Posted by mbrother11 on March 06, 2001 at 16:31:17:
Thanks for your response…I may eventually have to finance it myself, and I’m sure your suggestions will be helpful. (Please forgive me for being so pessimistic again, but getting restitution from folks who default and trash your place is pretty difficult, event with lawyers…it’s the old ‘you can’t get blood from a turnip’ syndrome.) But at least your suggestions help push the odds my way a little.
need to sell MH in madison WI - Posted by mbrother11
Posted by mbrother11 on March 03, 2001 at 23:11:22:
trying to sell my previous home, a 1990 3bdrm/2bath in a park in Madison, WI. Have had many calls (50+), shown it 20 times, accepted 6 offers …all 6 were refused by Conseco & by 20th Century…these companies don’t even notify them, they have to keep calling back…any of you folks financing MH’s in Wisconsin?
buyer financing problems - Posted by BilLW
Posted by BilLW on March 04, 2001 at 09:22:55:
You didn’t mention if your home was free and clear or not. If so, have you considered financing it yourself?
BillW.
Re: buyer financing problems - Posted by mbrother11
Posted by mbrother11 on March 04, 2001 at 10:07:49:
Thanks for your reply. Yes, we own it free and clear and we have considered financing it ourselves. However, we have been warned by many people not to go that route…since you do finance MH’s, perhaps you can give me a different perspective…my greatest fear
is that I finance it for a complete stranger, then they default on loan and it costs me $$$ to get them out, and I get back a trashed home costing thousands to repair and I’m right back trying to sell it again
and paying more lot rent while I do so. Call me pessimistic, but this sounds like a very possible scenario. Reading all the posts on this board, I see very little mention of deals that ended badly.
Re: buyer financing problems - Posted by John/Indiana
Posted by John/Indiana on March 05, 2001 at 09:36:02:
I’m far from knowledgeble in this area and you will learn plenty from these folks…So heres my 2 cents : You’re making nothing on it now,plus your still paying lot rent.Get a down payment,get some cash coming in.Have your contract drawn up so if they’re late on the payment,they pay a DAILY penalty after say,5 days.Have the contract worded so they are responsible for lot rent,utilities,upkeep,insurance.As for kicking them out,having to repair,etc…all this is not as difficult as it sounds.Thats why theres small claims court,sherrifs etc.Also have the contract worded so if they are,say,2 months past due on the loan(it is after all a loan,and they are buying,not renting,remember)they are to vacate the premises,notify you of such immediatly,and return keys,etc.Include a clause that requires them to carry home insurance,with you payable as the mortgagee in case of fire,storm,etc until the loan is paid…in other words,cover your butt.This may sound cold and cruel,but IF THEY DO GO BAD ON THE LOAN,you get the place back,regardless of damage,and you can then resell it to someone else.If this sounds too complicated,this is the simple version.No,its not hard hearted,its just good business sense.Run a credit report on the next person who makes you an offer.
How much are you asking? How much do you want down? Are you being realistic? Order a copy of Lonnies book “Deals on Wheels”, its about $30,you’ll have it in a week,and its worth 10 times its price,minimum…Remember,your not the landlord,your the bank.All maintenance is their responsbility,not yours.This way,if they do go bad,you have some legal recourse.Also include a clause they can’t move the home until your paid off.Remember,you’re making nothing now.NADA.With a good down payment,and checking out the buyer(not that hard to do),you’ll at least have some income,instead of a negative cash flow,which is what you have now with lot rent,utilities,insurance.Make money,don’t spend it.Yes,the possibility exists they’ll go bad,but in the meantime you’ve earned some cash,and will earn more when you get it back,because it will be the same cycle,down payment,etc…If you desire to be real hard nosed,include a clause that you can inspect the premises with proper notification(check your local laws,lol)and if the property is neglected,have the right to foreclose and evict immediatly,if they are in arrears.Its your laon,you can phrase it your way.Conseco has 7,000 manufactured homes repo’d at this time,Greenpoint also has many.They would much rather finance one of their homes to your buyers instead of yours,ya know? Hey,fellow posters,am I doing okay here? I’m new at this too…Good luck.Sadly,regardless of how nice,well maintained your home is,somethings only worth what someone can pay,or is willing to pay.Better you get the money,with interest,than the bank.Make your repayment terms for only a few years,rather than long term.Say 2 to 3 years,thus the balance will decrease much quicker and your possibility for a loss decreases.Feel free to disagree.John.
Re: buyer financing problems- Looooong One - Posted by mbrother11
Posted by mbrother11 on March 05, 2001 at 22:21:18:
Thanks for your response. I totally agree with everything you say about lot rent, getting NADa, etc. However, I have been burned by tenants, and once sold a house, got $1600 down payment, never saw another dime, cost thousands to evict her, and she did $10000 damage to house…now I know you guys all say this mobile home thing is better than being landlord, or selling houses, etc., but here’s my gut feeling …I do not want to be seller AND financer, because regardless what my legal responsibilities might be, I know the buyer will move in, get quick case of buyer’s remorse and decide that every little bit of maintenance is a valid excuse for not paying on their loan…had a prospective buyer ask me to finance the mobile home…when I asked him if he needed 30 days to give notice to his landlord, he went on a 20-minute diatribe about how he was gonna stick that guy because he saw a mouse in there…think I want to trust him?
(Sorry if this is my little diatribe here, but I want you to understand…I’ve had numerous single divorcees want to buy on time, but they all got in money trouble because of health problems, car breakdowns, lost wallets, you name it. Now I think I’m a pretty compassionate person, but I have to live through my own problems, I can’t also shoulder theirs…but experience has shown me that that is what they want…can’t pay, baby’s sick, mom’s sick, husband’s sick, etc etc etc. So, bottom line is, I’m willing to take less if someone else wants to finance, so buyer sees it as an arm’s length deal – not as 'that lady that sold me this house and now rudely expects money for it…I’ll just squat here till she evicts me, then I’ll wreck it …are you starting to see why I’m not so sure that losing lot rent is the worst fate that could befall me. I do see your point, but like I said I’m still hoping for a ‘middleman’. SOrry went so long
Re: buyer financing problems- Looooong One - Posted by Matt G
Posted by Matt G on March 06, 2001 at 12:47:24:
mbrother11:
I do see your point, and even though I am also a newbie at this, I would think that there is action that can be taken amongst people described in your post, for starters, a good background/credit check will verify you have good people in front of you. Also get a list of references from the perspective buyers, I don’t know for sure but there has to be some kind of law that would protect you against people trashing the place, if they do track them down through their ref’s and if at all neccessary sue them for the damage and tack on time and legal expenses. (All you seasoned investors maybe you could tell me if I am right or if anything I said makes any bit of sense to you)
Also one thing I have learned thus far, make sure you get out and find yourself a good lawyer, get to know them real well, because this is a gamble, (a high cost gamble) and you will want some one on your side in the event this takes place.
Good Luck in your future investing
Matt G