MH BUS. Plan-$30K/Yr. Income - Posted by Fred-Ohio

Posted by Tony-VA on November 19, 2000 at 12:02:12:

I like your thinking and your breakdown of the deals is very reasonable. The truth of the matter is that taxes will take a strong cut in this. Least we forget Uncle Sam’s “Dealer Status” Grinch.

Your figures have the income correct. My only critic would be that you would likely need to pull more cash, or add some cash to cover the taxes (since installment sales are out).

Sorry to even mention taxes. Makes me mad just thinking about the amount of deals we all could do with what we pay in taxes every quarter.


MH BUS. Plan-$30K/Yr. Income - Posted by Fred-Ohio

Posted by Fred-Ohio on November 19, 2000 at 11:54:15:

Let’s suppose you want to give up your $14.42/hour ($30,000/year) day job and live the good life doing Lonnie Deals. What would it take?

An initial investment of $34,100 to purchase 11 MHs plus a further investment of $34,100 every 42 months thereafter.

If you prefer $60,000/yr income just double the above numbers; $90,000 triple, etc.

How did I come to that conclusion?


$3000 Purchase price for each of 11 mobile homes
$1000 Repair and holding cost for each MH
$900 Down payment received for each MH
$3100 Out of pocket cash paid for each MH
$8500 MH sales price
$7600 Amount financed
12.75% Interest on the financing
42 Monthly payments
$225 Payments to you each month

$30,000 Desired yearly income-or—
$2500 Desired monthly income
11 MHs in your portfolio required to provide desired monthly income. (11x $225 = $2475)
$34,100 Out of pocket cash to purchase 11 MHs
(11 x $3100 = $34,100)
$34,100 Needed at the end of 42 months to replace the MHs which have been paid off. (Repeated every 42 months)

Note: If you purchase your first 11 MHs, one each month for 11 months you will need $3100/month cash for each of the 11 months and every 42 months thereafter.

$60,000 Yearly income-You will need 22 MHs and $68,200 cash to puchase them plus $68,200 every 42 months.

$90,000 Yearly income-You will need 33 MHs and $102,300 cash to purchase them plus $102,300 every 42 months.

Think about it.

Any comments or questions welcomed.



If You’re Gonna Make a Plan… - Posted by PeteH(NYS)

Posted by PeteH(NYS) on November 19, 2000 at 23:16:41:

…which is so fun I do it almost daily, why not shoot big? Rather than assume you need an initial investment of $34K, and repeated cash injections every 42 months, why not figure to do, say, six Lonnie deals a month at minimum yields of, oh, 60%, and sell three of them off to investors each month at 18% yields? The dough you collect selling off those three notes should cover the dough you would have needed to save (or borrow or steal or inherit) to buy the three deals you keep – and perhaps even enough to cover your taxes at the end of the quarter. (If you need a little more for the tax bite, maybe one month you just keep two notes for your portfolio.)

If $225 is the standard payment on the notes you’re generating, each month your income will increase by $675; after six months your annualized income will hit $48,600, and after a year you should be raking in $8100/mo, or $97,200 a year.

And as my favorite gurus say, once you plan the work, WORK THE PLAN!

Bonne chance, yo.

Addendum $30K Bus. Plan - Posted by Fred-Ohio

Posted by Fred-Ohio on November 19, 2000 at 19:55:37:

A diiferent spin on the ball.

What if you wanted both a $30,000/year income before taxes to live on AND to be able to set aside enough to replace your MHs in 42 months. You would need $58,900 to invest; you would need to purchase 19 MHs to start with as follows:

$74 To set aside each month to replace your sold MH at the end of 42 months ($74 x 42 = $3108)

$92 The amount required before 20% taxes ($74/.8 = $92)

$133 The amount remaining from $225 MH payment for income($225 - $92 = $133)

19 Mobile Homes required for $2500/month income (19 x $133 = $2527)

$58,900 The amount needed to purchase the first 19 MHs (19 x $3100 = $58,900)

With this plan you could have a $30,000 per year before tax income, for living purposes AND would be able to set aside replacement funds for MHs which have been paid off when the 42 months were past.

$60,000 This income requires 38 MHs ($117,800 initial investment)

$90,000 This income requires 57 MHs ($176,700 initial investment)

Conclusion: Accumulate $176,700, invest it in 57 MHs, sell them, buy and sell 57 MHs every 42 months and live the good life as long as you repeat the process.

What do you think of this business plan???



Re: MH BUS. Plan-$30K/Yr. Income - Posted by Carlene (Maine)

Posted by Carlene (Maine) on November 19, 2000 at 19:38:07:

Hello Fred,
Thanks for this post. I have a partner who was wondering about this kind of thing.
One thing we talked about was the price of the money you might have to borrow. That would be another ‘cost’ of doing business. If you had to sell notes or take a loan, some of your profit would disappear. Just something to consider.
Thanks for the breakdown though. It has me thinking!