Latest deal - Posted by Karl (OH)

Real Estate Investing Mobile Homes & Mobile Home Parks
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Posted by JHyre in Ohio on October 26, 2000 at 10:13:04:

The great State of Ohio, in its Solomnic Wisdom, has decreed that trick or treating shall occur from 1830 to 2000 hours Thursday October 27, 2000. Daddy’s Little Treasure (My daughter came up with that on her own, the little rascal) would be deeply disappointed if Daddy did not accompany her, so I’ll be taking the 6am flight out of Toledo tomorrow morning. This means you’ll have to drink my beer tonight. Don’t worry, I’ll drink yours tomorrow!

Hyre

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Latest deal - Posted by Karl (OH)

Posted by Karl (OH) on October 26, 2000 at 08:58:54:

Here’s an interesting deal I started last night.

An older women called me a couple months ago about buying her home. She has a 1981 14X70 3 bedroom, newer floors and carpet, newer appliances, new water heater, nice porch and awning, good condition, just needs a little paint and a power wash. She was waiting for a spot to open up in an assisted living community. She was asking $8k. I can sell 3 bedrooms instantly in my park, I have several buyers waiting, so I told her to call me when she was ready.

Yesterday she calls and says she’s moving next week. Now her price is $7k. So I stopped by last night and chatted with her for awhile. She doesn’t really need the money, just doesn’t want to get stuck with lot rent next month if she doesn’t have to. So she’s not really a motivated seller yet. But the park manager told her that her best bet was to sell her home to me, I was honest and could be trusted (a rare trait in my local market). So she had decided she was going to work something out with me even before I got there. A MH realtor had called her earlier in the day, she told him she already had a buyer.

So I made her two offers. One was $4k cash on the spot. The second was $6k at $200 a month for 30 months no interest. She took the $6k. We signed a purchase agreement and I gave her $100 deposit, we’ll close next week after she moves out.

I know how crucial it is to negotiate the very best price possible, and I usually wait out a seller for awhile to get their price down. I probably could have knocked a couple more grand off her price with a little time and more negotiation. But I enjoy it when I can give someone a price close to what they’re asking, if I’m going to make a nice profit. (I just don’t have that killer instinct!) But I also think its good for my reputation in this park. No doubt this woman will tell her friends and neighbors that I gave her a good deal. She was happy with my price.

NADA value on this home is about $10.7k. I’ll either sell it on a note for around $11k or $12k, or cash out through my broker for no less that $10k.

Now the question is do I lease/option the home from her, or put the home in my name and give her a note? If I don’t resell for cash, do I lease/option to my buyer, or sell it to them on a note? I guess that will be one of my questions at the workshop this weekend.

Karl Kleiner

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title or L/O - Posted by djswett

Posted by djswett on November 02, 2000 at 23:56:52:

By now, your deal is done. Could you post how you handled the MH purchase?

My personal experience has been that I love working with paper cuz down the line after I have built up a bit of a good track record with the payee (checks always 3-5 days earlier than due date), I make an offer to them–how about one year payments in advance for a 10%-15%-20% discount. I often enclose a little note (especially right now with Xmas coming up) suggesting that I have just acquired a bunch of money and might be willing to pay the note off for a discount–would you be interested?

If the lady will trust you, I would get the title in my name and give her my personal IOU for the $6k. Then when I do my next sale, I will be able to get my name on the title as a lien holder and the elderly lady will never be mentioned in any court hearing if you have to do a repo. She continues to get her monthly check from you and you are fighting the alligators with BK, non-pays, etc.

Again, please post the action that you took.

DJ

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Re: Latest deal - Posted by Carey_PA

Posted by Carey_PA on October 29, 2000 at 18:26:25:

Karl,

That was an excellent deal you just spoke of and I completely understand your philosophy with giving the lady ALMOST what she was asking for because you knew you’d make a profit anyway. Here is my question and it’s a relatively simple one: How do you do the title work when you are paying her on a note and then I’m assuming you’ll have someone else paying you on a note, right? Well actually could you explain it if it would take place like that, because more than likely that’s how it would work in my situation.

Thanks,

CAREY

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Small World… - Posted by JHyre in Ohio

Posted by JHyre in Ohio on October 26, 2000 at 09:10:51:

I’m working on a similar deal. 1987 3BR2bath, haven’t yet seen it, allegedly in good shape. I’ll take over payments on $7000 remaining balence via L/O. I generally dislike L/O for MH’s- I want title OUT of my name when I sell. Hopefully I’ll find a cash buyer & exercise the option instead of L/Oing to someone else…though the latter option still puts money in my pocket. In your shoes, I’d get title, so I could transfer title to a note buyer instead L/Oing to said non-cash buyer. In my view, I have more liability as a lessor (the terms of the lease agreement notwithstanding) than as a lien holder.

Seeya tomorrow,

John Hyre

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Not done yet - Posted by Karl (Oh)

Posted by Karl (Oh) on November 03, 2000 at 08:11:08:

DJ,

No, I haven’t finished this yet. I gave this seller the two options, cash or pmts. She picked the $6k, but I don’t think she was completely clear on the arrangement, although I went through it several times. We signed a purchase agreement, she’s moving out this week and I’ll finalize after she vacates the home.

She called and left me a very short message a couple days ago, saying “this is Mabel, when you buy this, I’ll want cash”. I’m guessing she now is hoping to get her $6k all at once. I’ll wait until she’s all moved out, and then show up with $4k cash. “Oh, so you decided to take the cash offer after all!” She’s a very nice older women, I’ll be patient with her, I’ll let her take her pick of the two options again. Either one works good for me. But if she doesn’t like either option, I’ll walk, and she’ll suddenly be paying lot rent again. Too many other good deals popping up in my park right now. She’ll be calling me back in a couple months.

If she decides to take the payments, I’ll follow your recommendation. I’ll title the home in my name and give her a personal IOU. She’ll have no connection to this property. But I’m guessing she’ll end up taking the cash.

Karl Kleiner

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Re: Small World… - Posted by Karl (OH)

Posted by Karl (OH) on October 26, 2000 at 09:45:30:

Tomorrow? Are you taking an early morning Friday flight to Atlanta?

Then who’s going to drink a beer with me and Sarah in the bar tonight?

Karl