I have come to a stand still due to lack of funds. I have done a few assignments working with park owners to generate a quick 1k here and there, but that isn’t enough to fund my new deals. At this point, it looks like I have a few options:
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Sell the notes that I have as a package for a discount. How would I do it? How would I price it? What paperwork is involved? Can anyone direct me to some reading material on selling notes?
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Seek Friend and Family money.
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Seek private equity from someone knowledgeable in real estate in my town.
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Lending club or Prosper.com
I pass up on a LOT of deals, and it’s frustrating. Also, I pass on tons of deals because too much money will be tied up in them. For example, I might buy a 3k place, because I know I can recoup 1500 or so in a down payment. I might be able to sell that place for 8k. However, I might pass on a home for 7k, which I could sell for 23k, just simply because I would have to lease 5k or more tied up in that home. It seriously dents my “bankroll”
What have you guys done when you got to this point?
Any suggestions appreciated.
Thanks!
My advice is to be patient. As I recall, you were doing a whole bunch of deals right out of the starting gate, which is fine, but you are experiencing what nearly all Lonnie Dealers do at some point, which is running out of money.
At some point, once you have amassed a certain amount of working capital, you can not only sustain the business with “house money” but draw a salary too, if you wish.
Sure, you can sell notes, borrow money, etc but it is my personal opinion that, especially in the early stages of this business, you should operate on an unleveraged basis. You are going to start seeing your notes go bad in the future, and need to be financially prepared to deal with that as it happens.
If you insist on leveraging the business, I would try to find friends or other people who have idle IRA money that you could tap at a reasonable rate. I would strongly discourage you from trying to sell your brand new notes at this point… you will take a huge financial hit on the price, and run the risk of really upsetting your note buyer if the default rates are not what you both expected.
I am getting in contact with a few mobile home note buyers today who are experienced in the industry and can give me a quote on a package deal. I am very realistic on the discounts and default rates, and hopefully so are they. I agree on the leveraging side of things, but honestly when some of my recoup periods are only like 4 months, it is pretty hard to lose money on these deals in my opinion when the annual yields are 250%+. I have a few deals where the down payment was larger than my purchase price. I can have a few homes burn to the ground a year and still make money from my calculations. 
I do know the bad part of this business cycle is coming soon though, and I want to be liquid enough to handle it, and also liquid enough to where I do not have to pass on some of these tremendous deals that fall into my lap. I will tread lightly and start doing less deals once I get 15-20 notes created. Right now I stand at 9 with 3 assignment deals done as well. My goal is to just get X dollars per month of passive income, and from then on it is just about sustaining that, or making that more reliable.
