I agree with you. Often these sellers of mobile homes have an unrealistic number in their minds. Many times they are upside down with their note on the mobile. the amount owed is above what it will actually sell for.
I like to continue to call them once a month to see if anything has changed. Eventually the price will have to come down if they do need to sell.
Also mention to the sellers that you are an investor. You do this as a business and you do expect to make a profit. Just like anyone else.
Where I have gotten my best mobile home deals is through bank REO’s.
In regards to doing ?Lonnie Deals? I ride the speed bumps to locate houses for sale by owners, when I locate these houses I then arrive back at the office and start calling for information. When I phone the owners about there home I introduce myself as someone that may be interested in buying there home. Is this the correct way to approach the owners of these houses? Should I introduce myself as a real estate investor? Or just go in ?low keyed??
I also have a questionnaire that I use when asking the owners questions, I think that this helps out a lot. The problem that I have is that most of the time the owners are asking way to much for the house. I called on two the other day and here is what they told me.
House #1 Daughter has the home mother past away. 1986 3br 1bath she said that it needs no work, vacant and they need to sell because it?s located in a park and they have to pay the lot rent. Asking price… a whooping $19,000 so I ask what is the best price that you could give me if I could have all CASH tomorrow… she said $18,500 she stated that her mother put a lot of money in this home. I haven?t seen the home yet. Man I could by a new home for $20,000
House #2 Older man selling a 14x60 2/1 for $17,000 which includes a new snowblower in the shed, all furniture, air condition, and everything in the house has been updated. I asked the same question as always… What would be the best price you could give me if I had all cash tomorrow? He said $16,500 and he would take all the gold underneath it. I said thank you and hung up.
My questions are; How to you bring these people back down to earth? Should I just say thank-you and hang up, or should I try to help them out with explaining what today?s real prices of these pre-owned home are selling for?
Around here the re-sale prices run anywhere between $9,500 and $12,500 for a recondition home in the mid 80?s and that is all we can get financing on… Max…
Identify and then Negotiate - Posted by Scott (OR)
Posted by Scott (OR) on April 04, 1999 at 20:05:48:
Hi JRook-
Sounds to me that you need to determine which sellers in your market are serious from those that are siimply hanging a sign in the window to see what happens. You see those that are actually out of the home and paying lot rent are the ones who will become increasingly motivated to come down in price. However, you have to LEARN how to identify people who will come down to a realistic price. This can only be done by learning to listen, ask questions, and the art of negotiating. I would strongly recommend anything by Roger Dawson and re-read the method that Lonnie uses to negotiate.
Being successful in this business (atleast in my market) really depends on your ability to locate and zero in on negotiable sellers. This is where the rubber meets the road…
Some Lonnie students use bank repo’s, other dealors, ect… and I would try this method as well. However, negotating skills are still paramount. In my neck of the woods bank repo’s are ridiculously high in price and dealors aren’t reliable for deals.
Hope this helps,
Scott
Posted by Nancy in NC on April 03, 1999 at 20:17:37:
I explain to the people that mobile homes are like cars and depreciate. I also tell them that mobile homes have a “blue book” also. The NADA value etc. But you need to look at the property, look for flaws etc, tell them what you see as the value, and that you are not trying to insult them but you can only offer… then name a price range. Leave on a friendly note and tell them to feel free to call you if you can be of help.
You will get some calls at a later date. Not always but enough to make the visits worth your while.
I did one trailer flip in a park where I cashed out by using Greentree. I made $8,250 after expenses.
This was not a Lonnie deal, but I learned how to do it at one of Lonnie’s seminars. A young lady from Atlanta turned me on to Greentree.
Keep trying there is more than one way to skin a cat. A lot of people here also think a mobile palace, escalates in valued like a house, but after they try to sell it on their own, and keep paying lot rent, they get smarter ( that means softened up and ready to listen to you)
HAVE FUN AND REMEMBER TO KEEP A POSITIVE MENTAL ATTITUDE
Posted by Dirk Roach on April 03, 1999 at 12:47:33:
Hi Jrook,
Low-Keyed Investor is the way to play it (works good for me). Yes riding the speed bumps I have found is the best way to find deals.
I would stop and talk to the people right then and there though. If they’re not home, sure give them a call lator.
I think that a questionnaire is a super tool to use when you’re getting started. I wouldn’t read off a clipboard with it (in front of the people), but use it as a phone tool.
Actually to be honest it’s great to use at any level of Mobile home investing, whether it’s your first one or your fiftieth, because you have a hard copy record of things.
Okay now for the sceniorios. The 1986 home at 19k is retail, financed (in my market, remember yours maybe different).
AND IT’S UNLIKELY SHE"LL GET ANYTHING LIKE THAT FROM A CASH BUYER.
Home #2, he’s dreaming.
However, it’s sounding to me that you’re walking away from a negotiation situation.
In my market I always have to negotiate what I buy these suckers for, just part of it.
I would suggest you find some books on negotiating and read and learn them.
Most likely you’re going to have to “de-fuse” a positional bargaining situation. Which is in your interest to do, as you don’t want to become adversarial.
But most important remember never get emotional, and walk-away is your best friend.
Okay now comes the part of your post, which I find Scary.
“Around here the re-sale prices run anywhere between $9,500 and $12,500 for a reconditioned home in the mid 80’s and that is all we can get financing on…Max”
This sounds like Broker mentality. Sorry brokers, some real nice people I know are brokers…blah blah blah.
WHY ARE YOU TRYING TO GET SOMEONE ELSE TO FINANCE THESE MOBILE HOMES?
The name of the game in “Lonnie Deals” is Owner Financing.
Your above posted paragraph leads me to think that you need to go back and re-read Your Mobile Home Bible, Deals on Wheels.
And the Mobile Home New Test. Making Money With Mobile Homes.
If you’re using a finance company to finance your mobile homes you’re not executing a “Lonnie Deal”. Plain and simple.
One can make a buck using a finance company on mobile homes, but your working for a commission, and frankly (in my opinion) not reaping the rewards of the Lonnie Method.
And you will quickly find yourself in a street fight with everyone else in town. Why waste your time?
Anyhow JRook, hope that this helps, Also you might want to check out the chatroom in the evenings as they’re are always some experienced Lonnie students in there.
Good Luck,
Dirk Roach