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How I Made Almost $5,000 on My First "Lonnie" Deal

by Christopher K. Smith, San Francisco, CA   

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.

 
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