Lonnie deals- Will my bad credit prevent me from buying Lonnie Mobilehome deals? - Posted by john

Posted by Jeanne on December 30, 1999 at 12:41:14:


Jacob makes a some very, good points. Start from scratch. It’s tricky to establish the right relationship. Make sure you walk in there with an air of confidence (even if you have to fake it). DO NOT wear a suit, or seem like a big wig. Let the manager feel as thought he/ she has some control over the situation, after all, he/ she will have to give approval to your buyer. Act like you do this all the time, and have never had to fill out a credit check or park app. because you won’t be living there. If you get the cold treatment again, move on to the next park. The manager would only hinder your success, anyway.

Here’s a great resource if you don’t think there are an abundance of MH Parks near you. Go to bigbook.com which is a big yellow pages directory. Search by distance from your home address 5, 10, 20 miles. You will be suprised at how many parks are around that you never noticed. You will get an address and phone number for the park.

Lonnie deals- Will my bad credit prevent me from buying Lonnie Mobilehome deals? - Posted by john

Posted by john on December 28, 1999 at 22:39:31:

I bought Lonnie’s books and I’m thinking about doing Lonnie deals. However my credit is bad. From what I Understand from reading his books, the park managers virtually always run a credit check on the buyer, and if it is bad they won’t allow the buyer to buy(keep) the mobilehome in their park. Since I am going to be the initial buyer in all of my Lonnie deals, Am I wrong to assume that virtually all park managers will reject me as a buyer of mobile homes in their parks.

Is there a way around this? Form a Corporation? Get a partner with good credit? Forget about Lonnie Deals since my credit is bad?

Re: Lonnie deals- … Mobilehome deals…I don’t get it - Posted by danny

Posted by danny on December 29, 1999 at 12:52:45:

I have run into a lot of people going into mb flipping and holding. I don’t see how they profit from this. Here are my fears/questions/concerns…tell me why I am wrong.

  1. I am an investor. I flip and rent houses. When I sell a house, I know the buyer is making a good investment. Houses are generally the best investment people make in their entire life. Selling a used mb to someone is like selling them a used car…trouble! No appreciation, just DEpreciation. That bugs me a little.

  2. Isn’t it true that mb parks have covinents against older mb homes. In other words, when a mb changes hands, it may have to be moved out of the park because of its age. Sounds like a lot of trouble to me. They do this to keep the park looking nice.

  3. mb buyers generally don’t make much money or have good credit. chances are, if you sell someone a mb, you are going to end up reposesing it.

Just my thoughts…I have no experience in this area but have spoken to a couple of people that have done it. My sister once owned a mb. They got out…quickly!

Re: Lonnie deals- Will my bad credit prevent me from buying Lonnie Mobilehome deals? - Posted by Jacob

Posted by Jacob on December 29, 1999 at 09:11:12:

As usual Dirk hit it right on the head. In fact, I would reccomend searching this site to read Dirk’s posts regarding mobile home investing. A bit more real world, if you ask me,
Bottom line is very few park managers care about your credit. Why? Because you will be making it very clear what your plans for the unit are. And as long as someone is paying the rent on the lot, they don’t care who it is. For that matter, many don’t care about the credit of the new person moving in. The parks you will be dealing in will not be full of the new $80,000 double wides. In fact, if they don’t have some vacant lots, you may not wan’t to deal with them anyway. In anycase, the pm’s don’t seem to care as long as you are up front and clear about what you are doing.
My credit could possibly be worse than your’s, although it is improving. This might truly be the one area of real estate investing where nobody cares about your credit.
Good luck, and feel free to contact me if I can help in any other ways.

In my experience - Posted by Dirk Roach

Posted by Dirk Roach on December 29, 1999 at 04:46:47:

Hi John,
In my experience I have personally never had a Park run a credit check on me at all. I am very upfront with parks in regards as my intentions. The majority of time that’s cool, however there have been a couple that don’t want to play ball “my way”. Oh well, their loss, and I’m down the road to another park.
As far as your credit goes, I really don’t see how that can be an issue since YOU are not going to living in the park. Yes, you are going to be acting as a finance company same as the big boys and are going to finance the buyers who WILL be living in the park, and abiding by park rules and requirements, but really so long as you’ve got the money to buy the home, and make the payments until it sells what does the park care.
Basically it’s how you approach it, and how you carry yourself. When I deal with a Park I have a game plan that I follow, the Park Managers follow it too, because it is in their interest to. One they get a qualified tenant, Two they most often get compensated one way or another.
I did have one park one time say “Well we will have to run a check on you so that we feel comfortable enough in that we will get our payments.” I replied with a very pleasant, “That’s fine, which one of my business enities and corps, would you like to check out?” Funny thing was all of a sudden they didn’t have to check out any. Once you’ve been around the dancefloor a couple of times with these Parks it all really becomes second nature.
And it’s like any negotiations you just have to stay in control, it’s easy.
Lonnie deals I can personally attest, are great money makers. In fact most times they turn into the gift that just keeps on giving.
Low risk, ridiculously high yields…what could be better?
Good luck,

Re: Lonnie deals- Will my bad credit prevent me from buying Lonnie Mobilehome deals? - Posted by DJ-Tx

Posted by DJ-Tx on December 28, 1999 at 23:07:35:

I don’t think the park manager will be too concerned about your credit since the length of time you will hold title is very short. Seems to me more emphasis will be placed on your buyers credit. But, be certain to keep s credible reputation with all of the managers that you deal with. Hope this helps out and great luck on your deals

Basic business principals - Posted by Dirk Roach

Posted by Dirk Roach on December 29, 1999 at 16:17:30:

Hi Danny,
In the mobile home realm, (aka Lonnie Deals, Flips, Move and set ups etc) one utilizes very basic business principals.
In fact I feel that is why the Lonnie Method produces such incredible results.
Here I will attempt to answer your questions, for the benefit of all who maybe considering mobile homes as an investment strategy, by answering your questions/concerns by the numbers:
1.) As a successful investor ones goals are pretty simple. One wants to make the best return on their investment. Personally my main goal is to make infinite yield on a deal, and I would say that 80% of the time I accomplish this. However if I cannot I will settle for anywhere over 70%yeild (if I have to). Which after extensive research etc. I have not found ANY other investment arena where these yields consistently occur.
The average medium, per captia income currently in the US is 27k (Gross!) And as far as Houses being the “best” investment people can make, is a statement which I disagree with totally. We all know that markets fluctuate and shift. No one has a crystal ball and no one with absolute certainty can place future markets. However one can look to various issues and climatic (economic) positions which can help one make sound investments.
In the mobile home world we do target the “blue-collar” class as our home buyers. They are a constistant target group which for the most part is over-looked, by the investing market. Basically we target them for two reasons: First, we have very little competition, no one wants to deal with these folks because frankly they have not evolved to level of financial sophistication to amass big chunks of cash, etc. They are forced to buy big ticket items (such as shelter), on payments, while paying above average interest rates. Secondly they live and function in a world were established, conventional lenders etc. will not treat these folks like people at all. There is an intrinsic distrust by this market of banks and/ or big corporations. Because basicly the conventional institutions look down their noses at this HUGE market. These folks are etreamly grateful that we are providing them with the opportunity to experience the pride of home ownership, and they show that gratitude by making timely payments (at above average interest rates).
I personally and many others have taken advantage of this stigma revolving around not only the target market, but the investment strategy of used mobile homes.
Depreciation and appreciation, really, honestly, simply do not exist in our investing theater. What does exist is the simple concept of “what the market will bear”. Thus the frutality of relying on existing, various publications such as the NADA books etc. Markets are variable from local to local, so existing sources of value are meaningless.
2.) Some mobile parks do require that older mobile homes be moved out of their parks when sold. Okay, we don’t play on that ballfield. Believe me there are plenty of other places to play ball in and some basic market reconisence will tell you were you can play and were you can’t.

3.) Repossessing mobile homes. Much easier to repo (in almost every state) than the fun trip of going down eviction road. Remember Mobile homes, 99% of the time are personal property NOT Real Estate. And also remember that for a couple of thousand dollars you can make a mobile home look like a palace inside, in little or no time.
Also statistically most often when you do get these back, you have already reached the point of initial investment and actually went beyond that. So what that means in real world investing not only do you have your initial investment back in your pocket, you also have made enough to cover repair and cleaning expenses, now you have a product which you can market with little or no competition, for an infinite yield, in a very quick time frame (due to the huge target market)
Can you think of a better investing postition to be in?
On a last note I would simply like to say that I by no means am attempting to enter into a debate with you, regarding investment strategy. What is good for me, and what I prefer, you may not. That’s cool, I respect that.
However let me also say that during the course of the last year I have averaged 12 completed deals per month, and that I have never lost one cent in any of my mobile home deals! I Buy for between $2k and $5k I have sold for between $13K and 17K. Those are real world numbers which I have executed time and time again, mainly because I know my market, and I have educated myself on various techniques to make that happen. So if you Danny or anyone else out there is sitting on the fence as to weather to look into mobile home investing, I guess one could say that I am pro mobile home.
Also one of the best places to learn, and understand how all of this works, besides other investment strategy will be at the upcoming convention.
I hope to see you there. And Good Luck with whatever course of action you maybe following.

mb homes - Posted by Gator

Posted by Gator on December 29, 1999 at 16:07:12:

  1. I am an investor. I flip and rent houses. Houses are generally the best investment people make in their entire life. mb homes have No appreciation, just DEpreciation. That bugs me a little. — If your home is the best investment you ever make, in my opinion you will retire poor. MHs do depreciate but does the money your renters give you appreciate for them? Doesn’t that bug you?

  2. Parks have covinents against older mb homes. ---- Some do but the ones I deal with don’t have a problem if the home is kept neat. They don’t want a vacant lot.

  3. mb buyers generally don’t make much money or have good credit. chances are, if you sell someone a mb, you are going to end up reposesing it. ---- my mh buyers are able to come up with $1000 or more better than my renters are. If they pay me $1k or 2k down on my $4k home and quit paying afer about a year (~$3k) and I have to reposess it and take another $1k down and do it again, I can deal with it.

My thoughts Danny are that those who get out of MHs quickly just don’t realize what a money machine they can be. By the way, I’ve just about quit flipping and renting, I’m making a lot more with mobile homes.

Just some thoughts for what little they are worth. Best wishes,


Re: Lonnie deals- … Mobilehome deals…I don’t get it - Posted by Shelly

Posted by Shelly on December 29, 1999 at 15:11:08:


Buying a house is not neccessarily the best investment you can make. It is a libability. If you paid cash for a $100,000 home and it appreciates that is a good invest ment. However, since most homes are financed you end up paying two - three times it’s purchase value. That does do not sound like a good investment to me. More like a liability. Read Rich Dad, Poor Dad and you will understand. However, if I am “the bank” and I carry the note, I am the one making a good investment with 45% to unlimited yields. MH “lonnie deals” work.

Re:I don’t get it - Posted by Jeanne

Posted by Jeanne on December 29, 1999 at 14:46:41:

Dear Danny,

Why do you consider buying your a house (I infer you mean your personal residence) as a good investment? Robert Kiyosaki says that investments make you money, liabilities take your money. If you are paying a mortgage, property taxes, upkeep, etc…on your home, and not making any profits from it, how is it an investment? I’m not saying you shouldn’t own your own home, just make sure you put it in the liabilities column on the balance sheet.

Next, why do you care if there is no appreciation for an old, used MH? You aren’t holding it, you are selling it.

In a typical “Lonnie deal,” ideally the MH would stay in the park. The parks you are looking for MH deals in are not necessarily the prettiest parks, nor are the mobile homes the newest ones.

I strongly suggest you read some of the How-to articles Lonnie Scruggs has written for this site. I’m not suggesting that you invest in used MH’s, but you can get the answers for why others invest in used MH’s. I’ll make it even easier for you. Here are a few URL’s for the articles:

I recommend that everyone read anything Lonnie Scruggs has to say. He has a tremendous amount of insight and knowledge which he is very willing to share.


Will attempt to clarify - Posted by Jacob

Posted by Jacob on December 29, 1999 at 14:19:46:

I’m not sure about a few things you said, but I will try and clarify the set-up. I’m unclear about your use of the word “flip.” I’ve never met or heard of anyone that “flipped” a mobile home. Since it is personal property and not real estate, Ireally don’t think you can "flip’ a mobile home. I’m also not sure how you can “flip” and rent a house, since once you “flip” the house to someone, you no longer own it.
Anyway, there are several ways to make money in mobile homes, and I can assure you there is a huge market for it. I make my living solely from investing in mobile homes. We buy older models, from 1978-1986 or so. The smallest was 14x55 up to 14x70. I would never pay more than $8,000 or so for a unit, using 65%of the NADA value as a benchmark. We then clean, do minor rehabbing and then re-sell the unit at 100% of the NADA value. I generally don’t finance the deal myself, as I use the cash to do more deals. However, I assist my buyers in their financing through finance companies. How do I make money/ Simple. I buy a 1979 14x55 2/1 for $4100 and resell it a few weeks later for $7500. Extremely easy to do and it beats working for a living.
Those who are doing so-called “Lonnie Deals” you ae speaking of do things a bit different. They would finance that 1979 14x55 for probably 9 or $10000 and collect the payments. If the payments were $200 a month, your annual yield (without my calculator) would be close to 60%, not too shabby.
That is an extremely basic explanation of it. yes, some parks can be hostile to older units. That is why it is extremely important to develop a relationship with the park manager. You can’t do business without it. Yes, mh’s do depreciate, but I am not buying it myself to live in it, so I frankly don’t care. Those who finance their own sales operate in a sort of underground area where they alone determine the value of a particular unit. If they can finance it for $10,000, they don’t care that the NADA value is $7500. That’s not saying it’s wrong to do business that way. There is nothing wrong whatsoever. It just explains why one wouldn’t care too much about depreciation. And in my experience, repos are no more common than evictions, and when financing a mh you don’t worry about leaks and plumbing.
hope that helped somewhat.

Dirk, I have a similar problem - Posted by Blane (MI)

Posted by Blane (MI) on December 30, 1999 at 07:09:02:

Like John, I’m preparing myself to do Lonnie deals. And like John, my credit’s not that great (excellent payment history, but a ton of debt). So far, 2/3 of the parks I’ve talked to won’t even allow me to finance homes in their parks. Of the other 1/3, I’ve been advised I’ll need a credit check done, and as I noted in a prior posting other things like income verification, police clearance etc.

I’ve been very upfront with everyone about my intentions, but this doesn’t seem to remove any obstacles. You note that it’s how you approach it and how you carry yourself. Perhaps I need to modify my approach in some way. Being new, I don’t have the luxury of having the park choose which entity to check (though I do have a corp. set up), so I guess I’m not sure how to respond when the subject of a credit check comes up. I also recognize the need to work on negotiating as well, as I don’t feel I’m very good at it.

Lonnie deals seem the perfect way to get started if you have very little to work with. Working my way toward my 1st deal is a little scary, but exciting as well. I continue to review Lonnie’s books, but any further thoughts about approach, negotiating or anything else would be greatly appreciated.

A happy and prosperous New Year to you,

Blane (MI)

Thanks all for the advice, will keep you posted, and Happy New Year (NT) - Posted by Blane (MI)

Posted by Blane (MI) on December 31, 1999 at 16:40:56:


Re: Dirk, I have a similar problem - Posted by Bill K. - FL

Posted by Bill K. - FL on December 30, 1999 at 17:21:01:

Well, here is what I would suggest. And you would probably come out ahead in the deal anyway. Don’t buy!
Just arrange a price with the seller, find a buyer you can finance that will pass park muster and be the bank.
No holding/repair costs this way. (You can afford to give the seller more=more deals) You go on the title as lienholder only. Now, does anyone know of a good way to sell these notes at a reasonable yield to recoup your investment/realize profit and do more?

play the worker role - Posted by Tony-VA

Posted by Tony-VA on December 30, 1999 at 15:06:36:

Try this. Since you have a corp. just tell the PM that you represent a corporation that will be financing the homes. You are essentially a salesman for a company. If they insist on your credit check, explain that your credit check would not apply because you personally just work for the company. The company itself is going to be who signs all the documents, assumes all the risk and guarantees that the lot rent will be paid if your buyer defaults.

They will understand being an employee. Being an entrepeneur, they don’t understand. We must work within their comfort level and transact business in such a manner. Remember, a confused mind will answer “no”.

If for some reason they still insist on your credit check, tell them that none of the other parks have required your credit check. Ask how many credit checks they have run on Greentree’s sales agents.

If you still get friction, this park is not for you. If you have tried to reach them on a level that they are familiar conducting business on, and still got a “no”, then you are better of moving on to another park.

The hard part is NOT to go inside and proudly announce to the world that we own a new company that is trying to do these deals.

Be humble all the way to the bank. Simply explain that you represent such a company. Remember you asset protection lessons from Mr. Bronchick.

Best Wishes,


Re: Dirk, I have a similar problem - Posted by Jacob

Posted by Jacob on December 30, 1999 at 11:10:30:

I have read this and other posts from you, and as an experienced investor I remain confused. When you resell a unit and finance it, you are the finace company. When your buyer takes the title to DMV, you (or your corp.) are the lien holders, no different then if Greentree/Conseco or any other national finance co. My guess is that they think you are selling on contract or renting it. It’s up to you to communicate clearly exactly what you are planning.
I can definitely sympathise, because the first two parks I approached were exactly the same way. So guess what, I don’t do business with them. Right now, I specialize in two small parks in a rural area 25 minutes from my home in a large city. The managers in both love me, x-mas cards etc. Why? Because I make them money and allow their parks to function better. I have abolutely nothing in common with either, and wouldn’t consider either a friend. But, I have developed an excellent relationship because I have focused on them trusting me first. Doing what I said I would do.
My advise would be to start over entirely. Try going back to the parks and developing relationships with the managers. As a matter of fact, the first unit I ever bought I purchased and almost had resold before I ever talked to the manager. I don’t reccomend this, but it did allow me to show her exactly what we did. She understood and immediately gave me three leads on other units in the park.
Good luck to you, and feel free to let me know if you have any other questions.