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Quick $12K Profit on First Mobile Home Deal

by Mike Garvin   

I have been coming to CRE Online for over two years. I have read books, talked to people, partnered with people, and until this past Friday, I have never done a deal. I was the ultimate procrastinator. Well here it is, and if you think you have seen all the reasons a person can be motivated, then read on because I still cannot believe it.

I own a tavern in the area, and I had a local guy come around asking if I could use some help around the bar cleaning, etc. Well I can always use extra help for the grub work, so I hired him. The problem with this guy was the first week he was asking to be forwarded pay. And this went on for a few weeks.

He always was working off money he owed. One day I asked him when this was gonna stop. He said when he sold his mobile home, he will be able to catch up on his bills and then some. Now I have read Lonnie's books, but I was not really interested in mobile homes because there are only a handfull of parks in the area, and most of them go for top dollar. But I inquired anyway.

Turns out that he and his girlfriend were given a brand-new mobile home in October 2001 by his girlfriend's mother. It was purchased for $50,000. He said he was getting desperate and was going to call his Realtor and lower the price to $35,000. I told him I might be interested if he was willing to be creative.

He came back the next day and told me $30,000 with $5,000 down and the balance in six months. I told him that there was not enough in the deal for me. I really did not want the thing. He showed it to me, and it was nice, but there was no way I was getting involved with mobile homes in that price range. I also must tell you that I never once made an offer and in consecutive days he went from $30K to $27K to $25K, and then one day he came in and said $15K.

I still didn't do it because I thought for sure he would come in and lower it again, but he didn't. I ended up agreeing on a deal for $15K with $2K down and the balance in six months. The thing that I told him first was to get his Realtor out of the picture. It took some aggravation, but the Realtor tore up the contract for $100.

Well about a week and a half went by, and I was real busy, so I honestly didn't try to move it. During this time I did go to the park to talk to the park manager. He said that I could not rent the unit; it was owners only and that I would have to do something quick or have the home removed from his lot. He also said that the lot rents have to be paid before anything. The back rents were $3,085. I have to be honest, I asked the park owner, and he said he wasn't interested and there was a reason for that.

Last Monday, the seller came in and told me that I have to give him more money. I tell him no and that we have a deal. He told me that he will lower the price to $10K total if I could get him $1,000 today and the balance by the end of the month.

We ripped up the old contract (almost a big mistake) and prepared a new one. Total $3K down, $4K at the end of the month, and I pay off his lot rent balance of $3,085. He had to have his girlfriend sign it though because it was in her name.

He called me the next day and told me that the park owner called and offered them $20K. Turns out the owner would have offered it a long time ago, but they were ditching him because they owed him money. He told me that his girlfriend never signed our new contract and wants to sell to this guy for $20K now.

I thought I was going to be screwed. For some reason this guy talked his girlfriend out of it and told me if I could come up with the balance owed to him that they would sign the title over to me today. I said I would call him back.

I immediately called the park owner and told him I had a contract with these people and it was very unprofessional of him to try and low ball me out of the picture. I then told him if he was willing to pay that price to them that I would sell it to him for the same price. He agreed.

So I paid the other guy and went right to the park. The park owner wanted to give me $17K because of the back rents. We negotiated and I ended up collecting a $19K check. I had $7K in the deal for a profit of $12K.

The motivation for the guy I bought it from was that he knew that if his girlfriend got a $20K check, she would take the money and leave him so he had to talk her out of it. It was his only option.

 
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