Posted by Tony Colella on March 22, 2006 at 11:10:33:
At some point it might be a good idea to review Lonnie’s book. We all seem to go through a phase early on in these deals when we think, “Lonnie’s system won’t work here so I will have to adapt.” This is shortly followed by the worst deal we ever do.
Lonnie’s system may look simple but I assure you that it is a simplified documentary of what has worked AFTER much trial and ERROR.
You want to pay $15k for a home that will retail at $19K? Remember Lonnie’s rule of double your purchase price (or in many cases triple).
You are buying from a lender (repo) yet the park is saying they own it? Not sure what is going on there but something is amiss. Sounds to me like the bank has repo title to the home but has an agreement with the park that if they sell it they will get a commission. The park marks the home up and markets the home. You are cutting out the middle man if you deal with the repo lender (although this may not endear you to the park but read on).
Next, you are attempting to gain access to a park that is selling homes. What do you offer them accept a greater lot rent fool (no personal attack on you… the greater fool theory is a real estate term). We read here time and time again how parks that also sell their own homes deter buyers from buying investor homes while rerouting them to the homes sold by the park (and why not, it’s their playground). This can leave you holding the bag (and paying $15k plus lot rent for the pleasure).
Don’t become a motivated buyer Les, it really, really hurts the wallet. Hang in there and stick to Lonnie’s system that will keep you and your investment safe.