Posted by ScottS(NC) on January 24, 2002 at 11:23:54:
Scott,
I would say 90% of PM’s around here do not allow rentals at all. Around here a 2/2 14x70 about 15 years old in decent shape in a decent park I would get 9-10k for and would buy for 4-5k. If this home you are refering to is in a park, I would pass on this deal. Do not leave the lot in the sellers name and be a middle man! I also own a small park and as a PM I can tell you if I get left out of the loop, somebody will be moving a home. If you are into Cash Flow this Forum should be your new home. These Lonnie deal have out performed traditional REI In my area Big Time. When you approach a PM tell them your a finance company just like Green point or Conseco. Ask them if they allow financed homes in there park. They will say yes at this point I ask them what my buyer will need to do to get qualified. When they give you a copy of the park rules your in. If they want more security guarantee the lot rent for the entire duration of your note. Once you get established in a few parks ask the pm to be a reference for you for other parks. With these three concepts I have never been told no! I will give you an example of my latest deal to help you understand the Cash Flow potential. 1975 2/2 12x70 excellent condition. Owner wanted 5k would not budge I knew I could sell for 9k but profit was still a little slim for me. So I offered the owner 2k down remaining 3k financed at 0% interest for 20 months. They went for it. Now I have 2k of my money in it, and it sold for $2500 down, payments of $200 monthly (roughly) for 48 months at 12% interest. Try to figure that yield Good enough. I recieve an extra $500(from down payment) plus $50 every month for 20 months(I pay first owner $150 my buyer pays me $200) and the full $200 for 28 months after that. Now people do deals like this all the time here. Scott let your original deal go and go after these types of deals if you want cash flow. Sorry so long. Questions? Take Care ScottS(NC)
Mobile Home PRO’s - Deal Analysis? - Posted by ScottB-NC
Posted by ScottB-NC on January 23, 2002 at 20:39:00:
To set the stage here…
I am in the SFH business in NC and buy most of my homes sub. 2. I got a call from one of the girls at the company I use for my answering service (she answers my calls)and she wanted to know if I could help her with a mobile home. I said sure, what’s the situation? Its kind-of unusual as far as mobile deals go that I know of and I need your input.
Here it is… It is a 14 x 80, 2bed 2 bath '96 Fleetwood Vogue in great condition in one of the cites largest mobile home parks. (I’ve not done any Mobile home deals yet but read both of Lonnies books several times) She bought it new in '96 and financed it for 30 yrs. It has and adjustable rate (now at 9.7%) and a payment of $230. Lot rent is $205. Total payment with taxes and insurance and lot rent is $480.
Here’s the interesting part. She owes $25k on the loan and knows she is upside down in it and wants to begin to work a solution to the problem and get out of it eventually. She looked at getting a double wide and trading this one in and the guy told her all he could give her for it would be $17k toward her new double wide and that he could tack the balance of her negative equity ($8,000) on her double wide mortgage. She decided she didn’t want to double wide and wants to know if she can pay me the $8,000 difference in the form of an interest bearing loan to take it! I don’t know what the market value of the mobile is (tax value of $19k) so I would need to nail down an exact amount, but this situation has me a bit confused. I’m not sure how to structure this. I could set her up with a loan at 10% for 61 months and a payment of $125/mos and make a nice positive cash flow on the mobile selling on L/O. Because it is a 30 year loan the payment is pretty low. But I guess the thing I would need to think about is what I can sell it for ($26,000) to cover payoff if my tenant/buyer actually ever buys.
This is too long of a post already but would appreciate any thoughts or help in this deal. It seems like a decent oppt’y to create a nice little cash flow for a few years I jsut want to be sure I have all my exits covered. Thanks for readiing this and taking the time to help. ScottB-NC
Re: Mobile Home PRO’s - Deal Analysis? - Posted by ScottS(NC)
Posted by ScottS(NC) on January 24, 2002 at 07:36:59:
Scott,
Hi, I currently live and deal in Asheville. I agree with John this deal is not a profitable deal compared to whats out there right now. With that said, Is this person a friend you want to help? If so this deal could be ok if you were into rentals/lease/options. I have six rentals and I do spend more time on them then my conventional “Lonnie deals” but I also profit more from them. This just boils down to do you want to help this employee enough to take on a rental, or if sold probably a very slim profit. just my .02 Take Care ScottS(NC)
Re: Mobile Home PRO’s - Deal Analysis? - Posted by JHyre in Ohio
Posted by JHyre in Ohio on January 24, 2002 at 04:29:09:
I wouldn’t take it…too many cheap repos out there right now…I’ve gotten mid 90’s 16x80’s for $7500, put $1000 of rehab into them and resold for $13,000 to $21,000. If she came up with $8000 cash, I might consider the deal…maybe.
Re: Mobile Home PRO’s - Deal Analysis? - Posted by ScottB-NC
Posted by ScottB-NC on January 24, 2002 at 09:47:37:
Scott - what do you find you’re able to get for a 2/2 14x80 on a lease option? How should I appraoach the PM? or should I just leave the lot in my sellers name and be the middleman? Any suggestions on how to approach this? It will be my first MH deal at all and I realize its not the best, but I’m all about passive cash flow right now. I don’t have the extra cash to invest in REO’s right now and to get a $150 -$200 per month cash flow for 36 months or more with no money invested are my kind of returns. Thanks for you thoughts, ScottB