Posted by RobertR on December 29, 1999 at 19:28:32:
Posted by RobertR on December 29, 1999 at 19:28:32:
Need Help Selling a MH - Posted by Nancy(NC)
Posted by Nancy(NC) on December 26, 1999 at 22:17:31:
I bought a 1978 2br,1ba remodeled mobile home about 2 years ago for my son to live in while attending college in the NC mountains. It is in a park near the university there. Now we want to sell it (he graduated last week!!)and am hoping someone at this site can help me.
There are only 3 or 4 MH parks in the whole town and the city won’t allow any more and individual lots aren’t zoned for MHs now either. We looked long and hard to find one this cheap.
It looks fairly nice inside. I paid $7,000. for it and got the seller to owner finance it for 3 years so we owe 1 more year on it. (I used Lonnie’s forms…Thanks Lonnie!) We have put another $2000. in a top of the line Monitor oil heater with tank that we had installed that does keep it warm inside.
I have been running an ad in the local papers there to sell it owner financing at $10,900 but have only had a few calls and only a couple people have been to see it. Would I do better saying something like $2000 down (which is what I want - to cover the heater) and $200. a month owner financing instead of saying the price or should I keep lowering the price until it is sold? I really do want to owner finance it.
If it doesn’t sell, we may keep it and move it to another county near there and buy a lot to put it on but Lonnie’s books don’t recommend moving one that old.
What rate of interest should I charge?
Any advice or help would be greatly appreciated.
My $.02, if you don’t mind - Posted by Jacob
Posted by Jacob on December 29, 1999 at 09:29:13:
Some good tips, but allow me to add a few things. The most successful ads I have run hands down have been like the following:"250 down and 210 a month will move you into this newly renovated 2/1 14x55 in a quiet wstside park. Call Jacob at 555-5555."
No matter where we run that type of ad, it always works much better than any other we have run. I would agree to an extent about not quoting prices over the phone. I guess where I differ is that I don’t finance every deal. Unlike others, I don’t have loads of cash lying around to buy the next unit. I need the cash to do that. So, when I assist my buyers in getting financed, I must quote the price. I must also say that I have never had to drop the price of a unit 1 dime. I know what the value is ahead of time and I get it.
I guess part of the point of this is that for me, quoting terms first has worked wonderfully. On top of that, assisting my buyers in any way I can has helped as well. People appreciate it and it can sometimes be the difference between buying your unit and another one.
p.s. How are you planning on recording a lien when you sell this unit when you still owe money on it to someone else?
Re: Need Help Selling a MH - Posted by d.henderson
Posted by d.henderson on December 28, 1999 at 07:38:26:
Everyone has wonderful advice, the only thing that I can add is make sure that you get parents on the contract. Don’t let the kids be responsible if you have to rent or rent to own.
Re: Need Help Selling a MH - Posted by Glenn
Posted by Glenn on December 27, 1999 at 21:32:00:
Tony’s post was great, but I would add one thing. I have seen in books not talked about on this site, which I now forget the names of, of a way to market properties in a college town. Advertise in the college newspaper and on campus (BBs, newpaper,etc) that you have a way for a parent to have their child live rent free (or close to it). Then work out a sample purchase arrangement for them to buy your MH, and rent it to one or more roommates for the child. Child becomes resident manager (can be paid a salary - i.e. deductible allowance), roommates pay the cost (i.e. child lives free of close to it), parental visits are deductible inspections of rental property, and I think they could depreciate the property also. As Lonnie teaches, if you can get your money back reasonably soon, and then get the opportunity to take the property back and sell it again, your returns are even better, so you might include the option for the buyer (parent) to sell the property back to you in the future at the depreciated value (no recapture for them). Without running any numbers, that sounds like a win/win situation to me.
Terms and Negotiation - Posted by Tony-VA
Posted by Tony-VA on December 27, 1999 at 04:53:21:
Return to Lonnie’s material. Run an add that is closer to Lonnie’s “Will Finance” Add. Leave out the terms for now and simply advertise Low money down etc.
When you get some buyers interested, stick to Lonnie’s negotiating techniques. Don’t get caught up so much in selling price. Let the terms dictate the price. If you decide upon $200 per month, keep that number silent and let the buyer name the terms until they are at or above this price. You will be suprised at what numbers these buyers will give if we only let them. I have found that when I name a number, or jump at their first number, I always lose. It is hard not to jump once someone mentions a number higher than you were expecting.
Next advise them that you may be able to work with those monthly payments (so long as they meet or exceed your target number), depending upon how much they can put down. Remember not to jump at their first offer. At the very least try this. Say for example they say $500. You would then say, well I know that my partner (or whoever you decide to create as the “higher authority”) won’t go for that. He wants atleast (add a hundred or more to their offer), but if I could get him to agree to $600, when could you have the downpayment and move in?
From there I return to the payments. I say that we can keep the payments at the amount that they want, but we will have to run the note for 48 months instead of 36.
I find that they don’t even blink when I extend the payments because they thought that they would have to pay for longer anyway.
They are happy because they named the terms, bickered me down in the downpayment and got the payment they wanted. The feel they have won. I feel I have won. Thus a Win/Win negotiation.
In my market, it is not common to get $2000 down on an a home that old, but it is not out of the question. If you can’t get the downpayment you want, keep working the terms until you get the yield that you want. Even if you only get $500, you will have all your money back in less than 8 months and have the remaining payments as pure profit.
So don’t let the sale price hang you up. Know the terms you require and let them and the buyer dictate the final sales price.
If you get the callers that insist upon a cash price or asking price, explain that you are offering financing and ask if they will require financing. They will almost always say yes. Those that ask for the asking price are simply shopping you, in my opinion. Some will be relentless. I will finally say that we will entertain “Written Cash Offers” if they care to submit a written bid. This has been very successful in chasing away the shoppers. I do not want to give away my final price, and then have them try and work in the terms. The buyer can name either the terms or the price, but not both.
Hope this helps,
Re: My $.02, if you don’t mind - Posted by Nancy(NC)
Posted by Nancy(NC) on December 29, 1999 at 10:24:55:
Thanks for your comments and suggestions.
We don’t owe much so can pay it off and may go ahead and do that. If it doesn’t sell, and we keep the mobile home and move it, then we won’t pay it off. The note holder won’t reduce the amount for us to pay cash and pay it off so we have just been paying monthly.
Re: Need Help Selling a MH - Posted by Nancy(NC)
Posted by Nancy(NC) on December 28, 1999 at 20:05:05:
Thanks for the post and the good suggestions.
Re: Terms and Negotiation - Posted by Nancy(NC)
Posted by Nancy(NC) on December 27, 1999 at 08:34:44:
Thanks. I should have reread Lonnie’s books.