Posted by Philip on August 28, 2003 at 05:33:55:
Ahhh…I remember the billboard, but not the place!
There you go…let her leg out the details before you jump in!
Philip
RENTING??? - Posted by Briton (IN)
Posted by Briton (IN) on August 25, 2003 at 08:23:01:
I have always done lonnie deals, but i have a buyer that is looking at a home today, that want to rent it. I have never rented any living space in my life. (except my dirt) I know i could get a good contract from my lawer ect. and do it. But what kind of deposit do you guys usually want. How much total money up front? I have 8K in the home, and would actually take 8K for it. (i moved it in my park just for the lot rent) So anyways what to do? The “buyer” seems weird, because i told her that she could buy it for the same monthly payment, and just a couple extra hundred bucks up front. Please advise, Briton (IN)
Re: RENTING??? - Posted by bill_cfl
Posted by bill_cfl on August 25, 2003 at 15:52:28:
b, you rent dirt now, what the diff. In my small park (44 space for mh/ 23 for rv)i love to rent units…like you i dig the money. I get first month rent, last month rent, and security of one month rent. Pets i charge a 250 non-refundable and critter has to be under 20#. My pet owners actually take very good care of units as i am one of the very few who will rent to pet owners. today i checked out www.nolo.com and ordered their forms. Also a post here had a nice form:
http://www.ago.state.ma.us/pubs/manuhous.pdf
you need acrobat to read it on page 64 or so…very nice. A word of advise don’t let any exotic dancers live there…it will ruin your life! Good luck
Re: RENTING??? - Posted by Rod - MO
Posted by Rod - MO on August 25, 2003 at 12:42:42:
Briton,
I suppose renting is Ok for some, but I personally won’t rent.
When I sell, I get more money up front in the form of a down payment to use on the next deal. A security deposit still belongs to the renter, not me, so I can’t use it. Think ‘compounding’.
A renter who doesn’t want to buy probably wants to keep their options open to move, probably before you would realize your investment.
If a buyer ‘quits’, at least I can get another down payment to cover the time it takes to sell the home.
A renter is less likely to take care or responsibility in the treatment of the home.
In the event of default, less problems reposessing that evicting, at least in my state.
Last week I sold a home where people had been asking to rent rather than buy. Rejecting the renters cost me two weeks, but rejecting the buyer would have cost me $500.
My 2 cents worth.
Rod
MORE MONEY SOUND GOOD? - Posted by ScottS(NC)
Posted by ScottS(NC) on August 25, 2003 at 09:34:30:
Briton,
I have owned an rented all the spots in my small park for almost 4 years now. I feel it has been a great experience. I have tenants that are similar to those you would find in any apartment building. My profits are much higher than someone just renting the dirt and my maintenance is less than most would think. Lonnie started out renting and used this and other vehicles to build his wealth. Briton you profess in some previous posts that hard work doesn’t scare you! If thats the case why are you selling off assets that could generate a couple hundred additional dollars per month? Do the math what if you owned and rented all the homes in your park? I look at it like when I retire I will sell off the homes and rent the dirt but untill then the golden goose will keep them eggs coming.
As for deposits I get first months rent then a security deposit equal to the monthly rent plus $25(in case they try to move out leaving me with this as the last months rent). If they have a pet I get $25 more per month and a one time $100 non-refundable pet fee. I would at least rent until my 8k is back then if you hate it sell for profit of 8k. Check out Mrlandlord.com great site for rental questions and ideas. Take Care ScottS(NC)
Are you sure about that? - Posted by Tony-VA/NC
Posted by Tony-VA/NC on August 25, 2003 at 19:14:02:
Rod,
I am quite suprised to learn that MO law allows for one to repossess easier than evicting. That is quite contrary to what most have found once they have gone through all the legal channels and compared apples to apples.
For example, it might be feasible to gain possession of the home quickly through the courts but when the defaulting buyer remains in the home, you cannot simply toss them out. Chances are you would need to file for a formal eviction process, thus increasing your legal costs twofold and possibly taking up more time.
Consider this reality. You gain possession of your Lonnie deal home which sits in a park that is NOT owned by you. Your buyer is a tenant in the park and as such has a legal claim to the property on which the home rests. By simply repossessing the mobile home, you do not necessarily void their interest in the lot. They could in some cases, actually tell you, “fine, you repossessed the home but I still rent the lot…come and tow your home off the lot I rent in this park.”
Briton owns the dirt so his idea is not traditional to the Lonnie deal way of thinking. In his case, he is in the driver’s seat and is poised (in my opinion) to apply his willingness to work a little (and perhaps not any more than he does with his Lonnie deals) and reap a long term income stream, better tax treatment and greater control over the tenant (buyer).
As for the work involved, I am not convinced that it will take him much, if any, more work than what he does with his Lonnie deal homes. Lonnie buyers damage homes. We just don’t know about it until we repossess some many months later.
Lonnie buyers move out in the middle of the night just as tenants do.
I have found that the collection efforts on my part are pretty much the same regardless if the person is buying or renting.
As for the money made, you also need to consider the tax implications (which can be quite burdensome on the Lonnie dealer) as dealer status can and does apply. Yes, Hyre has a means of cushioning the blow but it is still a blow.
Briton would benefit from the tax depreciation on his mobiles to offset some of that additional down payment you receive.
Tony
Thank you Scott…Anyone else have a view? nt - Posted by Briton (IN)
Posted by Briton (IN) on August 25, 2003 at 12:01:19:
nt
Re: Are you sure about that? - Posted by Philip
Posted by Philip on August 26, 2003 at 16:32:28:
Tony,
In my county in Missouri you serve the papers 30 days in advance of your court hearing. The judge hears the case and unless something is really out of kelter he makes a decision in the leinholder’s favor. In as little as 10 days(whatever the judge decides) the sheriff can be ordered to remove them and their belongings.
Now, that is how ONE PM explained it to me.
Seems like a long warning about the court date, and a short wait on the sheriff.
Havent had to use the system yet myself.
Rod, is this the way it works where you are at?
Philip
Re: Are you sure about that? - Posted by Rod - Mo
Posted by Rod - Mo on August 25, 2003 at 21:46:59:
Tony,
Repossession (Mo): Yes, 30 day wait after notice of default for court for repossession, 90 days for eviction. After repossession, the sherrif can be requested to remove occupants and/or their possessions not included in the terms of the contract. Of course, either way, the bribe method is better.
As for the rest, I agree, you make some very good points. For me the key is ‘willingness to work’. I am lazy. I would also be interested to see what the long term difference really is between rental income and sales/notes income considering taxes, down payments, and everything else.
Oh, one thing we haven’t mentioned yet - liability. For an owner who bought ‘As Is’ and a tenant, what are we liable for if they fall through a hole in a water-damaged floor? Anyone know?
Tony - keep up the good posts.
Rod
Re: Are you sure about that? - Posted by Rod - Mo
Posted by Rod - Mo on August 26, 2003 at 18:24:20:
Philip,
That is how the lawyer explained it to me. The only thing I haven’t added is the buyer has a certain amount of time to ‘cure’ their default, but I don’t remember that detail.
On another topic, I checked with the state Manuf. Housing Dealers office and a dealership license is $200. I was a little worried about the ‘accessible during normal business hours’ and ‘bona fide office’ requirements, but the head man told me that since I will not be displaying homes for sale they probably wouldn’t bother coming around to inspect. He also said normal business hours is whatever I post on the door and if I post evening hours only, that is OK with them. It will just seem a little strange to have a open hours sign posted on my front door. The dealers license will allow me to assign a title on a unit I buy without having to send it in for a new one, so I guess it is good for something besides keeping me on the good side of the powers that be.
Rod
Re: Are you sure about that? - Posted by Philip
Posted by Philip on August 26, 2003 at 21:15:09:
Rod,
I think the curing thing is what the judge decides during the court hearing, he sets the number of days…but I haven’t sat through a session yet.
I have only sold 3(Missouri max) this year. I want to see if l/o for the purpose of sale, in the future, will work on the next 2, which I am in the middle of right now.
I had read an old publication that said the Missouri license was only $50.00 dollars. But even at $200.00 it is worth not having title hassles. Or waiting on titles.
I might have a year here and there where I do enough to be licensed. If I find many land/home deals I may not do more than 3 or 4 lonnies a year.
I will probably add a few homes if I can, especially if the market cools down a little. I need some longer notes sometime in the future.
But Missouri’s license is very reasonable.
Tell me one more time your location in Missouri. I am in the Springfield/Joplin area.
I am bummed. We are finally having to work on a mobile because it is minor work and every handyman, service person, carpenter, contractor, and gopher is busy right now. It is just re-nailing some paneling, cleaning, and painting…but so far I had gotten by without it.
Let me know how you are doing.
Philip
Re: Are you sure about that? - Posted by Rod - Mo
Posted by Rod - Mo on August 27, 2003 at 20:04:06:
Philip,
The curing period is set by statute.
The only relevant $50 fee I know of is for a business that applies to act as an agent of the DMV to collect fees for title applications and vehicle licenses. Yes, in Mo any business can be in the DMV business if they can meet the requirements. At least you wouldn’t have to wait in line. 
But no, I am not going that route.
If you want to follow the letter of the law, make sure your l/o deals can’t be interpreted as sales, and remember that the limit is for 3 sold or OFFERED FOR SALE in any 12 consecutive months. Notice - I’m not a lawyer. Get one if you need statements to rely on.
I operate mostly in the KC area. I have contacts in your neck of the woods, so if a possible deal pops up I’ll pass it on. I am originally from the Joplin area.
I have been doing OK, I guess, for a beginner. Bought 3, sold 2, live in one. One of the homes needed more work than you are describing and the buyer was happy to pay less and do the work himself. I still made a note for about 230% yield. I’m buying a land/home setup that should close soon. I will have to work on that one, since just about everything including the breaker box was removed. At least the kitchen sink is still there, but it has no faucet. I have made deals to get most of the work done, so it shouldn’t take too much time to have it ready for sale.
My wife is eying a MHP near the Air Force Base. When it looks like she is getting serious, I’ll have to get Ernest’s book.
I make it down there on occassion. The next time I plan a trip let’s get together at Harry’s Bus Stop in Lamar and have a Big Mac in Doc’s honor.
Rod
Re: Are you sure about that? - Posted by Philip
Posted by Philip on August 27, 2003 at 20:33:32:
It sounds like you have investigated the repo matter very well. I will double check with the lawyer next time I have to pay him for something.
230% ought to work!
How big of a park are you looking at?
I did all the due dilegence for a 33 space park near Joplin and decided the return wasn’t good enough in the short term for 2 working people to add to their regular jobs.
Ernest’s book is probably great. Ray Alcorn’s book will help with the due diligence part.
Yes a Burger in Doc’s honor would be in order. But even though I go to Lamar 2 times every month, and used to go there for the youth fair…I don’t know about that particular establishment…so let me know.
Let me know how things are from time to time.
Philip
Re: Are you sure about that? - Posted by Rod - Mo
Posted by Rod - Mo on August 27, 2003 at 22:21:11:
Philip,
On Hwy 71 So there is a billboard with a like of Harry S. Truman that says 'The Bus Stops Here". Ring a bell?
The MHP is supposed to be around 150 lots with about 7 acres open for development. Haven’t seen it yet, but it sounds like too much work for me, so I’m waiting to see if she gets serious.
Rod