Lonnie Deal - Posted by Lisa in Oz

Posted by Lisa in Oz on March 12, 2000 at 12:24:17:

You’re right about the yield vs. interest. I had the deal figured out on paper–people are the hard part.

It’s ended up that the people do not want to make payments–oh well, on to the next deal. The ex-potentail buyers are living in pretty rough conditions at the moment and I can see that this would be a win situation for them; but, then again, you can lead a horse. . .

Thanks again for the advice.

Lisa Charles
“Lisa in Oz” (temporarily in NorCal)

Lonnie Deal - Posted by Lisa in Oz

Posted by Lisa in Oz on March 11, 2000 at 19:36:26:

Ok, here’s my first attempt at a Lonnie Deal (my guts say no–what do you think?).

Nice mobile home–worst park in area.

Seller firm at $4k (three bed with newer fridge and stove).

Buyers have $2500 cash and can make $500 payments ($235/mo. lot rent). Seller doesn’t want payments, so I’d end up financing the deal.

Seller won’t leave until the end of April–I don’t want to wait that long for her to leave.

Should I get these buyers into another home? They’re not going to be able to buy this one anyway. I sort of feel like I’m being sneaky here because it was the seller who introduced me to the potential buyers.

Appreciate your thoughts.


Personally there was one thing in your post that caught my eye… - Posted by Dirk Roach

Posted by Dirk Roach on March 13, 2000 at 23:19:13:

my guts say no

Why is that? Bad park…(Can you buy the park???), or the seller not leaving until the end of April? Or first deal?

Let’s go by the numbers…
1.) Bad Park… What can you sell this home for? What elements in the park would make this a difficult sale? What does the PM think about the park? I don’t know where in N. CA you are but you have to be out of the San Fran Area, because frankly it would have to be a terrible park for that level of space rent.
However if it is a bad park (I categorize parks, a,b,c and d. as far as sellablity). I like A and B’s and have had my most successes in those types of parks.
I would describe them as the typical type of park that Lonnie Describes in his materials… If you are stepping over junkies then that is what I call a class d park.
However I have done a deal or two in those types of parks too. It’s just different market and has to be handled differently.

2.) As far as the seller not leaving till the end of April, cool not a problem, in fact can used to your advantage. Lonnie’s standard “to buy” contract (found in the back of his books), already has this worked out. If you buy for 4k, then simply get the her name on the line. Get it under contract. Then give her 20 bucks or whatever to make it binding! then you have a month and a half to find a buyer. I have had terrible luck at getting mobile home buyers to wait around with downpayments. They tend not to keep big chunks of change in their pockets and like to go spend it. That is why personally I like to have several deals going at one time. Also I can pop a potential buyer into a deal, and a park that is suited for their best interest.
In a month and a half are these folks going to have the big down payment??? Or do simply get someone else who does have a downpayment to buy the home?

If this is your first deal, (and your in CA) then you simply need to follow Lonnie’s books (they are a great guide), familiarize yourself with the proper HCD (HCD is the Dept. of Housing and Community Development, the body of state government which handles all things mobile home related.) forms etc. and establish a good working relationship with the PM (Park manager).
And do the deal.
As far as price goes (4k) I have NO IDEA AT ALL if that is a good buy price or not, because I don’t know your market, meaning I don’t know what I could sell that home for. I do bet the PM would know though…

As for being “sneaky”… I Dirk Roach…of the Mobile Home Church of CA, declare you obsolved of this Mobile Home sin… Now that you have that off your conscience you are permitted to go out and make money…

Hope this helps

Re: Lonnie Deal - Posted by Tony-VA

Posted by Tony-VA on March 11, 2000 at 19:53:32:

Hey Lisa,

I would not think it “sneaky” if you do things right out in the open. Simply hand the buyer your card and say “if this deal does not work out, please give me a call and I will see if I can find you a home”.

The fact is that these people need a home. If they don’t buy from him, they are going to have to buy from someone else, why not let it be you?

Although I have not yet used this approach, if I read your post correctly, it sounds like you may be able to work some sort of “Option” on this deal. Something like " for X number of dollars, you get the option to buy the home at $4k (or lower if you can) within the next 30 days (or whatever). Then you hook up with the buyer and get their $2500 down to use toward your $4k purchase price, create a note for the rest.

You would have $1500 into the deal.

Get the $265 per month payment.
Running payments even between 24 and 36 months will give you a yield in excess of 200%.

Hopefully others will be so kind as to expand on my explanation of the Option theory. Just a thought.

Best Wishes,


Thanks Dirk - Posted by Lisa in Oz

Posted by Lisa in Oz on March 16, 2000 at 12:23:29:

I would classify this park as being a C-, but the home is fair to good condition. She’s pretty firm at $4000 (that is high, I think), but I’ve got a buyer lined up with $2000 for a deposit. I couple of days ago, I was told she had $2,500 so I’d have to agree with your observation regarding buyers and deposit money.

I thought I was going to have a hard time finding buyers, but, man, I’m having problems finding homes. Got one guy that wants to buy THIRTY single wides, ten years old or less.

What would you do about approaching a C or D type park manager, if you were looking to purchase the park? Would you even buy such an ugly park? Would you spend to fix it up?

Thanks buddy! Got any single wides?


Re: Lonnie Deal - Posted by Glenn-OH

Posted by Glenn-OH on March 11, 2000 at 20:09:26:

I disagree Tony. I would think this would violate usary laws. The key is to buy at $4k (or less) and sell at a higher price. That is where the higher returns are really created. Remember, Lonnie’s standard interest rate is 12.75% not 200% on the note created. If you can’t get this one cheaper now, wait a while until they are motivated. Get your buyers into something else.

Jacob Is Correct - Posted by Tony-VA

Posted by Tony-VA on March 11, 2000 at 23:22:17:

Jacob is correct on both accounts.

  1. What I quoted was potential YIELD, not Interest Rate. Check lonnies book to see how to figure this if you are still confused. These numbers can get mind boggling at times.

  2. This would likely be a tough sell to this buyer because they already know the numbers going into the deal. Although we may not run the loan that long, we certainly are not going to finance the home at a price of $4000 either. It would take some exlaining that a Cash Price and a Financed price are completely different, plus we need to make money on the deal as well. Most people will understand this.

The point of my post was to suggest an alternative and hopefully generate suggestions from others for the mechanics of such an option. It may not work with this particular set of buyers but it may with the next buyer for such a home.

Thanks Jacob.


??? - Posted by Jacob

Posted by Jacob on March 11, 2000 at 21:41:55:


You need to re-read Tony’s post just a bit closer. He mentioned yield, not interest rate. Last time I checked, yield was return on investment, not return on money loaned. Tony said Lisa had a potential YIELD of 200%.

Common sense would tell you that an experienced mh investor like Tony wouldn’t create a note at 200%. That simply doesn’t make sense.

I like Tony’s idea of getting an option. It may be a tough sell to the sellers, but it could be presented as a way for them to get their sales price.