Posted by Blane (MI) on January 07, 2001 at 21:51:58:
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Latest Deal (Long) - Posted by Karl (OH)
Posted by Karl (OH) on January 07, 2001 at 20:58:14:
I didn?t feel like doing paperwork or watching the X-Files tonight, so I thought I would post my latest deal. Yet another deal that came together with the invaluable help of my park manager.
The on-site maintenance man of a park has been doing a lot of work for me on the side. He tears down and sets up the homes I move, and he?s done a little rehab work for me. He was looking for a winter project trailer to rehab. But he didn?t want to have to mess around with the buying and selling of the home, he just wanted to do some rehab work and make some extra money. So we agreed to do a deal together.
We both knew of a recent bank repo, an ?86 Oakwood 2br in bad shape. The bank owed $700 lot rent, and back taxes of about $100. We figured we could get it pretty cheap. So I called the bank and told them I would take care of the lot rent and taxes if they gave me the trailer. Surprisingly, they agreed. The PM said he would knock off half of the back rent if we got the home, and free lot rent while we worked on it.
Our partnership agreement was that I would negotiate with the bank, do all the paperwork and titlework, and find a buyer when the home was finished. He would do all the rehab. We?d split the expenses and the profits. Our plan was to cash out with a conventional loan buyer. We planned on spending a couple thousand on fix up, and were hoping to sell for around $10k.
No sooner had we cleaned out the trailer and installed a new front door, we had a buyer. A guy stopped into the park office looking for a cheap home, and they had him call me. He already lived in the park, but had just split with his wife, and was staying with a friend. He wanted something a soon as possible. So a week ago I showed him the rehab. But he wouldn?t ever qualify for a bank loan. So I told him I would sell it for $7500 on a note if he could put down $2000. I would give my partner the downpayment, and I would keep the note. This sounded good to my partner, he was going to make $2k for installing a door.
Today I met with the buyer. He was only able to scrape together $1500. And he needs about $500 for the park deposit and lot rent. So he only has $1000. I told him I would accept $1000 down, but I would have to add $1000 to the purchase price. He was thrilled will my flexibility. We?re closing on the home tomorrow night. He and his buddy are going to start doing floor repair right after we close, so he can move in by the end of the week.
I?ll still give my partner $2k cash to pay him off. The $1k I kick in gives me $2k more on the note. I?ll create a note for $7500, $250 a month for 36 months, with about $1400 invested into the deal. That’s a 215% yield!
Anyway, I just felt like posting something tonight. And Tony VA has already answered all the fun questions.
Karl Kleiner
Re: Latest Deal (Long) - Posted by lonnie
Posted by lonnie on January 08, 2001 at 11:36:55:
Hi Karl,
Way to go! Isn’t it great to be able to create your own little “money machines”?
Best wishes,
Lonnie
Re: Latest Deal (Long) - Posted by anthony
Posted by anthony on January 08, 2001 at 05:46:03:
Great job!
After our dinner the other night I am learning the importance of a relationship with a PM. This is a much cleaner easier proocess than with indidual land owners where I have to prove myself each time. Thank you for all of your valuable info, Anthony