Very First Deal in the Making - Posted by George

Posted by Kristine on June 01, 2000 at 15:15:20:

Something like this. Really depends on your paper, how much it costs and how many other ads for mh’s there are. I used this:

WILL FINANCE 2BDR mobile home in family park. Low down, $300 per month, 5 yr terms, no interest. Call

The one thing I would add, though, is space rent amount. So many of the potential buyers in my market aren’t looking at purchase cost at all, what they really want to know is total monthly housing cost. Even though the park I am trying to work in raises rents at every change of owner 15%, there is a cap at $335, and that’s what I have to tell everyone when they call.

Also, lots of people have pretty bad credit and won’t qualify for the park. There is no co-signing or renting in this park. So I also have to tell them the PM’s rules for qualifying (income 3x lot rent, no serious collections or BKs, no evictions). This eliminates about half. But there seem to be good buyers left over and I feel pretty confident I can get some of them through. I did have to to convince the PM that I understood her qualifications and wouldn’t waste her time with applicants who wouldn’t qualify. Also, I had to qualify, which was fine. I’m hoping not all PMs are like this though.

I tell the callers on the ad that the one in the paper has been sold and I will have another sometime in July. Hopefully that will give me time to put it all together. Everyone wants a call back when I am ready to show it. Guess I better buy one!.

Good luck. Sounds like you’re jumping right in. Probably the best way to do it.

Keep us posted.–Kristine

Very First Deal in the Making - Posted by George

Posted by George on May 31, 2000 at 14:40:50:

While waiting on Lonnie’s book to arrive…
Am working on my first deal and would greatly appreciate any input from all of the many experts out there.
Looking to buy a 1990 14X80 Fleetwood 3BR 2BA
MH is in good shape.(might need 500.00 worth of work if that)
(no washer/dryer but has the hookup)
Lot rent 204.00 (includes water, garbage pickup and sewer)
No RENTALS allowed in the park-MH OWNERS ONLY
Seller bought the home new in 1991.Has lived in the park since 1991
Last August (1999)he bought a HUD house and moved out of the MH, since he cannot rent the MH he has been paying lot rent (204.00) per month and mortgage payment on the vacant MH plus his house payment etc.
He is motivated to sell.
Wants 12,000 for MH but told me the payoff is 10,000 and he would take 10,000 payoff.
MHP has pool,laundry room, etc. about 180 units
Mrg of park is very strict about cut grass,noise,jacked cars etc.
I have the cash to pay off the unit for him.
The MHP Mgr will require me to sign a month to month lot lease (204.00) per month even if I sell the home. (She wants me responsible for the lot rent)
I can pay the (204.00) per month lot rent.
I am looking to sell the MH on a 16,000 note which would state the potential future buyer will pay me the lot rent(since I am responsible for the lot rent I will get it back from the homeowner with one monthly payment to me for home and hot rent)
Am I going in on the front side with too much in the home at 10,000(±)
How much do you think I can realisticly expect in payments on a note?
To be sure I am only paying the payoff can’t I request the payoff numbers from the lender and make the check payable to the lender?

dumber than dumb in this arena

Re: Very First Deal in the Making - Posted by Kristine

Posted by Kristine on May 31, 2000 at 20:21:09:

I would be very interested in knowing why your seller hasn’t already sold? Has it been on the market? Also, why is the PM making you responsible for the rent after you sell?. I think some of the experienced people on this board should be able to address this one. Seems to me that financing the mh is the same whether it’s you or the current lender. Also, if there’s no renting, why is the PM making you responsible for lot rent, and then letting you sublet it to a buyer? Seems a little odd…

I am looking at the same kind of numbers for my first deal(s). I decided I didn’t want to proceed unless I could mark-up 100%. I ran a test-ad (see posts below for good ideas about this–also Lonnie’s book) last week and I have calls everyday from people wanting to pay $300.00 per month on 5-year terms instead of finding the 10K to buy the homes outright. It has been very educational. Lots of people don’t have access to funds, but can make a payment. A few people have even asked me buy certain mh’s, knowing that I mark-up 100%, because it’s the only way they can get a home in this park. Several people have commented how great no interest is (in my test-ad) and know that I am marking them up 100%. I would think that they would see a little interest in there for me somewhere… My point is that there are people who do what we do and people who want to pay for a place to live.

Good luck with this. If this deal doesn’t work, there are others. Keep us posted.



numbers… - Posted by chris_wa

Posted by chris_wa on May 31, 2000 at 19:51:41:


first, congrats on your taking the plunge into this biz. i am sure you will find it to be extremely lucaritive if you stick to lonnies plan and modify it somewhat for your area. In my area, 10k would not be a bad investment for that year mobile. let’s take a look at the numbers here.

amt inv 10k
assume one month lot rent 204
fix-up $500(your estimate)
ads??misc title???etc…say 100
total invested 10804

ok say you sell for 16000 with 1k down and 300 month for 72 months at 12.75

your yield would be around 30.80% not a bad return on your money. but, let’s take a look at it a different way

take that same 10k in my area and you can buy AT LEAST 3 mobiles. so lets assume that i have bought each one for 3500(ok not exact) all inclusive. i know a mid 70’s model here will bring me a minimum of 7500(and that’s in fairly rough shape)

so plug similar figures say 500 down(usually can get more) 250 month 12.75 % at 37 months…let’s see what we get…

my calculator spits out a yield of 93.83% !!! per deal.

personally, i like these numbers much better for several reasons. first, as you may have noticed…i will get my entire investment back in a relatively short period of time compared with your numbers. second, i am spreading my risk over 3 deals as opposed to one. what if your guy stops paying? you will be paying lot rent out of your pocket where my ten k investment will have the other two units to cover it. maybe you could get a higher monthly payment on your one deal. so what if you got 500 per month? well, that would increase your yield…but you are still making 250 less than me each and every month.

i guess it is a matter of personal choice. if you have bags and bags of money to spend and need to utilize those funds then i would say take what you can get. but if you are looking for stronger yields with higher returns…follow the plan outlined in lonnies books. i would suggest you get to know your market inside and out, read lonnies books, and formulate a plan that would suit your needs. personally, i would pass on this deal…

Re: Very First Deal in the Making - Posted by George

Posted by George on June 01, 2000 at 07:29:27:

Thanks for your questions about the PM and wanting me to be responsible for the lot lease etc. The PM is a little strange as a person. I believe there is a hidden adgenda with another home in the park that she owns which I wasn’t interested in…anyway I wasn’t comfortable with the setup but didn’t know enough to at least ask the question why should I be responsible for the lot rent when I am the lender…As I said in my earlier post I have no trouble jumping into something…it’s the extraction process that gets me. Hopefully with guidance from you folks and Lonnie’s material I won’t shoot myself in the foot too bad before I manage to make some money!
Thanks again,

Re: numbers… - Posted by George

Posted by George on June 01, 2000 at 07:20:17:

Thanks for the input! I just received Lonnie’s Book Making $ w/MH and concur with your numbers of 3 vs 1. I am the type of person that charges out there and stirs up the water just to see what is going on. Many times my lack of fear leads me to deep water when I don’t know how to swim! Right after I finished the first 21 pages of Lonnie’s book I immediately called Lonnie and ordered his other book DOW as well as his home study course. He is shipping them out today! He is really a great person and extremely helpful. Give me some time to get my head straight with working in this arena and I may know what I am doing before next year is over. Thanks again for your comments they were great!

Excellent Post Chris! (nt) - Posted by Tony-VA

Posted by Tony-VA on June 01, 2000 at 05:07:54:


Re: numbers… - Posted by Kristine

Posted by Kristine on May 31, 2000 at 20:24:40:

Sorry. I forgot something. Why not run a test ad with payments for $20,000 and low down. See what your market can bear.–Kristine

Re: numbers… - Posted by George

Posted by George on June 01, 2000 at 07:31:20:

How would such an ad be worded?