Posted by Dr. B. (OH) on June 01, 2006 at 10:24:18:
Jeff,
My solution is to offer the owner the “NO Eviction” status in trade for her title-no money to her. Thus 204 (taxes)+ 300 (back rent)+ 200 (referral/incentive fee) = 704.
I think JeffB (MI) is probably right that I’m working this too hard. You are both right that Player A is not motivated enough. She has the usual blinders on until the Sheriff is knocking on the door on eviction day.
I have a good relationship with this PM from working in another of her parks. I pay no lot rent while rehabbing and getting them sold.
You’d think after 27 deals I’d remember the mantra:“motivated sellers, motivated sellers, desperate sellers!”
I’m seeing the problem better:
I’m motivated for a 3BR.
PM’s motivated for clear title.
Owner not appropriately motivated.
The most important player in this deal is NOT MOTIVATED.
Happy Trail(er)s
Steve
Looking for win,win,win(long) - Posted by Dr. B.(OH)
Posted by Dr. B.(OH) on May 31, 2006 at 20:59:04:
A PM who has recently given me two homes told me about a woman being evicted from the park and I might get the home cheap. It is a 1977 3/1 in fair shape at best (doors ripped open, sewer running out on ground, walls and floor coverings a wreck). I’ve never seen the bathroom because there is always herself, a friend or one of six kids (1-21 y.o.) taking a bath or shower.
Player A-The Owner: Never had the title transferred into her name but signed her name in the “Verification of Odometer” box. She doesn’t have the money (or isn’t willing) to pay the $204 in back taxes. She wants to walk away with $650 and NO Eviction on her record.
Player B-The PM: Doesn’t want the woman to disappear with the title untransferred forcing the abandoned home rigamarole. Also the PM would like to get some of the back lot rent (negotiated to $300).
Player C-Me: I need more 3BR homes to sell and to help out the PM. This home needs $4K in repairs. I’ve never sold a home in this park (more rural than my usuals) and suspect I’ll only get $7500 on a note. I usually try to triple my money going in to survive unforseen repair overruns, torn up repos, etc.
I’m thinking, get the PM to convince the owner to pay taxes ($200), get title in owner’s name and sign it over to my company. I reimburse taxes, pay back lot rent ($300) plus $200 to PM for getting it done. Owner gets NO Eviction status. I get a 3BR wreck to work on for $700.
If you’ve had your thinking cap on while reading this, let me know if you see other ways of structuring this deal.
Happy Trail(er)s,
Steve
Re: Looking for win,win,win(long) - Posted by Jeff-oh
Posted by Jeff-oh on June 01, 2006 at 08:34:39:
I do not follow your math.
Owner wants $650. $204 in Taxes $300 in lot rent. And $200 finders fee. = $1300.00
Another question what about future lot rent? Is the park going to charge you while you rehab this “eyesore” in their park? Sounds like you are taking on all the risk while they get all their money and loose a problem (i.e. Abandoned title)
I would go after it this way.
Talk with park. Inform them on how you are going to help them. i.e.
- keeping a home in their park that will pay when a new tennant is in.
- Turning an eyesore into a good livable home.
- Removing a health hazzard (sewer running out on ground) that may get the attention of the county health commission.
- providing free advertizing for their park.
- bringing in a godd qualified paying tennant.
and most imeediat and costly
- saving them from a costly (in time and $$$) eviction
and
- saving them from an even more costly abandoned title court hearing)
You are providing a lot of value to this park, How much are they willing to play ball?
At the least, I would go for, waiver of the back lot rent, and free lot rent while you are actively upgrading and marketing the home. (If they are not willing to give an indefinite time frame make sure you negociate ample time)
As for player A, Let her get motivated. For her to get the title into her name she must pay the taxes first. (here in Oh) Tell her you give her $300 cash if she hands you the title and will sign 5 POA’s so you can get the title into your name. (you may only need 2 but an extra one or two is always helpful) Just make sure the previous owner has signed the title and his signature is notorized. If it is not, this this title is invalid. Or you will give her $600 cash if she hands you a clean title.
If the other two parties are unwilling to cooperate then let the situation stew a little let the park start eviction proceedings.
Let them go through the whole process and have an old ugly home sitting in their park for another 6 months to a year. All the time letting them know you are there to help them turn this non-performer into a performer. And if they never come around… let them pay (in lost income) for their short sightedness.
MHO
Jeff
Re: Looking for win,win,win(long) - Posted by JeffB (MI)
Posted by JeffB (MI) on May 31, 2006 at 21:11:33:
It seems to me that you are trying too hard to make this work. You’re going to have $4700 into a home that you’ll only be able to sell for $7500 on a note. I don’t suspect the yield (or more importantly, the dollar amount of profit) are going to make it worth your while for multiple headaches that are involved (extensive rehab, title issues, etc).
If this seller were motivated, she’d BEG you to take the home and in this case should be paying you to do so. My impression is that you’ve been looking hard for 3 bed units to fill your demand, and not been focusing on finding motivated sellers. Now, if there is some intagible benefit to doing this deal (ie major brownie points with the PM), well then maybe that changes things.