The manufactured housing industry is making it possible for millions of families to buy their own home for less than they would pay in rent. A few people have become wealthy by showing them how. It isn’t necessary to quit your job or profession to start a profitable part-time business. But you may soon find you can’t afford to keep your job.
After convincing my oldest daughter to read Deals On Wheels by Lonnie Scruggs, she finally became motivated and started investing in mobile homes.Diane was a full-time nurse with two small children to care for. She had no experience or training in business. Yet, she and her husband managed to buy and sell twelve homes within a year after getting started–all at a significant profit. She soon began earning more income from her part-time business than she earned on her full-time job.
To minimize the risks and time involved, she started with homes that were already set up in local mobile home parks. She discovered that the best mobile home buys were those between ten and twenty years old. They were usually free and clear of debt.
She found that, in most instances, owners needed the money out of their home in order to move. But owners soon discovered that, while there were plenty of interested buyers, almost none of them had enough money to pay cash. Banks were not interested in financing older mobile homes. And, even if they were, most buyers couldn’t qualify.My daughter discovered that a motivated owner would sell at a very low price if paid in cash. She found it profitable to borrow money from relatives and other private investors in order to pay cash for the homes.
She was surprised at how quickly she could resell the homes by providing seller financing. She soon learned that most buyers were more concerned with “how much down and how much per month” than they were about the price and finance charges.To show how easy it is to get started in this part-time business, let’s review Diane’s very first mobile home transaction.
The situation
After being unable to sell his home for $4,500, the owner simply left town and abandoned it. The finance company became the new owner and was trying to sell it for the $3,300 balance due on the loan.
The problems
The park had several vacancies and the manager feared a buyer would move the home out. The finance company had not received payments or earned interest on its investment for the past three months. Moreover, the finance company was now faced with the high cost of moving the home or paying rent on the lot.
They had been unable to sell the home to a qualified buyer because it needed to be repaired and redecorated. With the home being vacant, there was the possibility of vandalism and having the insurance canceled.The employees of the company were busy with more important matters and didn’t want to be bothered with a nine-year-old mobile home. Besides, it wasn’t their money in the investment.
The solution
Diane made an appointment to meet with the manager of the finance company. She showed him photographs of the home and pointed out that it needed a lot of work. She asked what the lot rent was doing to the value of their investment. She then asked him to give her their lowest cash price.
Anxious to be rid of the older home and avoid more lot payments, the manager said he would accept $2,800. My daughter told him she though the price was too high, considering the condition of the home, but would “talk to her husband.” (In negotiations, it’s called “using a higher authority”.)
The next day she telephoned the manager and told him she had discussed it with her husband, and “he would not let her pay more than $2,400.” The offer was accepted. After cleaning the home and spending about $500 on repairs, the home was sold for $5,900. The buyer agreed to pay $500 down and $164.70 per month, including 14.5% interest for 42 months.
The advantages
The finance company sold the home, received $2,400 in cash, and was relieved of the management responsibilities and monthly lot rent. For showing the home, the park manager received $100 for her efforts and avoided the possibility of another vacancy.
The results
The financial results for Diane were as follows:
|
Cost of home |
$2,400 |
|
Sales tax (6%) |
144 |
|
Cost of repairs |
500 |
|
Paid park manager |
100 |
| ——– | |
|
Total Cost |
$3,144 |
|
Less buyer’s down payment |
500 |
| ——– | |
|
Net cash investment |
$2,644 |
|
Selling price |
$5,900 |
|
Less cash down payment |
500 |
| ——– | |
|
Receivable from buyer |
$5,400 |
|
Months |
Investment |
Annual Return |
Payments |
|
|
Receivable |
42 |
$5,400 |
14.5% |
$164.70 |
|
Net Investment |
42 |
$2,644 |
67.2% |
$164.70 |
The entire process was completed in less than thirty days–while caring for her children and working as a nurse. However, we should keep in mind that we earn this kind of return by dealing in mobile homes as a business–not a passive investment. While almost anyone can find ways to buy and sell mobile homes, it does take a little time and effort.
Problems or opportunities?
With a lot of people, the big problem is indecision, caused by a lack of information. When you are faced with making important decisions that you are not sure about, why not turn to people who are in a position to help?Opportunities are all around us. We usually refer to them as problems. While there may be more social and economic problems than we can handle, we should never forget that the flip side of a problem is an opportunity.
Wealth is usually acquired by solving problems for a lot of people. Once you get involved, you will begin to find solutions. The more you learn, the more you will be able to solve the problems you encounter. Not only can you become wealthy, you will derive a great deal of personal satisfaction from the knowledge that you are being well paid for a job well done.