Posted by Tony-VA on December 02, 1999 at 04:48:20:
Lonnie’s rule of thumb is just that. It is not carved in stone. If the numbers work out and you think you can market it, there may be a deal there.
I would look around and make certain first that you can market this home. Find out how much the current renters are paying to rent the home. I have found that I can often sell it to them for less than they are renting.
I personally would not buy a home with renters in it. I would let that problem remain with the current owner. I would let them know that I am not looking for rental property so I do not want any tenants in the home when I buy it. I will not take possession unless it is vacant.
The current renters may or may not be good candidates for buyers. I would hazard a guess that since she is selling the home, they may not have been great renters. Plus, they know how much she is asking and if you buy it for a low price and then try and double the price to finance it to them, you may encounter some friction.
Be careful that you are not trying to “fit the round peg in the square hole.” I know that it can be hard to located your first mobile home that is in Lonnie’s price range. A home as old as the one you are talking about could be hard to market. It is old, probably 10’ or 12’ wide, and only 2 bedrooms. These can be hard to move. If the only thing that is attractive about this home is that the owner is only asking $2500, move on.
With continued park driving, you will find For Sale by Owner signs asking anywhere from $6000-$10000. These are their dream prices. Eventually the owners will get tired of paying lot rent on two homes, or have already been unable to keep up the lot rent so they are facing eviction. The key is to look for the Motivation in the seller, not the asking price. The asking price typically means nothing when the seller is motivated.
You may have found a motivated seller but the home and circumstances may not be worth your effort for this particular deal.
If you remain interested in this home, use the circumstances to your advantage. Let the renters keep driving the owner nuts. Let the owner have to go through the eviction process. Let the owner get so sick of being a land lord that they cannot wait to get rid of the home. Let them have to make a couple of lot rent payments out of their pocket. Then they will be ready to sell and it won’t be for $2500. It will be at your price which I would suggest be at least 1/2 of that.
Best wishes for your success,