Posted by John Merchant on September 13, 2006 at 12:06:12:
Yessir, see if you can’t the middleman be…either get that note at discount from S, where HE takes the hit, or if he’s too tough, you work with the Buyer and have him give a BIGGER note that you can then buy at discount (from S) giving S his whole pie but getting you the note.
How to facilitate between buyers & sellers? - Posted by CR Smith
Posted by CR Smith on August 30, 2006 at 09:33:22:
Lonnie mentioned this in both books, but I wondered if anyone has had luck with this strategy.
i.e. I found a great little 91 trailer in great condition. I’ve tried negotiating the guy down to a price that’s good enough for me, but he’s stubborn, and doesn’t care when he moves.
I was ready to move on, but a guy who called on my Lonnie ad the other day wants to move into this exact area (and no other area) AND he has 2K to put down w/ a great work history and credit. Don’t want that money, I mean, that buyer ;-3 to slip away, so what can I do?
A Banker be - Posted by John Merchant
Posted by John Merchant on August 30, 2006 at 14:33:06:
I’ve profited from this situation a number of times and here’s how:
I tell the S that if & when he finds a B that he and the MHP both like, who can make a decent down payment and has OK credit and criminal non-record, that I’ll be “the bank” and finance the deal for the B.
I then meet with the B and structure a note that the S will take, and which I then buy at a discount.
If the S won’t sell the note at a discount, I have the B give a bigger note and I then buy that note and give the S 100% of his sales price…then I have a nice note yielding me the interest rate I want.
Re: Uphill Battle - Posted by JeffB (MI)
Posted by JeffB (MI) on August 30, 2006 at 09:36:05:
Until the seller of the home is motivated, this is going to be an uphill battle all the way. You can’t pay retail and sell for retail on a note, even if they have good credit and a decent down payment. That’s not how Lonnie deals work.
So you have a good buyer waiting in the wings. I would find out exactly what it is he’s looking for, and go find a motivated seller who has one of those.
Re: A Banker be - Posted by CR Smith
Posted by CR Smith on August 30, 2006 at 15:28:16:
John,
You lost me on the next to last part…I’m not following the part about how you buy the note at a discount … how exactly is that done?
Also, in the last graph, what if the buyer won’t take a bigger note (after seller rejects discounting the note), then you’re out of luck. How do you make it bigger–through interest rate primarily or what?
Thanks for replying.
Re: Uphill Battle - Posted by CR Smith
Posted by CR Smith on August 30, 2006 at 13:19:24:
“So you have a good buyer waiting in the wings. I would find out exactly what it is he’s looking for, and go find a motivated seller who has one of those.”
Yessir, exactly what I’m doing, but he really wants to move fast. If I think I might lose him to someone else I might try the finder’s fee approach. What’s a standard number for that?
Of course, another strategy is to tell the seller that while the buyer will give him a down payment, he (the seller) will have to finance the rest of it. In fact, very few people will be able to or qualify to borrow the money. Meanwhile, he will have paid lot rent and lost money, and I will pay cash tomorrow.
That’s what I’m about to call and pitch, after that, dunzo with this guy.
Re: Uphill Battle - Posted by Paul
Posted by Paul on August 30, 2006 at 10:14:36:
The other alternative would be to present the buyer to the seller and take a finder’s fee.
Re: A Banker be - Posted by John Merchant
Posted by John Merchant on August 30, 2006 at 15:47:02:
OK, let’s use an example here, with some real numbers:
S & B agree that B will pay $25,000 for the MH. $5000 cash down and he’ll give S a note for $20,000 (or more, read on).
If S is unwilling to let me buy that note for $18000 or so, then B will just have to give a bigger note so I can pay S his full $20,000 cash, but then I’ll get a note with a higher yield.
If neither S or B will cooperate, then I won’t play or get involved.
Capiche?
Re: Uphill Battle - Posted by Joe-WA
Posted by Joe-WA on August 30, 2006 at 14:28:22:
How about telling the seller that you have an interested buyer with a good down payment but he would need to take payments on the balance. You don’t ask for anything from the deal but you let him know that you will buy the note at a discount if he isn’t willing to take payments.
Re: A Banker be - Posted by CR Smith
Posted by CR Smith on August 31, 2006 at 09:15:57:
Clear as an unmuddied lake now…Those numbers helped. I might can make something work in this situation.
Thanks to everyone for their help.
Re: A Banker be - Posted by Bob Smith
Posted by Bob Smith on August 30, 2006 at 17:17:36:
Doesn’t that leave you with an investment far greater than the wholesale price of that mobile? I mean, would you pay $18-20k for that mobile as a straight Lonnie deal, even in perfect condition? Apparently you would, which leads to why? The yield seems a bit low for the risk.