My first near no-down deal ready to happen - Posted by Kevin

Posted by Jason Bedunah on June 09, 2001 at 14:52:12:

$15-20k for a lot that only gets $125 seems too high, doesn’t it?

I show that after 5 years you’ll have turned your $1500 into $10,500 of cash after servicing your debt (of course this number will dwindle after you account for taxes and other costs). This doesn’t include months where you may have to take out of pocket, though. Not too bad, actually. I might think twice about putting the car up. I think 18k + the car title (6k) is waaaaaay tooooo much. I wouldn’t risk the car and start the offer at $12k.

Just my thoughts.

My first near no-down deal ready to happen - Posted by Kevin

Posted by Kevin on June 09, 2001 at 14:24:38:

Dbl wide aluminum 1979 in reasonable shape on it’s own fenced-in dirt with small driveway. Lots are selling at $15k(lucky) to $20k. Asking price (foreclosure) is 22k. Lot rents in the area are $125 + for this type. There are several elderly owner occupants in the neighborhood (nice yards) mixed in with about 35% rentals (dirt and home) renting at $375 to $400 per month.

Needs - carpet, three areas of flooring replanced (4’x4’) at most), a stove, cleaned real good, a ceiling fan or two, and maybe some pretty paint. Oh, I’ll also put a flag pole up with the rebel flag and a NASCAR falg too - Just kidding about the flags. Total estimated cost to fix up out of my pocket, maybe $1,000. Of course, that depends on how much work I can do myself.

I’ll offer $18K for both, and add my car title (6K) to get the title to the MH seperate from the mortgage on the land. That is, of course, if the appraisal will come in favorable for the land, which it will. When the estimated value of MH(say 2k to 3k) is paid off, my car title releases. Have the money not to do the car title, just thought it would be nicer using some one elses money for the deal.

Sell MH for $500 down and $250/mo at whatever rate for 5 years. Rent the land for $125/mo.

My note - Roughly $175
Monthly cash rent and note - $350 to $375

Anyone diagree?

Re: My first near no-down deal ready to happen - Posted by Kevin

Posted by Kevin on June 27, 2001 at 11:48:33:

Thanks for the response. I have been out of town with a family emergency an havent’ been able to thank you earlier. I did want to ask you another question though. I’ve made an offer of 15K (which I can get through an equity loan on my house). This offer was for the MH and the Land. MH value $8,000-$10,000. The land value is from 15K-20K. I understand your conclusion of 10K after 5 years based on a 18PV, 5N, and 9I; however, the MH would bring in an additional $250/mo w/$1k down for 4 years resulting in 17k additional $ over the 5 years. This would produce a monthy cash flow from my lot ($125) and their MH purchase ($250/mo) of $375, or $200/mo over my note. Remember, my monthly note obligation is around $175 (based on 15yrs.). This would allow me to pay off the MH and land plus have some profit over the 5 years, provided I passed on the entire $375 onto the bank holding the 15K note on the land. I should be receiving a total of $24,800 over the 5 years, thus having the lot paid off, and an additional 5K - 7k (after fix-up and debt service. Lot payment ($125 PV, 5 n)= $7.5k, MH note payment ($1,000 PV, 12 i, 4 N)= $17K. 17K + 7.5K = 24K. Then lot payment of $125+ for the rest of my life. And, paid for out of some one elses pocket.

Hope you understand what I just wrote.

They didn’t accept my offer and countered with $19,500. The place sold for $30k in 1993. I’m thinking of countering with another offer at $16,500. What do you think? Am I missing something here. I read Lonnies book and saw where he bought his wife a lot, but didn’t read anywhere else where he spoke lots. To me this sounds like the way to go when you can work a deal like this. Thanks again for your input. And, sorry if I’m just too dense that I’m missing something here.

Re: My first near no-down deal ready to happen - Posted by Rick G.

Posted by Rick G. on June 09, 2001 at 16:55:52:

I have to agree with Jason. This deal doesn’t sound all that good. From my calcualtions you have a thin positive cash flow for those 5 years you had the MH on contract. In fact, you might even have a negative cash flow. Taxes, lot up keep, and such. Not to mention if something goes wrong you risk losing your car in the deal. You might just see if you can get the MH instead of both. If you are looking for long term money, I would drop my offer down in the range of what jason suggested. You would have a little short term money for the first 5 years. You never know when it is needed. And then long term for the lot. You might consider an option on the land. Say with an extra $125 that would go towards the downpayment for the 5 years you are on contract for the MH. Then when the option is up they can finance the rest of the lot price and pay you in full the value of the lot minus the equity they have. Or you could refinance the rest. There are several options.