Before I did my first deal, I spent time on BP searching for people like me going through their first dealings in this business. I found many who started sharing their adventure but when it started to get good, the thread died. The ones that did finish I found to be extremely helpful. They show how easy this business really is to get out there and get started!
My first post on the subject started out looking for answers and ended being a journal of my personal findings along with tons of valuable information from many great people on Bigger Pockets (Thanks to all of you!). That thread can be found here for those interested in reading along: http://www.biggerpockets.com/forums/30/topics/45339-first-lonnie-deal-on-the-right-track-
I have received a huge amount of support from people who are testing the waters with their toe but have yet to jump in for fear of the un-known. One of the most common things I see concerning a 'Lonnie deal' is "I can't get homes that cheap!". Well to that I say non-sense, poopy pants! You CAN. You just have to find sellers who NEED to sell. There is a big difference between a seller who wants to sell, and one who needs to sell.
With that being said, here we go!
This deal I just bought a few days ago started with a simple phone call I received one night about 8pm. It was from a gentleman who got my number from the neighbor of my first deal (you won't believe how fast word of mouth travels in these small communities!).
He said that he heard I buy mobile homes. I explained that I buy mobile homes if the numbers work and it makes sense to buy them. I always ask them to tell me about the home and let them talk. While they're talking you are learning about the home, why they need to sell, and building report all at the same time. It turns out that he needs to sell because he is moving out of state in less than two weeks to live closer to the children and grandchildren. On top of that, his wife has had a job offer that she needs to take advantage off (sounds like they NEED to sell doesn't it?).
After I kept him talking a little bit, asking basic questions about year, size, bed/bath, the AC, roof, ect. I asked him about the condition/repairs needed to the home. Just keep them talking! He told me the floors were in pretty bad shape. When I asked how much he wants for the home he told me $1000. Now that's within my price range so I told him I would be there in the beginning of the week to take a look.
Let me take a step back for a moment and mention something. This is a people business! If someone doesn't like or trust you , you probably won't get the deal, or at least not a very good one. It's very important to build report!
When I got there we talked for about 15 or 20 minutes about everyone's favorite subject.. you guessed it. Themselves! We talked about his business, the horribly hot South Florida weather, and the miserable people down here. Then we talked about how great North Carolina is how how he can't wait to get out of here. While we were talking I casually did my inspection. When I found a problem, I didn't have to say anything because he was right there.
During the inspection, I found water damage (not bad) on the wall around the window AC. Plywood over the holes in the floor (they were big enough your foot would go right through to the grass). The place was going to need to be re-carpeted.
After I was done I explained my concerns about the home. My main concern is that the place needed to be re-floored/re-carpeted and there is a very limited market for a 2/1 without central air, and aluminum wiring which means my holding cost + repair cost + sales price puts me above retail value and leaves me with very little if any profit on the deal and that's why I typically stay away from 2 bedrooms unless they have something to offer like central AC or 2 bathrooms.
Then he asked me if I would take it for $400 if he paid the next months lot rent. Can you believe it? I didn't make an offer or have to 'low ball' him. He did it himself!
Now.. this is where MY lesson was learned (that's right, I'm still learning as I go and have lots to go). I told him I would definitely consider it at that price but I wanted to put some numbers together first. That night I went home, put my numbers together and I was pumped! Then I started to get a bad feeling about not closing the deal. Sure enough, first thing the next morning he called me to tell me he had SOLD IT pending park approval for the full price $1,000 CASH.
Talk about a kick in the ribs and ruining my Saturday!!
Well.. I know this post is long enough to make your eyes bleed so I will end it for now with a 'To be continued...'
