Re: Perfect MH note? - Posted by David P. Butler
Posted by David P. Butler on June 16, 2001 at 19:11:55:
Hey… that’s a catchy moniker! Wonderful… I think Tin Can Alley will do you a lot of good with regard to your objectives. In fact, we discuss your particular objectives at great length in several different areas of Tin Can Alley, particularly in the section related to “Lonnie Dealers” in the chaper WHERE TO FIND THE NOTES, as well as in the various deal structuring techniques and discussion related to Lonnie Dealers in the Section “Showtime”, related to NEGOTIATING DEALS.
You should see from this that a great deal of what we suggest in those discussions, fits hand-in-glove with Lonnie’s instruction and training for mobile home investors, in pages 178-171 of his Deals On Wheels course!
I regret to say that there is no list of freestanding MH note buyers, particularly at a “national”, and/or institutional level. That market changes daily. What few “national” buyers claim, and what they do, are far apart from reality. There really is no such thing… such as that which we have in the real estate note markets. So, unless you are creating paper similar to that which would come out of retail dealerships (and mostly on newer doublewide homes less than 15 years old), “bundling” portfolios of these notes would not necessarily give you any particular advantage (and even those markets are being hit hard right now)… it would actually be somewhat counterproductive, if your objective is to build up “Lonnie” portfolios, since the mass wholesale of your notes, partial or otherwise, would be depleting the future cash flows that are the end-game of what “Lonnie Dealing” is all about.
However, there is discussion related to the fragmented nature of MH note markets, what is slowly developing to channel funds through the secondary markets, and how and where to sell the notes you create on an as needed basis. There are numbers of small note buyers and brokers operating in various parts of the country who handle MH notes… in easily digestable amounts, which would include anywhere from one or two notes, up to $1 million portfolios. But, the greater flexibility appears to be in the 1 to 10 note portfolio range… with regard to selling partials, split-funded deals, etc… and most particularly with the types of deals that come through “Lonnie Dealer” originations!.
We are slowly training small investors in how to safely work with this type of product, and teaching other brokers to do the same thing. The private secondary markets are a broker driven community however, and until enough note brokers understand how to put this kind of localized investor purchase money together, we still are shopping every day. Based on current deals in the works, we anticipate another $2 million being raised throughout the course of this summer. But like the $550,000 I just raised $550,000 this past month, it is reserved locally for my own purchases of Lonnie deals and similar small unit packages, in southern California, Arizona, Las Vegas, and possibly the Boise area.
However, I do have an investor with $200,000 for Indiana purchases, and a former hard money lender out of New York who is trying, but not yet comfortable understanding how to convert his investors to underwriting this type of product. He is coming down to Orlando for the NoteWorthy Convention next week to get some hands-on coaching from me on that end of it, so possibly he will develop resources from that end of the table, that could conceivably service your NY inventory needs.
I have worked with several increasingly successful note brokers in the Chicago area, and some have put together several larger mid-range portfolio deals that they needed help with in placing with investors. Hopefully they will soon have gone far enough in the local markets to have started generating small local buyers more suitable for bankrolling “Lonnie Deals”… I’ll have to wait until I get back from Orlando to determine that, due to current time limitations.
Hope this is at least of some value to you, and look forward to your growing success in this end of the marketplace!
David P. Butler