First Lonnie deal.. on the right track?

Mobile Home Park Investing
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First Lonnie deal.. on the right track?

Terry Drake
Real Estate Investor · Member since 2009 · 260 posts · 119 votes

I wanted to hear some feedback from those who have done or are doing lonnie deals and tell me if I'm on the right track. With all the action I have gotten on this thing I would have thought it would be sold already. I don't know if I'm jumping the gun or 1,000 lookie loo's is the norm for each deal. Am I being too hard on myself? Here are the details.

Well a week ago I saw a mobile on craig's list listed for $3,500. It had newer appliances, washer, dryer, countertop stove and pergo wood floors. I offered her 2k and got it under contract for $100 with a two week inspection period. Lot rent has been paid until March 1st (365/month). Right away I put a for sale sign in the yard, offering it for $189/month owner financing. I also put a sign at the intersection offering the same thing.

I have had a ton of phone calls, and a bunch of drivebys/showings. I've had a few people call back and were interested still but after that haven't heard from them again. If it wasn't getting so much action I wouldn't normally kick the can after not selling a place in a week but I thought with how much action it has gotten, the owner financing and new appliances/wood floors that it would be snapped up already.

I have seen other mobiles for sale that needed work for more then what I'm selling this one for so I thought this thing was going to pop in just a few days since it's ready to move in (there's one soft spot in teh floor.)

The terms that I have offered are 4k cash or 5k owner financed. 495/down and 189/month for 30 months.

What's the holding time for some of you guys on a 2/1? Is it normal to get that kind of action and not have it sold? I don't know if the mobile is at fault and that's why it hasn't sold or if it's a numbers game and there's usually a hundred lookie looks but it still takes a month to sell?

I don't know if I should drop my payment and make it MORE affordable or if I should sit tight and not worry about it. Thanks for any input :cool: I really don't have anyone around here to bounce ideas off of.

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Marilyn A.
Real Estate Investor · Near Houston, TX · Member since 2010 · 93 posts · 12 votes
16y

Hi Terry,
I haven't started investing yet, but will give my opinion from the viewpoint of someone who's bought several MHs in the past and lives in one now.
I think what is wrong with your advertising is that you are advertising it for $189 a month, but when they call they find out that they also have to pay lot rent, making the total monthly cost closer to $500 a month.
So the reason they're calling in the first place is they think they're going to get super cheap housing costs.
Maybe advertise the total monthly cost. Then the people that call will be the ones who can really afford to live in the home.
Congratulations on getting the super deal!! It's very nice and I'm sure it will go quickly.

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  • AJ Mida
    Real Estate Investor · Newport Beach, CA · Member since 2010 · 6 posts · 0 votes
    16y

    Tons of great info on this blog!

    I am looking to do my first deal and when calling park managers they all want me to first be approved into the park through their process, then have my buyer get approved.

    How do you guys handle that?

    Thanks in advance!!

    0Reply
  • Terry Drake
    OP
    Real Estate Investor · Member since 2009 · 260 posts · 119 votes
    16y

    One thing you will find that park managers will be much more personable with a hand shake then a phone call. You are just some other voice over the phone. Find a park you want to do business in and go talk to the park manager. Explain that you're an investor and if you can keep new people coming into the park it's a win/win/win for everyone.

    A good park manager will realize that you make their job easier by bringing in new paying tenants. If you are in a park and the manager doesn't seem very friendly or helpful then shake their hand, leave on good terms, and find another park.

    I was in one park and the manager wasn't friendly, wouldn't even meet with me at first. Normally I would have packed up and left but the DW I was looking at seemed to be a killer deal so I got it under contract. She tried to nail me to the wall with this fee and that fee, doubled DMV transfer/reg fees so I opted out and found another park. Where I am now, she is so helpful. She sends me deals, buyers, and gives me the sellers/home's history before I even make an offer.

    The only thing is that you will usually have to do a deal or two to prove yourself to the park manager before they become as helpful but once they are, it's definitely worth the wait.

    Basically the parks want to make sure you're not a polished turd. So if you plan on visiting a bunch of park managers, it might be helpful to bring a recent (as recent as possible) credit report and background on yourself.

    That should at least get you through the door. Once you find your deal and want to buy it then they will probably want you to pay the money and go through their process but no biggie. I certainly wouldn't pay the application fee every deal I did though. Once is understandable but not jumping through hoops each and every time.

    1Reply
  • AJ Mida
    Real Estate Investor · Newport Beach, CA · Member since 2010 · 6 posts · 0 votes
    16y

    Thanks Terry,

    It's hard for me right now because I am investing out of state. I will just go through the approval process for the first deal. I will be in Michigan in a few weeks so I will work hard to build those relationships while in town.

    0Reply
  • Tony K.
    Real Estate Investor · TX · Member since 2010 · 27 posts · 4 votes
    16y

    Terry,

    Thanks so much for your threads! We are learning a ton from them, and feeling very excited!

    0Reply
  • Bill Gulley
    Investor, Entrepreneur, Educator · Springfield, MO · Member since 2009 · 21k+ posts · 12k+ votes
    16y

    Hi, just lurking, LOL. Suggestions: Insurance, the buyer selects the company and pays it and the note holder is listed as a "loss mortagee" that way if it get's close to renewal, you should get a notice as well about it and then you can check to make sure it's current.

    Terry, getting with park managers is pure gold.

    As for taxes, the amount of profit on the deal that you carry back is claimed as it is received. Interest goes to interest income. If you wrap a deal, that part of principal that goes to the underlyine mortgage is not yours, you break that out, but any interest override is your interest income.

    You know what they say about "ignorance of the law", and some will be made as examples that's for sure....will it be you? Have the buyer pay the fee, maybe your best bet is to have an attorney do the origination, they will likely go along with anything they feel they can justify and generally don't have a clue as to the originating process, you might find one that you can train your way! I "trained" several, brand new attoneys are pretty easy to work with!

    Great thread guys! Good luck, Bill

    0Reply
  • Steve D
    Real Estate Investor · Destin, Panama City · Member since 2011 · 3 posts · 2 votes
    15y

    Terry,

    Thanks again for sharing your experience on your first deal. I've learned a lot from this post and I bet other people have as well.

    -Steve

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