Has anyone ever tried... - Posted by diana

Posted by Jonathan on July 08, 2001 at 19:49:44:

Quick comment on selling computers on notes. I am in the computer business. :slight_smile: Not only could they easily walk away, they depreciate so fast. So if you sell one on a note, they pay for 6 - 9 months and then stop, it’s probably not likely you could make your money back if you had to “reposses” the computer. But of course, with anything, as long as you buy low and sell high (or very high) you should still make money.


Has anyone ever tried… - Posted by diana

Posted by diana on July 06, 2001 at 17:03:31:

Has anyone ever tried Lonnies concepts on anything other than Mobile Homes? I just received his materials and he mentioned if you didn’t like MH go out and find something else you can create a note on.
A light bulb went off in my head. I have a an idea,(at least I think its brilliant) but wondered if anyone else has applied his note creations to something other than MH.


In short… - Posted by David S

Posted by David S on July 09, 2001 at 24:07:58:

there isn’t anything made that you can’t create a note on. Why on earth most “investors” will allow their buyers/tenants/etc to pay anyone else is above my head. I’ve even paid off their loan company notes, restructured the payments (can you spell higher yield) just to name a few.

I have been in this business for just over 25 years. The “paper” you can create is endless. At last count, the average “income stream” from my properties was 3 per with my record being 8. The sky truly is the limit.

David S

Yes - Posted by Karl (Oh)

Posted by Karl (Oh) on July 07, 2001 at 23:39:48:


I sold a woman a mobile home last year. Then she needed a car. So I bought a nice used car for $1600 cash, and sold it to her for $2200 on a note. But there were selfish reasons. If this woman didn’t find a reliable car, she couldn’t go to work, and then would have trouble making mobile home payments to me. A year later the car is still running strong, and she has never been late on a payment.

I’ve sold appliances on notes a couple times, where I usually got them for free, and sold for several hundred each on payments. I’m selling a woman an awning for $500 next month on a note. The awning was free, I’m paying a guy $100 to install it.

But the concept works wonderfully with mobile homes. What was your idea?

Karl Kleiner

Re: Has anyone ever tried… - Posted by Doris - Va.

Posted by Doris - Va. on July 07, 2001 at 10:44:57:

It’s like the buy here - pay here concept car dealers use.

Also I remember when most local furniture stores which sold appliances tv’s etc. had in house financing. Some are still operating that way today.
The interest rates on these businesses are astronomical but people keep going there.

I bet they make more money from financing than from the actual sale of the product.


Re: Has anyone ever tried… - Posted by Chuck (AZ)

Posted by Chuck (AZ) on July 06, 2001 at 20:46:03:

I don’t know if this has spread to the entire country yet, but out west here we have something called “Title Loans”.

You get a office in a high traffic location (strip center/previously closed gas station/fast food joint). People who need money bring their (clear) car title to you. You make them a loan, and hold the title for security. If they default, you repo the car and re-sell it. They continue to drive the car for the term of the loan.

Basically, it’s a blending of the payday loan concept and a pawn shop (of sorts). The amount loaned is usually between $300-$500, depending upon the value of the car. The interest rate can be whatever’s legal in your state.

The “payday loan” place down the street from me charges 443.3%

I’m dead serious.

Re: Has anyone ever tried… - Posted by Mike Behlen

Posted by Mike Behlen on July 06, 2001 at 19:17:13:

Most low income areas have the rent to own
for tv’s and appliances. Same concept.

Re: Has anyone ever tried… - Posted by scott az

Posted by scott az on July 06, 2001 at 18:53:59:

I’ve never tried but I also toyed with the idea of creating notes on other items besides mobile homes…
I guess you could do autos, furniture, appliances, power eguipment anything you can get your hands on cheap enough to turn a decent profit. It may be to much of a headache though, but it could be very profitable. anyone with experience please reply…
scott az

Re: Yes - Posted by diana

Posted by diana on July 08, 2001 at 09:32:08:

Hi Karl,
Thanks for your response.
My brother builds computer systems mainly as a hobby. As you can guess he can build better, faster systems than the what you can buy on the market (that is kind of beside the point) The real point being that he can also build them for less than half the cost of retail. He has sold a few to friends and family, but he only makes about $200 over what he puts into it. If he went with my idea he could easily make $1000 or more each system.
The rent to own stores have computers, but not anywhere near the quality he has. I suggested to him that he build the systems and I take care of (you guessed it) the financing. The only thing I worry about is if the people skipped town with the computer. Like it said in one of Lonnies books, he never had anyone move a mobile home on him, but I think a computer would be a little easier to skip with.
What do you think?
Our little niche would be

Here’s another way… - Posted by Eric C

Posted by Eric C on July 08, 2001 at 23:55:02:

Hi -

Long ago I was an Apple Computer Dealer. Not just a dealer, but one of the very first! And after that, I sold IBMs, Compaqs, etc. I also built computers when the margins were tight.

Nothing has changed much in the computer business even after all these years. Oh, the hardware is faster for some things(even if my new Intel based P4 Windoz machine does take forever to boot)and the software is a little more sophisticated (bloated), but overall it’s still the same game.

For the little guy it’s “belly to belly”, one sale at a time unless he gets really unlucky and ends up building systems for the local school district, or hospital, or…

Write this down: if you don’t have a (big)profit in each one, then it doesn’t help you to sell a bunch of them. You can’t make it up in volume. Do your math.

Here’s the major problem with personal (or small business) computer sales – your customers will want support. They will want warranties. They will, in the end, be unreasonable and want more than they are willing to pay you for. (which is why the larger companies now charge for service)

On the other hand, if you really are going to go this route, try talking to your local consumer credit folks such as Beneficial (Household Finance) NorWest, Blazer, or whoever you have in your area.

The person in charge of this office is usually under some form of a quota and has to bring in (buy) a large amount of paper (financed sales agreements) each month; typically that amount can be $500K or so. If they are unable to reach their goals, the company will replace that person with someone who is able to do so.

Get your facts straight. Run your numbers. Let them provide the financing for your customers. Or you can provide it and then sell it to them. (there are benefits to both)

Your customer gets financing for the long term. You get paid in cash today.

There will be some issues you have to work out, but these folks are usually easy to work with. They handle their own collections. You may be required to have a reserve account to start with, but that’s nothing you can’t handle.

People are people. They sometimes don’t make their house payment, or their car payment. Think they will put their computer payment first? I don’t think so.

Keep yourself out of the line of fire. This is not a high margin business anymore ( I use to net about $3K per system).

If you have questions, just ask.


Eric C

PS - when times were really tough, we would sell systems to doctors and other professionals, but with a twist. One physician group would finance another’s computer systems. The financing was sold to their pension plans. Neither group would dare default, because they each held the “paper” for the other.

And by the way, we got paid cash for the systems - no discounts. We also got paid a premium for providing these “investments” to their pension plans. Nice.

In the long run, forget the equipment. No matter how much you may like the business there are far better opportunities out there. Take care.