Posted by Steve W (WA) on January 18, 2002 at 14:17:59:
>
Better check with the PM! It may not be there to stay!
A good standby rule I have picked up is to verify that the home can stay.
'Course, that’s in the books!
Quick question on basics from a beginner - Posted by Tim Herda
Posted by Tim Herda on January 17, 2002 at 22:52:41:
Im sure this question or the like has been asked numerous times on here, but Im a newby to this sight and to investing.Now Ive read a good lot of the articles and see these deals where you buy the MH for $XXX and sell for $XXXX. I can understand when you get the inside scoop from mangers and such but how about other methods. For example there is a MH in the paper this week with porch and barn for $800 If I bought it and turned it around why whould someone buy from me at a higher price when they wouldnt have bought from the guy in the paper??? thanks in advance
Re: Quick question on basics from a beginner - Posted by CAW
Posted by CAW on January 19, 2002 at 04:36:21:
Tim, I will tell you a little secret: some people just aren’t very smart about money. For some reason they can’t understand that their rent is enough to make a house payment, and they are making my house payment instead of their own.
They can’t figure out how to save up a down payment, which means they can’t figure out how to budget their money.
They don’t seem to care about price or understand about interest rates; they only consider what the monthly payment is.
The ones buying a MH on time are smarter than the ones who are renting an apartment. At least they will own something when their payments are all done, and after the MH is payed for, they will have very cheap rent.
But just because it is obvious to you that the $800 MH is a better deal than the same home for $300 a month for 24 months, that doesn’t mean that everyone can see that. It doesn’t seem to have anything to do with intelligence or education. Some people just understand money and some people just don’t.
Many people will not make any extra effort. They want their purchase all wrapped up in a ribbon and everything done for them, so all they have to do is buy it with no effort and start writing checks.
The truth is that you are providing a huge service by using your time to find the homes, make arrangemts with the PM, and do the paper work. The people who buy from you on the easy, make-no-effort, sign-up-for-monthly-payments plan are actually much better off than their friends who pay rent. And they probably wouldn’t buy unless the whole thing was presented to them as a very easy deal.
Re: Quick question on basics from a beginner - Posted by lyal
Posted by lyal on January 18, 2002 at 14:05:09:
Tim,
I have bought a few homes from newspaper ads at close to the price they were asking but I know my market. In most cases, the ones you see advertised in the paper are worth either what they are asking or less and if you buy them, you’ll just be making someone elses problem yours. Be very careful.
Do NOT look for homes. As Karl says, look for motivated sellers and you will find your deals.
In any event, go look at this one even if it’s only for practice but feel out the seller and see exactly why they are selling. If they are under no pressure to sell (job loss, divorce, making payments on another home etc.) it’s likely not a deal.
In any event, if this is in a park, take the opportunity to check in with the park manager and get an idea how they are to deal with.
Look forward to hearing how you made out.
All the best, Lyal
Quick answer - Posted by Karl (Oh)
Posted by Karl (Oh) on January 18, 2002 at 07:15:46:
Tim,
Here it is in a nutshell. Motivated sellers usually need cash for their home, and some sellers can be convinced to drastically discount their sell price if cash is waved at them. On the other hand, most buyers don?t have enough money saved to buy a trailer outright, but they can afford a small downpayment and a low monthly payment. And they?ll gladly pay more for the home if financing is provided. Those two facts combine to make this a profitable business. Buy low for cash, sell high with financing.
Now lets assume that the trailer you?re talking about is inhabitable, and the seller is motivated ($800 already sounds motivated to me). Do you think you could show up waving $500 or $600, or even less, and get a better price? Now what if you offered to sell the trailer to a buyer for $100 a month for 12 months. Do you think you might have more luck finding a buyer than the guy who was asking $800 cash?
Of course, on the down side, if you don?t understand your market, you can certainly lose money if you buy the wrong home. Maybe this $800 trailer would be a bad deal even if the owner gave it to you. That?s what you would have to determine.
To really understand this business, you need to read the book Deals on Wheels. You can buy it for $30 on this site. Its probably how most of the investors here got started. All of the posts and articles are supplemental to the information provided in the book.
Karl Kleiner
Re: Quick question on basics from a beginner - Posted by Indiana Bob
Posted by Indiana Bob on January 18, 2002 at 05:59:13:
Tim,
A couple of ideas/questions. Have you called on the mobile home yet? In my area, if something is priced that low, they usually want you to move it.
As far as selling, you’re right, many people would just buy it directly off of the seller. But there are possibly those people who can’t afford the $800 up front in addition to the lot rent, utilities, and insurance. If you go with it, could possibly advertise it as a no-money-down deal. One interesting side note about this method is that the calls you get for this mobile home may give you a lot of leads for future sales. Keep asking questions and get as much info as you can about each caller. Good luck.
Indiana Bob
Re: Quick question on basics from a beginner - Posted by Brian Pearcy
Posted by Brian Pearcy on January 26, 2002 at 20:05:46:
Your post reminds me of an experience I had a few years ago. I was working at the local Chevrolet dealership as a sales rep and a young man asked me one day to look at the used cars we had. I took him out to see them and as we were going along he found one he liked and I said that one will run you $200/month. He immediately said that’s too much money. I said well, what did you have in mind, his reponse-$50 a week. It’s all how you look at it.
Re: Quick question on basics from a beginner - Posted by Tim Herda
Posted by Tim Herda on January 18, 2002 at 09:22:52:
Thanks Bob I havent called but I probably will today,(annalasys perallasis) with a shed and porch I would think the thing is there to stay, ill let you know how it fares. Thanks!