Posted by Icetime on March 23, 2000 at 07:51:21:
I live on the East side of Indy. I’ve been to many parks all over the city but mostly concentrate on the East side right now (Ones on Franklin Rd., Shortridge Rd., Pendleton Pike, etc.) See Ya,
Lonnie Deals: Motivation VS. Asking Price (Long) - Posted by Tony-VA
Posted by Tony-VA on March 21, 2000 at 07:03:16:
This started out as a reply to Stephanus, but since this question is one that goes through most new Lonnie investor mind’s, I decided to make this a separate post.
Yes Stephanus, I do buy most of my homes for $2500 or less. Yes some have signs in the windows asking $11,000 etc. This sign in the window often means nothing. Don’t get confused with asking price, and motivation. Remember we are buying these homes from motivated sellers. If the seller is not motivated, the price will remain high. Once the seller becomes motivated, the asking price goes out the window. Spending too much time talking to Un-motivated Sellers can be extremely frustrating for investors.
In Mobile Home investing, and most REI I suppose, you need to find ways to locate Motivated Sellers. For us, most of them are located through Park Manager referrals. The PM’s know who is behind on lot rent. They know who bought a new home and is paying two lot rents until they can sell their old home. They know who has had their home listed with traditional Broker’s for 6 months without so much as a single person coming to look at the home.
I do call on adds and For Sale Signs to see what the level of motivation is. If the person is not feeling time or money pressure, I let them know up front that they may be better off selling the home themselves or listing it with a Broker. I explain that we pay all cash, then we sell by taking a small downpayment and holding the financing. Because of this, we cannot pay what they are asking or we would not be able to make enough money to support a business. They all understand this. It’s like baiting your fishing line at night and waiting till morning to see if you have landed a catfish.
Now these people will try and sell and typically get no, or few responses. None of the buyers can offer cash and these owner’s don’t want to finance the homes. A few months down the road, we are very likely to get a call asking us to come by and talk again. Now when they call back, they already know we are going to pay a lot less than they were asking. They have already mentally conceded a discount. They have become motivated by lot rent payments adding up, frustrations with no cash buyers and no/few buyers being shown these older homes by the brokers. Time and money have begun to take their toll and these people have become motivated to just sell and get out so they can go on with their lives.
This is how a typical seller becomes motivated. This does take time. We farm these type of homes but concentrate on finding sellers who have already reached this motivation level.
So yes, you can buy homes for little money if the seller is motivated. It is NOT THE HOME we are buying, it is the SELLER THAT WE ARE BUYING FROM that makes or brakes these Lonnie deals. Park Managers will play a vital roll. When you get one good referral from the PM, you will likely find 3 motivated sellers in that park. It takes some hunting, but they are out there.
Everyone that reads Lonnie’s book and drives out to look at parks their first day is confronted by the same reality. All the sign’s say $8,000-$12,000 or more. We then go home mad thinking “man, it must be nice to live where Lonnie does and be able to buy homes so cheap. You just can’t do this here.” Well, once we learn to find motivated sellers, it’s a whole different story. People nationwide are buying homes just like Lonnie for the same prices once they are able to find the right market and sellers. Remember, the signs don’t tell you the motivation that the seller is feeling. Your questions and homework will.
Best Wishes,
Tony-VA
Re: Lonnie Deals: Excellent Post Lonnie Jr.! - Posted by icetime
Posted by icetime on March 22, 2000 at 12:25:06:
Tony or should I say Lonnie Jr. You must have been driving through the same neighborhoods I just visited. Everyone here in Indy wants 8-12k for 80’s MH’s (even 70’s). Guess what? They rarely sell. It’s the ole waiting game; when their expectations finally meet with reality. Thanks for the post.
Re: Lonnie Deals: Motivation VS. Asking Price (Long) - Posted by AWESOME!! GOOD SOLID TO THE POINT
Posted by AWESOME!! GOOD SOLID TO THE POINT on March 21, 2000 at 15:45:50:
Unlike some individuals, you concentrate on what is to be gained and work around what doesn’t. I see your post and get excited about investing. At first I thought, yeah, yeah anyone can brag but, you can tell when someone actually has experience or not.
Hope to see another response like this one, that answer newbies endless questions.
Darren
GREAT POST - THANK YOU TONY. - Posted by Stephanus
Posted by Stephanus on March 21, 2000 at 12:07:49:
Thank you so much for your info.
A movtivated seller is just around the corner… - Posted by Jacob
Posted by Jacob on March 21, 2000 at 12:04:03:
The first question I have for you Tony, is when is the book coming out and can I preview it?
Motivated sellers are the only way to make money in this business, and in re in general. Like everyone, I bought units for 3 times what I should have in the beginning. Mainly because I wasn’t dealing with a motivated seller.
Part of it too is having the nerve to ask for your price. I am not one that negotiates for the sake of negotiation. If I think the seller is asking a good price that I can make my profit on, I just might pay their price. In fact, I have several times. It’s called leaving something for the other guy.
Probably 90% of my motivated sellers come from tips from the pm. Simply because a good one knows everything to know about their park. I can mention an address, and the pm can rattle off the names of the people, their occupations, income, number and names of kids, year and manufacturer of home, etc. They know when someone really needs to sell.
That’s the trick to this, knowing when someone needs to sell. Tony is an excellent people person, and really gets a good feeling from people. Meaning, he can talk to someone and get a feeling for their motivation in about 1.2 seconds. That’s something that has and will make him a lot of money.
Jacob
Ice, where you at? - Posted by Jacob
Posted by Jacob on March 22, 2000 at 16:07:19:
As a fellow Ice fan, I al pleased that someone else is in this goldmine.
Where are you located?" What parks have you visited?
Just curious, as you are the first investor from here I’ve really heard about.
Jacob