Want a lonnie deal for myself - Posted by Shaun

import · June 15, 2007, 9:43am

Posted by Tim (NC) on June 15, 2007 at 18:59:03:

As I see it, the key to this business is having enough cash to afford a trailer and buying at low wholesale while selling at retail. I’ve been told that I’ve got a grasp of the obvious, its a gift:) If a buyer has your $4k, they go and buy their own trailer and don’t need you. Additionally, if you don’t have the cash, you’re in the same position as your buyer. Its important to live below your means to save your cash to put into the next deal. When you delay paying off your truck, you are leveraging the bank’s money for a better purpose. This works well as long as you earn more from your lonnie deals than the bank is making from you. Its curious that the banks will loan money for your truck but if you went to them and wanted to buy a trailer you would probably come up empty handed. Best of Luck

import · June 15, 2007, 9:43am

Posted by Shaun on June 15, 2007 at 09:43:22:

Let me explain my situation… I’ll try to be as short as possible. I am a new real estate agent (former truck driver). I got my license in Jan., but didn’t really start working until March 1st. It’s been rough getting started, but now all the work is starting to pay off. My first closing is today, and I have 5 more scheduled to close before the middle of next month.

Here is the other part of the deal… when I first started as an agent I had a part-time delivery job (pharmaceutical drugs) that I did in my personal vehicle. Well, the vehicle was stolen with all of the medicine in it. Needless to say I was fired that day. Instead of going for another part-time job I decided to go at real estate full blast, and now it’s paying off. The only thing is… we didn’t have much savings so we decided to keep what we had and stay with my girlfriend’s parents for a while. So… that is a miserable situation.

Well, now with these closings scheduled I’m set to make around $14,000 (I’m also working on a few other deals). Well, here is what I’m thinking. With some of that money I’m going to pay off my vehicle which will be around $4,000. Then I want to start doing lonnie deals. Only, I want to do the first one for me to live in. It’s not exactly what I had in mind, but it’s better than living with my girlfriend’s parents. So, I’ll be living in a mh practically debt free. Does this sound like a good plan? I’ll want to keep doing this deals as I’m living in mine to throw money in the bank for when I get to buy my stick-built.

I’ve read deals on wheels… is there enough info in that one book to get me going or should I do more research first?

import · June 22, 2007, 7:31pm

Re: Want a lonnie deal for myself - Posted by Sawyer

Posted by Sawyer on June 22, 2007 at 19:31:01:

I am laughing out loud as I read your post- from the rocker on my front porch- of my 3bd/2ba mobile home that I paid $125 for. Yes, $125. Don’t laugh, my original offer was $50 bucks!!!

Here’s my story: 2 months ago I moved out of my 4,000 square foot $300,000 house with a monthly mortgage payment of $1,950 to this mobile home that I originally intended to Lonnie. Why would I do something crazy like that?

Because # 1 If a person can live like no one else will for a year, they can live the rest of their life like no one else can.
#2 I WILL live on less to attain more.

I am going to live in this mobile home for 2 years, pay $407 in lot rent per month and continue my real estate business (I am a real estate broker and investor), sock away all the money I normally spend on mortgage, utilities, lawn maintenance, cleaning lady, etc plus a large portion of my usual earned real estate commissions.

At the end of the 2 years, my plan is to use those savings as collateral or a large down payment on an owner financed 25-50 space mobile home park with some upside built into it. I am going to buy me a nice double or triple wide to place in the front of the park and be the “live in manager” -with a higher power laying down all the rules of course.

I am looking forward to being driven crazy by residents who all live within a stones throw of me instead of all around the metro Atlanta area like I deal with now.

So you go ahead and move into that mobile, DO NOT pay the car off- REMEMBER cash is king, and take that real estate commission money and turn it into even more money.

import · June 17, 2007, 8:26pm

Re: Want a lonnie deal for myself - Posted by Gary

Posted by Gary on June 17, 2007 at 20:26:37:

Don’t spend any of that money before you get it. As a sales person many years ago I found anything can and will happen. I once had a couple a few days from closing and the wife filed for divorce. And boy did I need the money bad in those days.
Pay the car off if you can go back and get some cash on your signature,or refinance the car when you need to. Sometimes early payoffs look good on your record. Make out a financial statement,have copies of your tax returns.
If your really interested in mh investing keep a eye on the mls,call the listing agents and see if you can pick up some of these to make a chain of homes sell. Many times the broker has already bought the mobile because it’s probally the cheapest link and may throw it your way just to get rid of it. He’s made his money when the chain closed. Read the posts here, be careful, and before long you’ll have plenty of little deals thrown your way. Lonnie deals,land homes,mobile home parks,ah,so many deals and so little time. Gary

import · June 16, 2007, 7:19pm

Re: Want a lonnie deal for myself - Posted by Ed in Idaho

Posted by Ed in Idaho on June 16, 2007 at 19:19:37:

Ya gotta love this forum. I think all of the advice (free) was well said and right on. I have started printing out the most important discussions to use as my bible or roadmap in this business, and one of the most important ones to me is this,

http://www.creonline.com/mobilehomes/wwwboard4/messages/32245.html

Hope this helps you alot because I think you will understand it.

If any of the seasoned people read this , how do you feel or how much do you use the information discussed in that post?

import · June 15, 2007, 12:38pm

Re: Want a lonnie deal for myself - Posted by Jen

Posted by Jen on June 15, 2007 at 12:38:15:

Shaun,

Sounds like you are going to be getting off to a great start! DOW will give you all the basic info you need to get started.

My only real advice to you is to reconsider paying off your vehicle now unless you are paying a really high interest rate. You will need cash to put into these deals. Few are actually cash outs and even successful Lonnie dealers starting out will often get into a cash crunch. Look at it this way: If you can double that 4k in lonnie deals in a year, why use that money to pay off a loan that is probably only costing you 400.00- 600.00 in interest? Best of luck!

Jen

import · June 15, 2007, 12:02pm

perfect. - Posted by Marty (MO)

Posted by Marty (MO) on June 15, 2007 at 12:02:25:

I’d recommend finding a mentor… deals on wheels is plenty of
knowledge, but you’ll need to navigate through a couple deals. A
mentor will speed the process up incrediby.

good luck!

Marty

import · June 15, 2007, 12:00pm

Re: Want a lonnie deal for myself - Posted by osupsycho (OK)

Posted by osupsycho (OK) on June 15, 2007 at 12:00:12:

Shaun,

I think everything you are doing is great. I would have to agree with Ruben though in that you don’t want the people living around you to know that you are the true investor. Just make yourself out to be the employee so everyone will come to you with deals but not the problems (at least in theory). I would also throw in a word of caution as I know a lot of realtors. Be careful with this feast right now because most realtors experience long periods of famon as well. Just manage your money well in case you go through a dry spell. Don’t drop all of your living money on lonnie deals right out of the gate. One other thing I would add is an an investor and a realtor you have a huge leg up on most realtors as they don’t understand one thing about investing. This is a true marketable realtor skill if you can work it correctly.

Jad

import · June 15, 2007, 10:50am

Re: Want a lonnie deal for myself - Posted by Ruben (KCKS)

Posted by Ruben (KCKS) on June 15, 2007 at 10:50:11:

Shaun,

Sounds to me like you have a very well thought out plan. Invest in all three of Lonnie’s books and a financial calculator. A word of caution when doing deals in the park you live in you may want to come across to other residents as a person who works for an invetor and just, “manages” the mobile homes that investor buys. This gives you that higher authority figure which most find a very nice tool to have.

As far as research read Lonnie’s books at least 2 times and then drive the speed bumps. Remember when you are looking at a home that many of the deals we do are 30 or 60 day deals. What I mean is that someone telling you they want 10K for their home today and they are firm in their price will often sell for less than half that price after a couple of weeks. Once their motivation kicks in.

If you have questions when you are looking post on the board. There are many here who are willing to help you out. Good luck. Also congrats on your commission for your real estate sale.

Ruben D. Flores

816 918-9041

import · June 15, 2007, 10:02am

Re: Want a lonnie deal for myself - Posted by Berno

Posted by Berno on June 15, 2007 at 10:02:06:

I think it’s a great idea. Not only will you get a place of your own, but you will learn first-hand about mobile homes. DOW and CRE are great sources of info and should be all you need to get started. Read DOW 3 more times though…at least before you start posting a lot of questions. Where are you located?

-Berno

import · June 22, 2007, 11:32pm

Re: Want a lonnie deal for myself - Posted by Shaun

Posted by Shaun on June 22, 2007 at 23:32:23:

Sawyer, I have to tell you that you really have me pumped up about this now. I almost had myself talked out of this plan I have for myself. Just thinking about how people I know (who all live in nice houses) think about mobile home parks had me wanting to back out. But screw what they might think. I’m going to do what I need to do to get where I want to be. Thanks for your post.

And I just have to know… how did you manage to get into that place for $125? And how often does something like that happen?

import · June 17, 2007, 6:37am

Re: Want a lonnie deal for myself - Posted by Anne_ND

Posted by Anne_ND on June 17, 2007 at 06:37:14:

Ed,

Good info in that string.

Using OPM to fund Lonnie deals via partials can be powerful, and it’s how I’ve run my business.

By offering full recourse and servicing the notes I retain control, make sure my investors get paid, and can make additional money if the MH gets repossessed (I am also on the hook for additional holding/repair costs) via subsequent down payments or assignment fees.

I do not charge my investors 2% to service the notes, and I do offer good rates of return for them, and generally have been able to find lots of people who want to invest.

Ed, is this what you’re doing?

Anne

import · June 15, 2007, 2:18pm

Re: Want a lonnie deal for myself - Posted by Shaun

Posted by Shaun on June 15, 2007 at 14:18:35:

I have actually been debating about this. The only reason I’d like to have my vehicle paid off is to take some of the pressure off b/c I know that my pay as a Realtor is not going to be very steady. I’m doing great right now, but who knows yet if I can keep up this pace (I think I can).

If my vehicle payment is gone and my insurance goes down, then my girlfriends income will be more than enough to cover the rest of our monthly expenses.

I’m not exactly sure yet how I should handle this. I can see using the money for other things, but I’d also love the peace of mind knowing I have absolutely no debt.

import · June 23, 2007, 7:21pm

Re: Want a lonnie deal for myself - Posted by Dr B. (OH)

Posted by Dr B. (OH) on June 23, 2007 at 19:21:31:

Shaun,
Cheap deals come along once in a while.
Earlier this year I got an '86 14 X 50 2/2 for 1 dollar. The guy had let the floors go with a bad leak from the washer. Less than $500 later, I sold it for $5600 with $1000 down, $300/mo.

I just picked up a 93 14 x 70 2/2 for $120 bucks in back taxes. This one needs a new roof though. Oak tree went through it in an ice storm. It was perfect before the tree damage. Estimated $2500 for roof repairs, $1000 for carpet and incidentals. Will sell on note for $12K

It can be done but you’ve got to be out there keeping your ear to the ground, as you are.

Happy Trail(er)s,
Steve

import · June 17, 2007, 10:20am

Re: Want a lonnie deal for myself - Posted by Ed in Idaho

Posted by Ed in Idaho on June 17, 2007 at 10:20:51:

I haven’t actually gotten to the selling of the notes part yet, but I need to real soon as I am running out of money, in a good way. But this is definitely the path I will follow. I think in a strong ‘Lonnie Deal’ market, you can see greater and bigger returns faster.

Can I ask you where you feel the greatest pool to sell your notes to lies? And could you give just a couple of tips on the note business for these homes? I do like the idea of full recourse with about 15-18% return and no recourse with about 25% return, or do you feel that the full recourse route is the way to go? And why is the sky blue? So many questions left to ask and find answers to in the archives!

import · June 15, 2007, 4:09pm

Re: Want a lonnie deal for myself - Posted by Ruben (KCKS)

Posted by Ruben (KCKS) on June 15, 2007 at 16:09:04:

Shaun,

Jen brings up a very good point. If you really get into Lonnie deals you become note rich and cash poor if you are doing deals on a regular basis. You may want to put that payoff aside in case you have a long period to your real estate transaction is a ways off. Then if a great Lonnie deal or two come up you still have the cash for it but if you need to you can tap into that money to make the payment. The best of both worlds would be to buy a Lonnie deal or two to make the payments on your car paying it off in a year or two and still having the notes after that for a while.

Ruben D. Flores

816 918-9041

import · June 15, 2007, 5:58pm

Re: Want a lonnie deal for myself - Posted by Shaun

Posted by Shaun on June 15, 2007 at 17:58:35:

Yea I see you guy’s point. I actually only have 15 payments left on the truck so it will be payed off soon one way or the other.