Posted by PeteH(NYC) on February 11, 2000 at 24:16:10:
Could be a deal here. First thing I’m confused by is your multiple descriptions of lot rent: “lot rent is $125 which includes sewer and cable” versus “PM says the average rents range from $200 to $250/month.” Which is it?
Next question: last bid they took was for $7K and they’re only taking cash bids. Who says that was the last bid? Broker? Call every MH dealer within a 50-mile radius and ask how much for a 17-yr-old repo. That will give you a good perspective on the wholesale price for the product, and a clue as to how real that $7K bid is. (If the $7K was a realistic cash bid, it’s shocking that the finance company hasn’t jumped on it already.) The other thing you want to have a good feel for is how much you can reasonably ask for the home when you sell it with financing; you’d like to get at least double what you paid for it. So if $15K is a reasonable asking price in your market ($1000 down and $280/mo. for 6 years, if you can wait that long), which means local 2BR rents average $530/mo at the high end of your lot rent estimate, then there’s a deal to be had. Go for it.
(Incidentally, you’d have a much better feel for how this deal should pan out if you read Lonnie’s books. I won’t be the only one to say so. Educate yourself before you risk drowning yourself.)