Posted by icetime on January 22, 2000 at 21:13:15:
Thanks for your comments. Like the way you backed into the Price. Makes sense to me.
Newbie questions on first Lonnie Deal!! - Posted by icetime
Posted by icetime on January 22, 2000 at 20:12:48:
Just read Deals on Wheels. Looked at several MH’s. Most promising is 1977 2/2 70x14 in nice park w/pool. Lot rent $290 a month (high even here). They are asking $4,500 but will take $4,000 maybe less (probably $3,000 - $3,500). This info is based on drive-by and conversation on phone. Set appt. to see inside tomorrow. You experts out there what do you think? Too much for 1977? Lot rent too high? Just making excuses…what? Thanks for comments.
Re: Newbie questions on first Lonnie Deal!! - Posted by Bill K.- FL
Posted by Bill K.- FL on January 22, 2000 at 21:19:52:
Since this is your first deal don’t rush it. You fail to mention whether you have a large inventory in your area. Assuming you do, I prefer, as Lonnie suggests, not to buy one over 20 yrs. old. How did you find this one? Newspaper ad or sign. Ads cost $. How long have they been trying to sell? Why are they selling? I’ve seen them start at 6000 and lower to 2500 after a couple of months. What is your plan?
Hold the note, sell the note? What do you think you could get for the home with good terms? Figure out what you want from the deal so you will then know the most you should pay. Reread each section of the book before you do that phase. Oh, and don’t forget to check for them holes in the floor under the windows and doors now. Have fun. You are doing them the favor.
Re: Newbie questions on first Lonnie Deal!! - Posted by Tony-VA
Posted by Tony-VA on January 22, 2000 at 20:54:51:
Always glad to see more Lonnie investors. As for buying price, I suggest you base it on selling price. I determine selling price by what the park is renting similar homes for or what comperable aparments are going for in the area.
Say for instance that a comperable home or apartment would cost $490 per month. Subtracting lot rent, you would say that $200 per month is a fair payment. This would be my target number.
Then when negotiating with the buyer I would of course try and get the most downpayment that I reasonably can, a work the number of payments out so that my yield is in line with Lonnie deals.
I don’t have a calculator in front of me right now so for argument sake, say that you decide that with a $500 min. downpayment, $200 per month and 36-48 months of payments you get a present value in the $7,500 range. Then take at least 1/2 that and use that as the max that you will pay. (I highly suggest that you use lonnies negotiating techniques to get you a price much better than that, but at least this should give you a start.)
I cannot impress upon you enough how important it is to stick to lonnie’s book. Those lessons are tried and proven. I have proven some of them myself the hard way, that is, by not following them. Everytime I find that things did not turn out as well as I had planned, I review this book and my error is right there in front of me.
As Terry Vaughan says…“Stick to the … Plan!”
Best Wishes for your success,
Tony-VA