Posted by Ray (MO) on April 09, 2006 at 19:21:36:
The problem with your chevy example is, trucks move easily. M.H.s can move but it is costly and difficult. I’ve considered selling my own vehicles for full retail on payments but I chicken out when I think about the repo process. Otherwise your on track. Lonnie states this very principle in one of his books.
Ray
over/under on mobile homes - Posted by Rob (IA)
Posted by Rob (IA) on April 09, 2006 at 12:10:05:
I just had to say something about this whole subject of having a note on a mobile home that is valued more than the MH is worth, and if the note holder is willing to accept none payment on this note. As I understand it, about 95% of the deals that are talked about in this room and the entire basis of lonnies book is about buying MH’s cheap and selling for more. With this in mind, are we really selling MH’s? Or is it something else. To put it into perspective I ask this. You see a 1977 chevy pickup for sale for $100, you buy it and wash it, maybe put in a seat cover and you then put a for sale sign in the window that say “for sale: owner financing”. You then turn around and sell this truck for $1,000 dn and $250/m X 12/m, what is that truck worth? If you then get payments on the truck for 4 months you have made a total of $2000 - $100 (purchase of the vehicle) = $1900, and you have the truck once again sitting in front of your house.
I ask is it really any different for MH’s? Or is there something else? We are all trying to “sell” MH’s but do we really want them to be bought outright? Or do we want our MH’s back? I would venture to say that the majority would be real happy if they could get thier money back and an extra couple thousand off of a home and then get it back to start over again.
So really I guess the point is that any MH is just the “vehicle” to make money, so wether it’s 1 or 10 different ones, it’s all just a way to make money and have it keep comming in.
Best reguards,
Rob
Re: over/under on mobile homes - Posted by Heath Girod
Posted by Heath Girod on April 10, 2006 at 07:40:05:
I can tell you did not read the first page of the 1st book, Loonie explains it all. Yes, he mentions vehicles or any thing else you could sell for a note.
Heath
You blew the lid off Lonnie Deals - Posted by Karl (Oh)
Posted by Karl (Oh) on April 09, 2006 at 13:26:47:
Rob,
I’m not sure what point you’re trying to make. Yes, we buy homes cheap for cash from motivated sellers, and sell them for considerably more by offering financing to the credit challenged. I don’t think we necessarily sell them for more than they are worth. But the private financing definitely adds value. I sell homes at “full retail” with a minimum downpayment, and discount off of that for bigger downpayments, or all cash. But even cash sales can make nice money, if you buy the homes right.
I would love to get every home back right before the loan paid off. Thats no secret. Who wouldn’t? A lot of my homes come back to me, sometime sooner, sometimes later, and it usually makes me more money the second, third, fourth time around. You’re absolutely right, mobile homes are just a vehicle for making money. Isn’t that the goal of any business?
I’m not sure if you had a question, or were just figuring out a beautiful part of this business. But you’ve got a good handle on what we do here.
Karl Kleiner
Close but not quite - Posted by Rob (IA)
Posted by Rob (IA) on April 09, 2006 at 14:08:10:
No, you are right, I was just commenting on some of the other posts that I had read about being in this business and the “what happens when they don’t pay” scenerio. I was just trying to comment on how I see that as a good thing, and something that should be taken into concideration when your figuring your deposit and monthly payments. Ultimatley I think that’s the most important aspect to this for limiting risk. Get your investment money back as soon as possible to limit the risk of default. Everything after the investment money is back is the “GRAVY”.
So thanks for the help on claification,
Rob