Posted by Philip on May 21, 2003 at 24:30:25:
Sounds “good nuf” to me.
I would think your money is working for you better than it would be in most other investments.
I feel I am at about the same point.
Philip
I keep paying too much or am I… - Posted by Dan (MD)
Posted by Dan (MD) on May 20, 2003 at 21:34:38:
My first home I paid $2500 - WAY too much, but I wanted to get started to see if I could do this or not (I’m making about 35% on this one after A LOT OF WORK)
Then the second one I got was a MESS, paid $1200 which was about $800 too much, but the park wouldn’t reduce the back lot rent (That was all back lot rent plus the current month) but I sold it after three weeks of rebuilding (making about 120% on this one)
The third one I got for $900, it was worth about 10 bucks when I got it, but the park manager really wanted to get this lady out of the park (still haven’t decided if this one was worth it or not, got some serious points with the PM but I’ve had a major rebuild), I’ll have it finished tomorrow and hopefully sold at the end of the month.
Then the big one, I found a double wide that needs to be moved and the owner had 8 days to get out and his alternative was to take a chain saw to it so that the park wouldn’t get it either (that was what he said he was going to do) anyway, he gave me $10,000 as a start and I came back with $5000…he accepted without blinking…D*MN I hate that, I really think I could have gotten it for half that, plus I have to move it now (another $3000 to the mover plus incedentals) but it is a double wide and I should be able to get around $20,000 for it…I hope, haven’t tried anything this big yet.
I did okay on my fifth home though, he started at $7500 and I got it for $2900 but again I have to move it, it’s VERY nice, should make a decent profit on this one…
I do feel like I’m paying too much for these, but I’m still making a good profit on them, so far. I just hate buyers remorse I guess. I just have to keep sight of the big picture and not get too over extended.
Anybody else have similiar experiences?
Re: I keep paying too much or am I… - Posted by Jim Schad
Posted by Jim Schad on May 21, 2003 at 14:39:33:
Warren Buffet said he has NEVER bought a stock at its low nor sold at its high. The process becomes more refined as you learn. Keep up the good work and optomistic attitude.
Re: I keep paying too much or am I… - Posted by Phil Pelletier
Posted by Phil Pelletier on May 21, 2003 at 14:00:15:
You are doing phenominally well for just starting in the business. You and I spoke during your water bath in what I think was your first purchase. You have nads of steel to keep buying homes after that fiasco. I applaud your guts. If you want to feel good about your situation, simply total up the dollar amount on all the contracts you as of today. Pretty nice load of cash, wouldn’t you say?
As far as your negotiating technique, you may want follow the advice of the guy who said use Lonnie’s technique of asking them what they want, flinch, walk away, ask them what they REALLY want, get in your car, call them tomorrow and START negotiating down from there.
By the way, just because you agree to pay $5,000 for a home, does not mean you have to pay $5,000 for the home. There are a ton of ways to get out of a verbal agreement and still come out smelling like a rose. If I found myself in your position where I felt I offered to much, I might say “Hey, I called a mover and they said that not only do I have to pay to have the place moved, but the set up charge and the permits are EXTRA! I didn’t know that when I offered you $5,000 Silly me!. Your place is nice, but with the extra costs I will have to pay, I can’t afford to pay you the $5,000. If you want to go out and try and find someone to pay you the $5,000, I WOULD RELEASE YOU FROM OUR AGREEMENT WITH NO PROBLEM, but If you want to deal with me, I will have to total up my real costs and get back to you on an offer for your house”
Can you picture yourself saying that?
You are doing great. Just step down the buying tempo a notch and you will put more money in your pocket.
“You make money when you buy, not when you sell.”
“If you are not a little embarrassed to make the offer, you are offering way to much”
All those cliches will help you in negotiating with people.
Lastly, you may want to look for distressed people, versus distressed homes. Old cliche, but it will help make you succesful in the mobile business.
You are doing great.
Phil Pelletier
Re: I keep paying too much or am I… - Posted by Don-NY
Posted by Don-NY on May 21, 2003 at 08:52:43:
That is just about how our (my wife and I)business has been going too. But now we have owners calling us begging to take trailers from them so they can close on houses! I think you are doing above average except for all the work you are having to do. I found paying a little more for trailers that need less work make a better profit. But thats just in my microscopic market 1 park 6 deals in 9 months
Re: I keep paying too much or am I… - Posted by ScottS(NC)
Posted by ScottS(NC) on May 21, 2003 at 07:46:45:
Dan,
Over all your doing fine and Lyal is right your system will develop better with each deal. One small constructive criticism I have for you would be, on your double wide deal you state " anyway, he gave me $10,000 as a start and I came back with $5000…he accepted without blinking…D*MN I hate that, I really think I could have gotten it for half that". This tells me you are not using Lonnies Golden questions. I think every system should include these two money making questions. If I pay you cash today whats the absolute lowest you would accept? No matter what the response your next step is the “flinch” or I occasionally use the “whistle” starting at a higher note lower your whistle and let it trail off very effective if done right. Look around some more I like to take notes on all the problems and be sure they see me joting down all the problems, then just as your getting in your car to leave, go ask them Is that price the best you can do? Once you have this lowest offer now you start negotiating. A day or so later call back make them an offer even lower tell them your accountant/private investor (in my case that would be my wife) said that is the best we could do, becuase of fixup/neighborhood/park/schoolsystem/year of trailer/well water in park/not enough yard/to much grass to mow ect… put here whatever you don’t like about the trailer. Remember as wise men before me have said they are trailers when you buy them and Manufactured homes when you sell. HTH Take Care ScottS(NC)
Re: I keep paying too much or am I… - Posted by Lyal
Posted by Lyal on May 20, 2003 at 23:09:08:
Dan,
After a while you’ll fine tune your process. At this point it sounds like you’re doing great. Really good to post these so others realize how forgiving the business is while you’re getting your OJT.
All the best, Lyal