Contractor · Charlottesville, VA · Member since 2010 · 99 posts · 63 votes
Just curious as to what variation of Lonnie deals other folks out there are performing? I run an investor model of the deals as a variation, just wondering if others are doing the deals and have modified it in any other way I haven't thought of doing...
Investor, Entrepreneur, Educator · Springfield, MO · Member since 2009 · 21k+ posts · 12k+ votes
13y
My crystal ball says it's a MH "designed/rehabed" just for investors to devise the old deal into a commercial flavored financing arrangement to avoid the SAFE Act issues.......good luck with that. :)
Investor · Maui, HI · Member since 2009 · 13k+ posts · 3k+ votes
13y
I've never worked with Mobile Homes - but I'm fascinated by them. Without hijacking your post too much - can you explain more what you do ? I'm familiar, somewhat, with Lonnie Deals - but only basic stuff. The only stuff other than that is the great stuff John Fedro writes about on the BP Blog.
Investor, Entrepreneur, Educator · Springfield, MO · Member since 2009 · 21k+ posts · 12k+ votes
13y
My crystal ball says it's a MH "designed/rehabed" just for investors to devise the old deal into a commercial flavored financing arrangement to avoid the SAFE Act issues.......good luck with that. :)
Contractor · Charlottesville, VA · Member since 2010 · 99 posts · 63 votes
13y
Well guys, I went slightly out on a limb and gave something a title that I had not yet seen "coined" in the industry. It's a pleasure to know you guys are right here watching all this "action" on mobile home posts and are ready to chime in; i'm certainly in great company here.
That said, the investor model is ONLY bringing in the funds from elsewhere to perform a "Lonnie" deal. I understand the "true Lonnie deal" would be to get a down payment for more than I pay for the home...and those deals certainly occur and I love it when they do. However, in trying to achieve maximum volume in the quickest time frame possible, it occurs there are many homes that are very good deals that may cost more than say $2000 - A down payment amount tougher for me to get any time other than tax season. In order to purchase these homes (and again achieve volume) I partner with an investor on each deal to help fund more deals. I'd rather make 50% profits on 50 deals than keep 10 true Lonnie deals. So I go for volume.
@Bill Gulley, I don't use a crystal ball though it would be convenient. In order to take advantage of the many deals out there I team up with investors to help fund the deals. The facts have been presented to me regarding the SAFE ACT and I'm in NO WAY insinuating this post was supposed to be about the circumvention of ANY legislation. In fact, I have posted in other forum posts recently about the SAFE ACT. Again, @Bill Gulley I'm not trying to pile on you here too hard as obviously you ARE AN EXPERT; I can't see into the future but I do see the writing on the wall. I have an attorney waiting to close deals for me. A good buddy mortgage originator (my golf buddy) waiting to close deals with me. The downside is I have to PAY BOTH of them. Not the end of the world and certainly not a problem when the alternative is trouble (jail time?), but I did also revise my method of sale and am in the process of changing to a lease/option method. This method MAY NOT WORK! It's been passed by one attorney and is with another for me right now. I'm not beating my chest here or trying to "attorney drop" on the post, I'm only trying to reiterate as we all know that the SAFE ACT/DODD FRANK/[ALL LEGISLATION] are a really big deal and I will certainly do all that is required to comply.
I've read a LOT of literature on this mobile home business and am familiar with you guys. I receive a lot of the newsletters and emails from many of the "big" guys like you in this post.
My post question was meant to illicit responses two-fold: are many other mobile home investors using the "model" of teaming up with private funds? And also asking if anyone wanted to share another method of investing in mobile homes that maybe I hadn't thought/read/heard about. I thought it would be neat to share ideas.
Thank you for your responses and time and I look forward to hearing your thoughts.
Investor · Kalamazoo, MI · Member since 2009 · 1k+ posts · 495 votes
13y
This is just my opinion but, I would guess there there are a few others that share my point of view.
As much as I might hate to say it - Lonnie deals / buying and selling mobile homes (or owner occupied SFR's for that matter) using a "retail installment" contract, is a transaction that fall under the SAFE Act and Dodd Frank which is more severe. If you are doing these transactions and are not licensed/complaint, your business IS in jeopardy.
Investor · Kalamazoo, MI · Member since 2009 · 1k+ posts · 495 votes
13y
I know it is late and I should probably keep my mouth shut but, there are folks here selling classes about buying and selling mobile homes that have not even taken the time to become a licensed mobile home dealer. If you are buying and selling for a profit, the courts are going to see through your scheme eventually. Try to enforce the terms and conditions of a non compliant contract and, let me know how that works out lmao!
Contractor · Charlottesville, VA · Member since 2010 · 99 posts · 63 votes
13y
If I implied that I wanted to enforce terms of a non compliant contract then I am sorry it came out like that. I don't know how that inference might have been drawn but if that was my stance I would have lmao also!
Again, the post, and many others on here, was meant to illicit ideas about how to keep the mobile home investing ideas flowing.
Obviously the "times are changing" in the mobile home landscape and I certainly want to be compliant as well as suggest to all others on here to be compliant. I have done extensive research on my own as well as with multiple attorney's to "figure" out this landscape. I suggest to all others to stay compliant and get the proper licenses and cert. as well.
The fact is, and this will always be my motivation, and I don't say this in jest or with any reserve, is that people need help out there for affordable housing. I've tried very hard to help and will bend over backwards to try to do so, sometimes at a monetary loss. Sure I'm making money as a whole, but isn't the best money made when you can provide help and services, and at a minimum at least believe in what your doing?
I take a LOT of pride in my business and want to help change the landscape in the industry to shed a positive light on those that invest in mobile homes and real estate in general.
As I have read on this blog, it doesn't seem like there are too many investors out there producing volume on mobile home investments (comparatively to other niches). If someone had a fully legal "twist" on the model I would have loved to have heard about it. And all I was saying is that I have a slight "twist" on the Lonnie model, though it's not rocket science at all. It's using OPM to produce volume of deals. If other's are doing the same, I'd like to talk to them about their experiences. If not, anything else similar would be intriguing.
It seems much easier to team up with others for help and ideas rather than hoard and turn away from collaboration. Further, if someone were in my market doing the same I'd love to collaborate with them even further to pitch properties to each other and pass along buyers, etc. to where all can benefit and moreover provide the HELP and service to the buyers and sellers out there in the industry.
I wasn't intending to grandstand here or take the podium, but I'll take the opportunity to say that it seems MOST of the replies and topics on the mobile home world are now involved around the compliance issues. And I get it, it's a huge deal and relevant now. The tone of my original post was very innocent and the first two replies followed as such. I never imagined being on such a popular and useful site would have then elicited the negative energy that then followed.
Here are the facts. I don't have a "PRODUCT". I'm not PITCHING anything. I came across this site a while back and thought it was a GREAT idea for the purposes of collaboration I previously mentioned. I ONLY wanted to discuss the business and models of such with this post and to give back. I've learned a LOT about mobile homes in a short time and wanted to collaborate with others. I know there are MANY!!! other posts in forums about the pitfalls of mobile home investing. There are also many other posts about the strategies, and I was NOT intending for this to be about circumventing anything. If I invested in single family homes, the post would have read, "I use private money to do deals, does anyone else? Tell me about your strategies". It was not intended to say "I use private money to flip houses even though that just became illegal; I found I can skirt the law and I'll ride the wave of fortunes until someone comes knocking on my door. Anyone else want to talk about how to intelligently break the law?"
I'm not claiming to be the expert in mobile home investing AT ALL. However, from what I'm finding and maybe because a lack of others in the industry is that I do at least have enough knowledge to help others. I'm a big boy and can handle responses, but for the good of this site and the forums, I would only say to please try to take the stance of HELPING others before assuming a post was meant to be deceitful and dishonest.
Real Estate Professional · West Palm Beach, FL · Member since 2012 · 23k+ posts · 13k+ votes
13y
Sam Parkins I don't think there were any negative comments directed specifically at YOU, just some good general warnings about dealer status, etc. There's a nice, free and open exchangeof ideas here, even when we disagree with each other.
Contractor · Charlottesville, VA · Member since 2010 · 99 posts · 63 votes
13y
I very much appreciate your opinion! I agree they weren't specifically at me and agree they are warnings. However, I was trying to say that warnings aside, there still are investors out there doing business, right?
Investor, Entrepreneur, Educator · Springfield, MO · Member since 2009 · 21k+ posts · 12k+ votes
13y
Knowing there are "others" out there, that's why I said what I said. Nothing personally pointed at you Sam.
So, if you want to "help" and make money, why not consider a non-profit that would be exempt from many of the SAFE Act requirements? You can drag off a salary, you can contract with other businesses and move inventory. Provide, safe and affordable housing at fair prices while assisting others and you can be well compensated in the community.
I suggest stepping back and looking at the big picture instead of at such a micro level or some strategy that is difficult to perform. :)
Contractor · Charlottesville, VA · Member since 2010 · 99 posts · 63 votes
13y
Bill Gulley I appreciate the thought. Believe it or not I have put some thought into the non-profit idea. I also read an article about a company in Mass. that pooled funds to buy parks and then donated the land to the home owners...or something similar. I think that for the right people that need this kind of help it's the best thing in the world. We often talk about a "hand-up, not a hand-out".
I do take a lot of pride in helping others. I do have a few items on my plate for the business and will admit I have not devoted enough time to research the non-profit idea, but I do really like it and glad you recommended it.
Furthermore, non-profit is truly a viable concept and it does achieve the goal of helping others. I've focused some attention on land/home deals, parks, and starting a transportation business for the homes, and it occurs to me that yes these other businesses are services (and produce income) they don't help on such a micro level so to speak. With systems in place currently that allow me more time away from the buy/sell business, it is a viable thought to put the buy/sell business on full auto-pilot and turn it 501(c).
Do you or anyone seeing this have further information about non-profit status, application, process, qualifications?
Investor, Entrepreneur, Educator · Springfield, MO · Member since 2009 · 21k+ posts · 12k+ votes
13y
Seems that since you're willing to give 50% away, or not want it all, that might be an option. It's an overview of non-profits but it's not something to get rich quick with, your earnings need to be reasonable starting off, the bigger you get the more you can make as the adminstrator/executive director. Good luck. :)