It took almost three weeks to complete the deal, but my first Lonnie Deal worked out just fine. I know that those of you who are thinking about investing in mobile homes have lots of questions (like I did and still do…) about how to do this “start to finish.” I’ll try to explain how this one went.
First, I contacted park managers and talked to people that I met in the parks and told them that “I buy and sell used manufactured homes and pay a referral fee for any leads that turn out to be a purchase or a buyer.” One guy in the mobile home park told me about a vacant home in the park.
After some investigating I found the owner and got a look inside. It was very clean and needed no fix-up or clean-up. I knew that it was worth 10K-12K, so when the owner told me that he had to have $5,000 – $6,000 for it, I offered 5K, and he said “sold.”
My only problem now was that I didn’t have $5,000… I made some calls and found an investor (a business associate who had a small 2nd on my house) who agreed to loan me $5500 for 4 years at 12%. I added $500 to the purchase price to cover any lot rent needed and other minor expenses. I ran an ad that said “WILL FINANCE” and, to make a long story short, I sold it today for 11K cash.
I also had two qualified offers for the typical Lonnie-type Deal (2K down and about $200/month cash flow for my full asking price of $12,950.
Here’s how the numbers worked on this deal:
|
Sold For |
$11,000 |
|
Payback on Loan |
– $5,800 (with a $300 “thank you” to my investor) |
|
Lot Rent/Utilities |
– $180 (while I owned it, 2-3 weeks) |
|
Finders Fee |
– $100 |
|
Newspaper Ad |
– $60 |
|
Net profit to me
|
$4,860
|
If you keep plugging away, you’ll find the deals. Good luck. Thanks, Lonnie for your material and advice.