My father was surfing on the net around the first part of 1997, and he ran across this website. He thought Lonnie Scruggs had some good ideas and bought Deals On Wheels.
In June of 1998, we bought two mobile homes in a park that were side by side. One was a 1974 2bd/1bath the other was a 1972 2bd/2bath. The 1974 was vacant. The owner lived in New Jersey, so they had a real estate agent list the home.
We called the agent and she showed us the home. We told the agent we wanted to buy the home, but she told us that she did not know how much the sellers wanted for it. The agent called the owner, yet they were not there. We asked, “Where are they?” The agent said, “In Aruba!” We said, “Aruba, like the island Aruba?” The agent said, “Yes.”
The agent also told us that there was a slight problem. There was approximately $1,400 in back lot rent due. I said, “1,400 dollars! Are they going to pay the 1,400 dollars?” The agent told me that they would.
So, we structured the deal like this. The purchase price of the mobile home would be $2,400. We would pay off the lot rent of $1,400, leaving $1000 dollars for the seller minus 10% for the agent. PRICE FOR MOBILE HOME–A WHOPPING $760.
We faxed the bill of sale back and forth from here in Alabama to Aruba, and we took possession of the mobile home.
The other was much easier. The seller was asking $3,600. We agreed, signed a bill of sale, and took possession of the mobile home. We sold both homes in August of 1998. Here is how we structured the deals.
1972 2bd/2bath. Sold for $7,500, $750 down. Took back a note for $6,750+taxes for 40 months at approx 7% interest. This comes out to $200/month for 40 months. Total amount made $8,000 + $750 down = $8,750 – 3,600 = $5,150 Profit. YIELD ,= “GOOD ENUFF.”
1974 2bd/1bath. Sold for $6,000, 0 down. Took back a note for $6,000 + taxes for 36 months at approx 7%. This comes out to $200/month for 36 months. Total $7,200 – 2,400 = $4,800 Profit. YIELD = “GOOD ENUFF.”
NOTE: We find it easier to make the interest fall where it may, with a fixed monthly payment. (i.e 7% interest was actually about 6.82%)
We have really enjoyed doing this as a business, and it seems to be very profitable. We hope to do more in the future. We would like to thank JP and Terry Vaughan, Lonnie Scruggs, and Bill Bronchick. His course on LLCs is fantastic. [How To Form Your Own Limited Liability Companies]