2014 lonnie deals
Crossett, AR · Member since 2013 · 89 posts · 12 votes
2014 lonnie deals
Most Popular Reply
John FedroPro Member
Investor · Austin, TX · Member since 2009 · 410 posts · 295 votesHi all,
Some great advice given so far. Having a fun time following this thread
@Daniel Warren I would agree with everyone that has already said that Lonnie Deals are over. At least the way we are all familiar with them. Consult your local DMV, manufactured housing division in your state, and talk to them about licenses in your state regarding financing and the purchase/sale of mobile homes in your state. You will get passed around to many different branches and you will learn a ton.
@David Kauzlaric thank you for the shout out.
@Bill Gulley (With humble respect I say the following) Once again I laugh at your posts placing your foot in your mouth speaking about things you preach to understand and do not. I have no doubt you are knowledgeable about Dodd Frank and other acts, however do not pretend that we have talked and you understand what I teach. Do not pretend that you have an idea of how I help people or how my deals are structured. Do not pretend to know that I am in communications with every states' manufactured housing division and run my procedures past them to confirm they are legal in each state. I say in all humble respect that you preach about others you do not know wrongly. You condescend others and I pity your seemingly low self esteem.
Bill, when it comes to giving advice you may wish to begin by thinking what is best for the person asking the question. Give actionable feedback that will help them gain clarity and don't worry about making yourself feel like the man. Stop simply promoting Ken's program and information, which are great from what I have seen by the way, and cursing everyone else who is knowledgeable and aiming to help. I do agree that @Ken Rishel is a great source of information and guidance for anyone interested.
I feel sad for you Bill and your constant attempts to scare investors and belittle them with the limited about of info you know. Again the info about certain subjects is great but you seem to group everyone beside Ken and yourself as untouchable experts in the field. Bill I truly hope you stop your bitter ways and start helping more people than you are condescending. This is starting to feel like high school, stop with all the drama and just talk/type like an adult. We are all here to learn and grow together.
Anyone reading this should be forewarned to not heed anyone's advice except from your own state. Don't take my word, don't take Bill's word, and don't take Ken's word. Do the research for yourself and take the steps needed to invest safely and actually pull the trigger in your own investing business.
All the best,
John Fedro
38 Replies
- Investor, Entrepreneur, Educator · Springfield, MO · Member since 2009 · 21k+ posts · 12k+ votes12y
I feel for you man, for one thing, you own a mobile home, I'm sorry about that (LOL), next, you're probably up a tree, just betting there isn't a mortgage originator in Crossett, Ar. outside of a bank that can probably touch a seller financed deal, much less know what to do with it.
How much you want for it?
Is land included, if so how much?
Got a buyer?
Did you live in the MH? (I see the home behind you in your pic, that's no MH)
Is it rented and are you wanting to sell to that tenant?
- Crossett, AR · Member since 2013 · 89 posts · 12 votes12y
Thanks for the reply. Its mainly hypothetical. I do own a Mh that I live in and its on a private lot that I rent. Today I will be purchasing a mh and will be moving it to a park or another private lot. My main intentions will be having it for a rental property, but once I get a few passive income rentals going, I would like to have the option to sell some of those, or acquire new one just for Lonnie deals. I'd like to have the option available and I would like to know how to go about it legally if I choose to pursue that option
- Investor, Entrepreneur, Educator · Springfield, MO · Member since 2009 · 21k+ posts · 12k+ votes12y
Hypothetically then, I'd suggest you not buy a MH in your area and deal in properties fit for conducting business with the assets you have available, that meet common practice and the reality of where you are. If you want MH stuff, deal in an area where you have the resources to conduct such business legally. :)
- Crossett, AR · Member since 2013 · 89 posts · 12 votes12y
i mean no disrespect, but you're jumping all around my question. My question isn't about what resources I have available. My question is if I were to owner finance a mobile home, what would I have to do to insure its a legal transaction?
- 12yJim JohnsonPro MemberRental Property Investor · Denver, CO · Member since 2008 · 355 posts · 324 votes
Well, the answer to that is pretty straight forward. You need to run the package through a loan broker that is licensed, or certified, or what ever the term is now, under the safe act. So you can put the package together, and they need to do the verification's and approve the applicant based on income, expenses and the value of the home. From there you can originate and service the loan. Now- in some states in order to do this you must be licensed by the state, but in most cases that is as a mobile home dealer / broker etc... In other states, if your already part of a related profession, you get a pass on the mobile home dealers licence.
- Crossett, AR · Member since 2013 · 89 posts · 12 votes12y
thanks that's more in line of what I'm trying to find out
- Dallas, TX · Member since 2013 · 4k+ posts · 744 votes12y
You will be ok. Jim Johnson gave you great advice, and I wish you good luck and don't worry about people that danced around your question.
Joe Gore - Investor, Entrepreneur, Educator · Springfield, MO · Member since 2009 · 21k+ posts · 12k+ votes12y
And, anyone can post in the forums, anyone at all, some give really bad advice, maybe on purpose just for kicks, consider the source.
You won't be a dealer on one MH deal in AR. You are not getting a pass as it's not your residence so you need a LMO to do the deal, you don't process or originate anything, that is the LMO's domain.
It would not be prudent for you to service this type of loan, even if you are exempt, the base line as to requiring servicing functions and meeting demands will be as set as customary und Dodd-Frank, an individual really can't go there in view of the cost (which can be paid by the buyer, or split or by you) of a mortgage servicer, it would be nuts to attempt it. Put it this way, I was in the business and I wouldn't do it myself and I know what the heck I'm doing.
I suggest too you get an attorney for the installment contract and note to be compliant, have it underwritten by the LMO to ensure you are compliant.
Lonnie crap should be taken off the market and burned! Lonnie deals were specifically mentioned as specifically violating the law as well as the intent of the law. So, even following the concept places you in a position of doubt in dealing in good faith, in a non-predatory manner.
The reality is you need a LMO, another reality is that you probably will not find one to approve a Lonnie deal, they already have issues with the valuation of cans on wheels to establish the loan to value to predict amounts of equity and ability to pay them off. From what I've been reading MOs are not getting involved in mobiles, except for the MH dealers.
My previous comment was meant to introduce reality, much like taking a 30.06 into the woods during bow season for deer, you aren't hunting rabbits or tree rats, so what are you up to? If you're concerned about operating legally, my first thought is not to temp the watch dogs in the first place, having a deal blow up with a buyer is likely, if he shows up in court, (and no, he doesn't need an attorney like a guru claims) your deal will go under a microscope, why even go there if you're not forced into that position? Defies logic, especially when there are better opportunities. :)
- Crossett, AR · Member since 2013 · 89 posts · 12 votes12y
i kind of get the feeling you are implying some kind of sleazeball or something? If I buy a Mh at price and fix it up and rent it out or sell it I don't see how that is me bow hunting with a 30-06? What makes me so sleazy if I would offer financing on it if I sold it? All I asked was how to offer a compliant seller finance option. All you had to do was tell me how. Or not tell me how. Or say this is how, but the cost will be so high for you, you probably won't want to consider it. You definitely didn't have to imply that I'm asking how to legally screw people or take advantage of anyone. What's the deal with that man? Im new and starting out and just trying to find what's a compliant way to offer this. I don't really appreciate the hostility.
- Dallas, TX · Member since 2013 · 4k+ posts · 744 votes12y
The Dodd-Frank act has not been 100% tested, and it looks like everyone out there even wino Sam knows how the Dodd-Frank act will work and even the ones that wrote the law do not know how it will work. I have talk to bankers, lawyers, politicians, and ask each one to let's talk about the Dodd-Frank act, and they look at me like what watermelon truck did you come into town on. All I am saying when someone on an open forum is giving advice on the Dodd-Frank act take it with a grain of salt.
Joe Gore
- Crossett, AR · Member since 2013 · 89 posts · 12 votes12y
i would have accepted no one really knows as an answer as well
- Investor, Entrepreneur, Educator · Springfield, MO · Member since 2009 · 21k+ posts · 12k+ votes12y
Originally posted by @Daniel Warren:
i kind of get the feeling you are implying some kind of sleazeball or something? If I buy a Mh at price and fix it up and rent it out or sell it I don't see how that is me bow hunting with a 30-06? What makes me so sleazy if I would offer financing on it if I sold it? All I asked was how to offer a compliant seller finance option. All you had to do was tell me how. Or not tell me how. Or say this is how, but the cost will be so high for you, you probably won't want to consider it. You definitely didn't have to imply that I'm asking how to legally screw people or take advantage of anyone. What's the deal with that man? Im new and starting out and just trying to find what's a compliant way to offer this. I don't really appreciate the hostility.Daniel, really, I was not trying to infer that you were unethical at all, to the contrary, you asked how to be compliant and that certainly doesn't indicate to me you're trying to screw anyone. My concern is that the basic primes of doing Lonnie deals was and is so outrageously set in predatory lending that federal law was passed that specifically mentioned the strategy. That is extremely rare, almost unheard of, that a federal financial law is passed and describes a guru type strategy.
My implication is that followers of these strategies usually screw people, either intentionally or unintentionally. You can end up messing up a deal by not understanding that refinancing some old MH with a balloon payment of $12,000 is dang near an impossibility by someone who, 3 years ago, couldn't get a loan to just buy it. Lonnie deals included, but didn't require, balloon payments, it's part of the overall strategy. It's also indicated that such deals can be the sell, finance, foreclose, rinse and repeat scam which is a real good definition for predatory lending. A seller may not realize the end results are usually failure, then again they may.
So, it's not about you, it's about the strategy. It's about getting into MHs.
Your exit strategy will be very limited, most of your tenant type buyers who would live in that unit don't have cash to buy it. MH loans are difficult to obtain conventional loans on, for various reasons, low loan amounts, no comparable sales, trailer is too old, not tied down as RE and is a chattel secured note, not to mention the likely borrower issues as to why a buyer just wouldn't go buy a conventional home, low income, poor credit, lack of employment history, lack of credit, there are reasons why people would live in an 1977 Fleetwood Home, 12X60 as opposed to a 3 bed 2 bath brick home on 5 acres down there. Lonnie deals use people who generally have financial issues, who are not financially astute and take advantage of good simple folks. Not bad people, some could be like in any place, but usually they have issues, not everyone should own a home of any kind. It's not about you, it's about them. There are exceptions too, but the majority of Lonnie deal buyers is well understood and how they get messed over..
Now, if you really want to get into that business, buy a 2K trailer, put 3K in it and make it nice, rent it to the guy. Down there you should be able to do a hand shake deal. If you rent this place from me and make your rental payments on time over this period of time, I'll just sign the dang thing over to, but you have to pay me on time! Problem solved! There is no lien or security interest filed, you don't have a true financing agreement and therefore no financing requirement to meet! Good luck
And yes, several here have a damn good idea how this works and others like to discredit others simply from personality issues and who don't have a clue, in fact much of a clue about anything in RE, it becomes obvious if you look at the source and their past posts. :)
- Crossett, AR · Member since 2013 · 89 posts · 12 votes12y
Thanks man! That explains what you were saying a little better. My main focus is renting right now anyway, but its always good to have options. Handshake deal sounds good, but they would have to trust you on your word. I'm good for mine but there is not a lot of trust floating around the world these days.
- Investor, Entrepreneur, Educator · Springfield, MO · Member since 2009 · 21k+ posts · 12k+ votes12y
It shouldn't be hard to build trust with folks you deal with.
I know an old guy, old enough to be my daddy, he'd say "I'm gonna take care of that for you" or "I'll do this for you" then, when he accomplished those things he'd say "I told ya I'd do that for you, I keep my word"!
Gain trust by accepting responsibility, by taking on things to accomplish. When you do what you said you'd do, remind them you made them a promise and you kept it! Eventually that sink in even to the most skeptical.
By the way, that guy is originally from AR near Snowball, there's a lot of wisdom down there in those Ozark Mountains!
Your tenant has no risk really, they get the place for the rent paid, the only thing left is the upside for them just for ding the right thing! :)
- Appleton, WI · Member since 2014 · 4 posts · 0 votes12y
I've been doing research on this and you can still do Lonnie-deals, LEGALLY. However, there is a set of rules/procedures/guidelines that you need to follow to be compliant with the new laws (SAFE Act & Dodd-Frank).
I highly suggest you look at @John Fedro program (Mobile Home Deal Maker Formula), he actively participates in this field and invests in mobile homes actively and currently. As such, his program goes into specifics on how to do seller-financing with the new laws and do it in a way that is compliant and LEGAL!
I have recently signed up for his program because I am in a similar boat and I highly recommend his program. His program will give you information and guidance on all of these areas.
I have tagged him to this post so John can chime in if he gets the time!
- Investor, Entrepreneur, Educator · Springfield, MO · Member since 2009 · 21k+ posts · 12k+ votes12y
Originally posted by @David Kauzlaric:
I've been doing research on this and you can still do Lonnie-deals, LEGALLY. However, there is a set of rules/procedures/guidelines that you need to follow to be compliant with the new laws (SAFE Act & Dodd-Frank).
I highly suggest you look at @John Fedro program (Mobile Home Deal Maker Formula), he actively participates in this field and invests in mobile homes actively and currently. As such, his program goes into specifics on how to do seller-financing with the new laws and do it in a way that is compliant and LEGAL!
I have recently signed up for his program because I am in a similar boat and I highly recommend his program. His program will give you information and guidance on all of these areas.
I have tagged him to this post so John can chime in if he gets the time!
So, you have a business arrangement with John and you're promoting his stuff.
And, you've decided that someone, who has no law degree, no compliance experience and has dealt in RE/dealing in mobile home deals for 11 years is is an expert to advise you in federal law and financial compliance. Okay, you have at it. LOL, Good luck.
Back to reality, John is in Austin Texas, do you think Daniel living in a rural area of Arkansas can just go down to the local mortgage originator doing seller financing deals passing by the 20 offices of real estate attorneys and a dozen closing offices to select his support team and get assistance? Daniel has no support there and he sure can't have deals underwritten by someone with a freaking program.
Is there any understanding that TX isn't AR and laws under the SAFE Act are not be the same.
David, just because you got sucked into some program what experience, education and qualifications do you have to even evaluate such a program and then advise others to head in that direction? How did you assess these new financial regulations yourself, are you an attorney with financial regulatory experience?. If you're not, I guarantee you that you don't understand what you're reading.
Should you follow Lonnie Deals? ABSOLUTELY NOT!
Can you seller finance mobile homes LEGALLY? ABSOLUTELY YES!
@Ken Rishel I'm sure knows more about mobile home financing than anyone on this site, he is active in financial compliance and someone to listen to.
To do financing as a DEALER you will need to be compliant (that means follow the regulatory process) and to do that you must have specialists who hold a license to originate mortgages, if you don't have the license or have someone to do the origination you are not compliant. Pretty simple.
I'll be happy to help Daniel, if he wants assistance, study my profile and see if you think I might be qualified to assist and advise others in seller financing!
You want expert advice in MHs, read Ken's posts or get with him, not a wannabe guru. :)
- Dallas, TX · Member since 2013 · 4k+ posts · 744 votes12y
If you do decide to hire someone who says they are experience in mobile home financing make sure you ask for a few references and make sure they are licensed to give legal advice because you have a lot of wannabe gurus who claim they know everything and don't know anything.
Joe Gore
- Investor · Central Valley, CA · Member since 2012 · 6k+ posts · 3k+ votes12y
If you've read the many threads here you should have come across the links to the CPFB ruling on exemptions. If you are a person or estate, you are allowed to seller finance one property per year to consumers and are exempt from licensed mortgage origination requirements and ability to repay verifications and host of other requirements in Dodd Frank. Read the rulings and see if they apply to this sale.
- 12yJohn FedroPro MemberInvestor · Austin, TX · Member since 2009 · 410 posts · 295 votes
Hi all,
Some great advice given so far. Having a fun time following this thread
@Daniel Warren I would agree with everyone that has already said that Lonnie Deals are over. At least the way we are all familiar with them. Consult your local DMV, manufactured housing division in your state, and talk to them about licenses in your state regarding financing and the purchase/sale of mobile homes in your state. You will get passed around to many different branches and you will learn a ton.
@David Kauzlaric thank you for the shout out.
@Bill Gulley (With humble respect I say the following) Once again I laugh at your posts placing your foot in your mouth speaking about things you preach to understand and do not. I have no doubt you are knowledgeable about Dodd Frank and other acts, however do not pretend that we have talked and you understand what I teach. Do not pretend that you have an idea of how I help people or how my deals are structured. Do not pretend to know that I am in communications with every states' manufactured housing division and run my procedures past them to confirm they are legal in each state. I say in all humble respect that you preach about others you do not know wrongly. You condescend others and I pity your seemingly low self esteem.
Bill, when it comes to giving advice you may wish to begin by thinking what is best for the person asking the question. Give actionable feedback that will help them gain clarity and don't worry about making yourself feel like the man. Stop simply promoting Ken's program and information, which are great from what I have seen by the way, and cursing everyone else who is knowledgeable and aiming to help. I do agree that @Ken Rishel is a great source of information and guidance for anyone interested.
I feel sad for you Bill and your constant attempts to scare investors and belittle them with the limited about of info you know. Again the info about certain subjects is great but you seem to group everyone beside Ken and yourself as untouchable experts in the field. Bill I truly hope you stop your bitter ways and start helping more people than you are condescending. This is starting to feel like high school, stop with all the drama and just talk/type like an adult. We are all here to learn and grow together.Anyone reading this should be forewarned to not heed anyone's advice except from your own state. Don't take my word, don't take Bill's word, and don't take Ken's word. Do the research for yourself and take the steps needed to invest safely and actually pull the trigger in your own investing business.
All the best,
John Fedro
- Real Estate Investor · Lexington, SC · Member since 2012 · 25 posts · 11 votes12y
Hey @Daniel Warren ,
If you are wanting to owner-finance mobile homes, don't give up. The product (providing affordable housing in the form of a mobile home) is not illegal in itself but the method of delivering this product (owner-financing the mobile home) is in question. Just keep in mind that we're not dealing in illegal products but simply need to manipulate our delivery.
In regards to the delivery, my method is similar to what Bill suggested in that the mobile home is a rental until the last payment is made at which point I agree to give the title to the tenant-buyer due to the ending of the useful life of the mobile home.
This is far from being a perfect strategy, but it's working for me right now and I'll adapt when necessary.
- Crossett, AR · Member since 2013 · 89 posts · 12 votes12y
Are you carrying the maintenance cost in that agreement?
- Real Estate Investor · Lexington, SC · Member since 2012 · 25 posts · 11 votes12y
Hey @Daniel Warren
Our agreements state that our tenants are responsible for all repairs. However, we will help them when major issues arise on a case-by-case basis.
- Crossett, AR · Member since 2013 · 89 posts · 12 votes12y
ok thanks, so you actually have a written agreement then?
- Dallas, TX · Member since 2013 · 4k+ posts · 744 votes12y
That is good thinking getting the tenant to pay for repairs. Let's say the stove stop working are going to tell them they need to get it fix.
Joe Gore - Real Estate Broker · Canton, GA · Member since 2010 · 15k+ posts · 11k+ votes12y
Let's stick to the topic at hand. If there are concerns over individuals please contact each other off this topic if you want to continue private discussions.
The Lonnie thing was written a long time ago before the government tried to introduce all this stuff. It's like reading a book on an investor strategy from 20 years ago. It might have survived the test of time completely, some, or not at all.
Why not simply just keep renting the mobile homes and not deal with all of this owner finance stuff?? Are you finding the compliance and regulations worth setting it up for owner finance with increased time and money??
I do not know that much about the mobile home industry.
My mom's friends have been doing mobile homes over 40 years and are in their late 70's. They know a ton about MH parks but I just see them on occasion if my mom is coming to see them for a get together and she wants me to tag along. They have about 45 homes now but used to have much more and have ramped down over the years as they got older.
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