Posted by phil fernandez on December 03, 1999 at 20:12:25:
Tony,
Excellent idea. As Tony says, sell the front end of payments, which is called a partial for cash. You would find note buyers that might buy the front end payments because they would be getting paid early on a depreciating collateral such as a mobile home without land.
“lonnie deals” - Posted by Chad Carver
Posted by Chad Carver on December 02, 1999 at 13:39:11:
Have 2 Lonnie deals that I need help with.
Deal 1.
1973 3/2 with 1300 sq ft. Purchasing for $2,750 and needs about 2-3K in repairs. (floor, floor coverings, some roof work, and some paining.
Deal 2.
1986 3/1.5 with 840 sq ft. Purchasing for $4,500 and only needs a good cleaning of the carpets to be ready for resale.
I would like to offer these on terms for 1K down or so. My question is, what is the best way to structure my note for maximum value down the road.
12K sales price
60 month term
1K down
12.5 %
If these were the terms on each of the deals, What could I reasonably expect to get on the discounted notes?
Sorry this is so long, but I wanted to get you all the info I could.
Any help is always appreciated.
Thanks
Re: “lonnie deals” - Posted by phil fernandez
Posted by phil fernandez on December 02, 1999 at 14:53:23:
Chad,
If these mobile homes are in a park and not on their own land, it is tough to find buyers for the notes that you have created. Most note buyers won’t buy the note unless there is the lot included.
From my experience, the few note buyers that will buy these without the land, the discount is quite steep. I would create these mobile notes with the idea of keeping them and perhaps build up a portfolio on them and enjoy the cash flow.
As Lonnie says, he likes to go to the mailbox to pick up another check.
Re: “lonnie deals” - Posted by Tony-VA
Posted by Tony-VA on December 03, 1999 at 07:29:20:
Chad,
For some reason I cannot get your post to open. From Phil’s response, I wonder if you have not considered selling a part of your note. This would allow you to receive money up front (increase your yield) and receive money off the back of the note.
Your investor would simply buy a part of the front end payments and still receive a great yield.
Email if this sounds like somthing you might be interested in.
Tony-VA
colell@erols.com