Re: REPO mobile home with Unpaid rent - Posted by liz


#1

Posted by jp(sc) on November 01, 2005 at 07:05:15:

nt


#2

Re: REPO mobile home with Unpaid rent - Posted by liz

Posted by liz on October 29, 2005 at 22:14:22:

Dear friends,

we want to buy a older mobile home in a nice park. The mortgage company Repossed this home due to nonpayment. And they told us that we need to pay any unpaid lot rent or taxes. Mortgage company said unpaid lot rent $175. But I just called the owner of the park today and he said $1000. Anyone has similar situation and can share options to do for the next step, thank you very much


#3

Re: REPO mobile home with Unpaid rent - Posted by Tony Colella

Posted by Tony Colella on October 30, 2005 at 08:56:57:

This is common in almost every mobile home deal in a park (aka Lonnie deal).

We simply build the price of back lot rent and taxes into our offer. For example, let’s say we don’t want to pay more than $3,500 for the home. We deduct the $1,000 the park wants for back rent and then the taxes (let’s say $100 in taxes). We would then offer the repo company less than $2,400 with the idea that we will probably have to counter offer up to but not more than that price.

One way to save a great deal of money will be to buy the book “Deals On Wheels” here by Lonnie Scruggs. It will run you about $30 here but will save you thousands on this first deal alone.

Ideas such as negotiating later with the park for less than the $1,000 will quickly pay for the book.

Good Luck with this deal.

Tony


#4

Re: REPO mobile home with Unpaid rent - Posted by Liz

Posted by Liz on October 30, 2005 at 12:15:03:

dear tony, thanks for your quick resonse. We did buy both of lonnie’s books.

Have you ever try to negotiate the rent down with the park owner?


#5

just did it yesterday - Posted by Steve-WA

Posted by Steve-WA on October 30, 2005 at 19:43:55:

actually, a week ago I talked to a park owner about the two months back rent and upcoming November on a place that the son was trying to sell after dad moved to assisted living. She agreed to let me out of half of it, so I would pay 1 1/2 mos instead of the three. Met the guy yesterday, used it as a negotiating point to get a MH for 3K that will sell, after $500 in fixup, for 16 to 17K.

So my basis will be the 3k plus about $400 in back rent, instead of 265x3, and the ~$500 fixup (pressure wash, new front door, ceiling repair, one new tub and two new tub faucets)

BTW, see new post on ceiling repair.


#6

Re: REPO mobile home with Unpaid rent - Posted by Tony Colella

Posted by Tony Colella on October 30, 2005 at 12:58:23:

Absolutely. In most cases we received a generous discount on lot rent owed but this was after we were established in the park and had proven to be an asset to the park.

When dealing with the park managers it is important to try and get them to understand that you are interested in buying the home but the amount of lot rent owed is too high. If they would be willing to work with you on the lot rent owed by the repo company and the old tenant, then you can get the lot rent performing for them. If not, they will continue to have a vacant home paying no rent with no end in sight.

A good park manager or owner will understand the importance of cutting the losses in favor of getting the lot rent performing again. A greedy owner or park manager will cut off their nose to spite their face and by being unwilling to budge on the back rent, will not receive new rent.

Lonnie’s books a great a teaching negotiating mobile home and working with park managers. Stick to the book and you will do fine all around.

Best Wishes,

Tony


#7

Re: just did it yesterday - Posted by Nate-Wi

Posted by Nate-Wi on October 31, 2005 at 16:41:55:

Steve,

Must be nice to be in a market where you can buy for 3K and sell for 16K.

Nate-WI


#8

Re: just did it yesterday - Posted by jp(sc)

Posted by jp(sc) on October 31, 2005 at 16:52:24:

I was thinking the same thing. That’s a heck of a spread. I can sell for twice what I paid but Steve is really raking it in!


#9

Re: just did it yesterday - Posted by Nate-WI

Posted by Nate-WI on October 31, 2005 at 16:59:16:

I hear ya JP. I can buy and sell for triple the amount and it still only puts me in the 7-8K range. Maybe I need to raise my prices :slight_smile:

Nate-WI


#10

Re: just did it yesterday - Posted by Steve-WA

Posted by Steve-WA on October 31, 2005 at 17:48:52:

yes, raise your prices. Yours are going up, aren’t they?

Tip - the laminate adds 2K

!!


#11

Re: just did it yesterday - Posted by jp(sc)

Posted by jp(sc) on November 01, 2005 at 06:18:59:

Steve,
On the recent purchase, how much would you settle for if the buyer had all cash? I think that might put it into perspective. I’ve been basing my sale prices on what other used home dealers are selling for and also the tax assessed value of the home. Usually this is about all the market will bear. With the “how much down and how much a month crowd” I could probably get away with a little more, but nothing like what you have done. That is unless I can find a way to buy less than 5 year old 16x80’s in good condition for under 5k.


#12

Re: just did it yesterday - Posted by Nate-WI

Posted by Nate-WI on October 31, 2005 at 18:30:15:

Nothing would make me happier than to raise my prices but the market dictates how much I sell them for, know what I mean? For instance there is a very nice 76’ MH in a park where I just sold the home across the street for. She wants 10K for it and she’s still sitting on it. Now maybe if I had it and were offering owner financing then maybe its a different story. The good thing for me is my prices have not gone up just cause if I can’t get them at a “steal” I pass on them. But I still may try to raise them for craps and giggles.

Nate-WI


#13

tony makes a good case - Posted by Steve-WA

Posted by Steve-WA on November 01, 2005 at 10:57:36:

truth is, I can ask what I do because that is my market.
Lots of people ask, “How much do I charge for a place I bought for 2K? Follow Lonnie’s example of 4K?”

Go this way - what are comp apartment rents? If you don’t know, find out. AND ask your buyer what they are paying for rent, or what they would be paying. Then you have the PMT amount. Interest should be a given (of course, it is negotiable), and then you need to figure how long you want the payment schedule to run. This is the touchy part; buyers want to see a light at the end of the tunnel. Eye candy improvements can help to extend that term, thus raising the price, if that is what you want, or if that will help sell quicker (laminate floors, ceiling fans, new lino, new light fixtures, etc.) So I go with around 4 or 5 years, plus or minus.

This particular buyer said she wanted $550 payments, and that worked out to 42 months. Less than 4 yrs. Everybody happy.

Cash? Well, I’d be happy with double my money, but why? Market would put it higher, so I’d make it higher. 10K? Probably, but is that my starting bid? No. AND, I don’t really want cash (well, yeah I do, every once in awhile), I want the income. A 3/2 will ALWAYS sell on payments, and for a good profit. So why should I take a cut? He// the dealer could sell a Lexus for cost, but why should he? He has a product that has a high demand, so nmeet the demand, and take that to the bank.

Yes, you will monkey around with the taxes, but in the en you will pay. As a speaker I heard once said, I yearn for the day that I am paying 1m a year for taxes (I think it was LeGrand), because what does that say about how much I am making?


#14

Re: just did it yesterday - Posted by Tony Colella

Posted by Tony Colella on November 01, 2005 at 06:55:48:

Creating higher prices has been argued here for years so I won’t go into all the pro’s and con’s but two things to keep in mind are the reality of buyer turnover (repos) and taxes.

Creating high purchase prices with a low basis in the home … reality is you are going to write a big check to the IRS for money you have not yet received. Yes, Hyre’s aggressive tax method can help curtail the blow by extending the taxes over time but the hit is still a reality.

Then your buyer makes a few payments, maybe a year and bolts. Now you have to start all over again.

I would look at each deal before simply raising your prices because Steve has done so on the West Coast.

The reality of buyer turnover for me usually meant I would sell, repo and resell a home 3 or 4 times before it ever fully paid off. Trying to nail the first buyer with a higher price would have, in my opinion been fruitless and tax heavy.

The reality of life was I was getting the same payments over the same amount of time… just from different buyers.

Remember, price is but one of the variables in making money. Use all the variables to your advantage and you will come out fine on the deal.

Tony