Posted by Tony-VA on October 24, 2000 at 12:46:52:
Hello Debra,
You will get a lot of calls to take over payments on mobile homes. Typically they are newer homes that are overfinanced. This puts them “upside down” in the deal. Owing more than the home is worth and simply looking for a way out.
This is NOT a Lonnie deal. Remember, Lonnie deals are homes that we buy for cash, and sell on terms. The original loan on this home is far more than one should pay for a traditional “Lonnie deal”.
There are some investors who make money on these types of deals but I don’t know many who would recommend you try this type of deal on your first few deals.
If you do traditional Lonnie deals, you have Lonnie’s material to guide you. If you do these assumption type deals, you won’t have the same protection to follow and keep you out of trouble.
This may be why you did not receive feedback from the first post.
Need Help ASAP! How do I work this deal? - Posted by DebraAB
Posted by DebraAB on October 24, 2000 at 08:51:18:
I posted this below, but didn’t get an answer and I really need to get help ASAP.
Found a 1998 14 x 70 3/2 MH in a park with an assumable mort. of #194/mo. Owner does not want equity. He moved out 3 hours away and his girlfriend is still there waiting for the home to sell so she can go with boyfriend. Says payoff is about 14,500 or 15,500. Says Oakwood Homes has its own finance company and he assumed the loan with $1,000 down which was applied directly to the principal and Oakwood didn’t make anything (he says). Taking care of paperwork, etc is just a courtesy they provide. they don’t want used homes back so they make it easy to assume.
How should I handle this? It’s a nice home and I just want to Lonnie deal it to someone else. Please help me.
Re: Need Help ASAP! How do I work this deal? - Posted by Karl (Oh)
Posted by Karl (Oh) on October 25, 2000 at 01:09:39:
Tony is right, this isn?t a Lonnie Deal. But to me it looks like it could still be a good deal. In my market 3 bedrooms are very hot. You could possibly do this on a lease option.
If that same home was in my park with those numbers I would jump on it. But I don?t know your market. You?ll have to check it out. First I would find out what the appraised value was on the home, or NADA value, to determine if there is any equity in the home. If its upside down, probably don?t want to do it. If there was some equity, I?d assume the loan, or lease/option it from the seller. Then I would advertise it as a lease option (or land contract as everyone around here calls it), collect a couple grand up front from a buyer as option fee, lease it out for several years with an option to purchase down the road. Collect a monthly lease payment of say $300 or more, whatever your market will support, as long as its more than your payment. Part of this payment to you could be rent, and part of this payment is applied to the purchase price. Several years down the road your leasee either exercises the option or walks. If they walk, lease it out again. This all assumes the park will let you do any of this. Check this out first, of course.
Perhaps if this seller is motivated enough they can be talked into paying the $1k assumption cost. Or more.
This is a quick and dirty explanation of how the lease option works. Before doing one, I?d order Ernest Tew?s ?Getting Rich? program, and maybe Lonnie?s home study course. Ernest explains how to do net lease options and provides all the necessary contracts and paperwork, and Lonnie gives some good tips on his study tapes on how to do a rent to own deal. For heaven?s sake, don?t rely on my explanation to put this deal together. Get more info from these two experts.