Posted by Ernest Tew on July 29, 2002 at 09:27:24:
Bob, assuming your figures are in line and you can sell the mobile home for $16,000 on terms, it sounds like it could be a good investment.
For several reasons, the best approach is to enter into a net lease with your customer and a separate option to buy. However, if the transaction isn’t properly documented, it could be construed as a sale if you are ever audited by the IRS.
If you (or other readers) would like to have a copy of the Net Lease and Option forms we use, please send me an email request.
Posted by Tennessee Bob on July 29, 2002 at 08:07:36:
I have located a 94 16x80 3/2 has four weak spots in floor, and other minor needs, otherwise pretty good condition. I figure it will cost around $600-$700 to repair. It must be moved, that will cost around $1200 for tear-down, pull, set and level. It can be bought for $10000. Comparable MH’s in parks sell for around $16000.
I already have a park lined up to move MH’s to, the lot rent is $110. I Would have to take out a $9000 loan out to buy, repair and move the home (My cash supply is limited). If I do it, I would sell it on a lease purchase option at 13% with a minimum of $1200 down.
What would you do?
Posted by Robin (AZ) on July 29, 2002 at 15:53:40:
Just my two cents, but I would hold out for the “real” Lonnie el cheapos. They CAN be found, and if you can borrow $9K and have a little more of your own, you could buy 3 el cheapos and get your money back MUCH faster. If you haven’t read or re-read Lonnie’s books, it’s a good place to start when you are trying to decide the best way to go on a deal or business model.
I have kinda the same situation, I have a 89 innovator 3/2 that just needs cleaning a little. I can buy it for $2000 and it would cost me $1300 to move it and set it up. I just finished reading the book. I have called on several ads, I am running test ads starting today. I have been to every trailer park to look for signs and evaluate the park. I haven’t spoken with any park managers yet. I don’t know if I should buy this home and move it to a park. I am not sure what it will sell for, Every ad that I called on though, the ones that looked like lonnie cheapo deals to me ended up being like $25000. One person; I hurt his feels when I asked that is $4500 correct. He was very upset telling me it was $45000…I could not beleive it! One I looked at looked very rough missing windows and just pretty beat up, the lady said she needs to get $19000 because that is what she owed. I wrote her name and number down and gave her mine.
Not sure if I should go ahead and jump on this deal and move the home, being it’s my first.