Mhs.
Lonnie’s says to sell for at least what you pay and charge 12.75%. By my figures this results in about a 38.78% yield. I think that I have figured a way where I could provide financing that would result in a 29-30% yield on the nicer homes - and do a lot less work in the deal. It is still basically doing it Lonnie style but with a little tighter margin.
>>>I am wondering if 29% is a big enough margin for all of the things that can go wrong with this business.<<<
Anyone else being the bank on mobile homes for buyers where I would buy the nicer homes at prices that are higher than the traditional Lonnie deal? Is it working for you?
Is a 29% yield “good enough?” to me I think it is but I would appreciate getting other opinions.
Typo Correction - oops. - Posted by Barry (Or)
Posted by Barry (Or) on September 14, 2005 at 24:38:55:
It should have been, Lonnie’s says to sell for at least 2x what you pay and charge 12.75%.
It is really bad when I was trying to quote Lonnie and then said it completely wrong.
Many thanks to Philip for correcting me.
Barry.
Re: Is 29% “good enough?” - Posted by Hubert
Posted by Hubert on September 13, 2005 at 21:02:41:
If you insist on selling with a low or no margin (which I wouldn’t do - no margin means no play room on price) why not do like banks and brokers do and charge 4-6 pts financed in the loan at the 12.75% rate? I haven’t done this yet, but I don’t see why you couldn’t.
Has anyone done this? Is it legal?
Hubert
Sell for what you pay? - Posted by Philip
Posted by Philip on September 13, 2005 at 12:19:48:
That would make your yield 12.75% wouldn’t it?
The idea is worth looking into IF you sell with a margin on your buy vs. sell price.
Some here do a version of it.
I would like to know what you find.
Thanks,
Philip
Sell for what you pay? - Posted by Philip
Posted by Philip on September 13, 2005 at 12:18:14:
That would make your yield 12.75% wouldn’t it?
The idea is worth looking into IF you sell with a margin on your buy vs. sell price.
Some here do a version of it.
I would like to know what you find.
Thanks,
Philip
What about 25% - Posted by Barry (Or)
Posted by Barry (Or) on September 13, 2005 at 10:32:12:
With a tighter margin the volume of deals would go up. What about 25%?
Re: Is 29% “good enough?” - Posted by JOHN
Posted by JOHN on September 14, 2005 at 06:58:36:
I charge a 325.00 set-up fee and 25.00 title fee.
Re: Sell for what you pay? – NO. - Posted by Barry (Or)
Posted by Barry (Or) on September 13, 2005 at 19:00:51:
No I wouldn’t sell it for what I pay because that wouldn’t give a good enough yield.
More deals = More work - Posted by Keith (OH)
Posted by Keith (OH) on September 13, 2005 at 18:30:11:
Just an observation. In your first post you said you could do less WORK with a skinny margin deal. This post you said you could do more DEALS if you had skinny margins. Doesn’t doing more deals equal doing more work ? If you do 1 good deal with a resonable amount of work I would bet you that you would have less time involved than 3 or 4 of your skinny deals.
And probably a better return.
Keith
how about a bigger bottle of aspirin? - Posted by Marty (MO)
Posted by Marty (MO) on September 13, 2005 at 12:18:46:
doing a bunch of skinny deals would amount to a bunch of headaches, in my opinion. I’d much rather have a larger profit margin and less volume, if given a choice.
However, I do know a guy who does these deals and he seems to be carving out a niche for himself. He’s in an exclusive park and has put stellar buyers in place for the 3 deals he’s done. He’s using retirement funds to do the deals. None of his notes are more than a year old, so I can’t say how well this is going for him.
Someone on the board (John Merchant?) is setting up deals using investor money that may be an option… He just puts the deal together and manages the note for a fee, I think. This may be a way to buy newer homes and create longer term notes.
It seems like Conseco, Greenpoint, and Oakwood all tried your approach with financing newer homes with skinny yields and high volumes…
Keep me posted on how this works out for you-
Marty
Re: Sell for what you pay? – NO. - Posted by Philip
Posted by Philip on September 13, 2005 at 20:44:20:
“Lonnie’s says to sell for at least what you pay and charge 12.75%.”
That was the lead sentence in your original post, hence my answer.
But that is not what lonnie says.
You need a margin.(Which is what you said in answer to me…after I said the same thing in answer to you.)
So now I am confused.
Was it a typo in the first post?
Phililp