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Quick, Easy Cash Flow on My First Mobile Home Deal

by Dan Poling, Ohio   

Just completed my first deal and wanted to share my excitement! I had purchased Lonnie's books [Deals on Wheels and Making Money with Mobile Homes] about a year ago, read them once, rode the speed bumps a couple of times, and then got "too busy" for this.

I decided about two months ago to give it another go, re-read the books, and rode the bumps, again. I took down a lot of numbers, talked to a few people, and landed on one that I thought had good some potential. I based this on the condition of the mobile home and the nice community in which it was located.

I negotiated a selling price ($5,500) that I felt would allow me to turn the home around and make a fair profit. I left to talk to the park manager. He was very nice and asked me to apply for the lot in my name (first deal, only), and then my potential buyer would need to be approved. All in all, it was a positive experience.

I went back to the seller, closed the deal, and called the paper that day, placed an ad offering financing without listing the price. I received eleven calls, four of whom were interested after hearing the asking price and viewing the home. My buyer had looked at the home while the previous owner still had it for sale (asking $8,000), so I never had to show the inside or pick up the first paint brush!

As a bonus, they also understood why I was asking $9,000 for the home, which was a fair profit for an investor! Here are the details:

$5,500 purchase price
$35 title transfer fees
$40 gas
$16 ad in paper
$35 park credit check (mine)
$5,626 total invested


Sold for $9,000
$5,000 down
Note for 18 months @ $245.32/month
12.75% interest (industry standard)
Yield is "Good Enough"

(Yes, I understand how to use my financial calculator. I've punched these numbers a dozen times making sure that I was not seeing things!)

Now, I'm not foolish enough to think that every deal will fall together this quickly and painlessly (eight days), but I'm also smart enough to understand it would have never happened if it weren't for the Lonnie Scruggs books and the info shared on this website. I wanted to post questions on the Mobile Home Forum many times during the deal, but every question that came up had already been asked before and was in the archives.

I used the exact techniques that Lonnie presented in the book, such as the wording in my ad, the contracts, etc. Thanks Lonnie, Ernest, and all who share their experience in such an unselfish manner in this format! Oh yeah, time to go find another "Lonnie Deal." I still have three qualified buyers who need a home. Find a need and fill it!

 
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