I don’t know what you really have to lose if you only have $1500 in the deal. You are not going to find great credit risks in this business as a general rule. Sometimes you have to baby them along to keep those payments coming but if you work with them and don’t let them walk all over you IMO you will be okay. I don’t have a lot of experience so take my advice with a grain of salt-- I have only sold 5 MHs so far but have not had to repo any yet. Most of my buyers had problem credit and I was very reluctant to sell but they are all still current. I had one get behind and gave me a scare, but he has caught up on his payments after I had a talk with him…I just told him I had 20 people who wanted to buy his MH from me if he couldn’t make the payments and I didn’t have time to mess with a bunch of late payments.
Even if you have to take it back you will be okay…just sell it again w/financing.
Questions on screening 2 buyers - Posted by Debra G - VA
Posted by Debra G - VA on August 02, 2000 at 20:50:05:
I would love feedback from more experienced investors on two potential buyers for my homes. I’m still learning how to screen buyers.
Woman getting a divorce. Steady job, but credit history really shot. I kept turning her down for one of my renovated homes, but she called tonight and asked if she could put $3,000 (!) down, would I sell her the home? (This is the fourth time she has called in the last two weeks, and she has kept increasing her down payment offer.) I would have a little over $1,000 still invested in the home, and she would pay $150 a month for 4 years. My instinct is yes, but I’m new at this. Your opinions?
Couple looking for a fixer-upper. Can put $500 down, and pay $160 a month. Have been living with family and receiving disability, but will be going off disability and starting a job this week. I’ve already fixed up my current two homes, but might be willing to look for a fixer-upper to sell them. Any suggestions on how much I might risk (if any) on them?
Thanks for your feedback, folks. I’m still struggling to finally sell my first two homes, but at least I’m starting to get more calls. But after my first two broken contracts, I’m a bit gun-shy with folks without at least good rental references. Which is just a little crazy, as one of the buyers that broke her contract had a great job and rental reference (she just decided to rent-to-own a house instead!)
Re: Questions on screening 2 buyers - Posted by Dee-Texas
Posted by Dee-Texas on August 02, 2000 at 20:57:40:
Show Me the Money! S The Divorcee, good job, you’ll only have 1K in it after the 3K down. I’ll take a bird in the hand everytime. Make sure you have the cash in hand, lot rent paid and everything spelled out and signed contract before you let her near the mobile.
Good Luck,
Dee-Texas
Hallelujah!!! Can I get an AMEN?!? - Posted by Dirk Roach
Posted by Dirk Roach on August 02, 2000 at 22:15:45:
I’m with Dee here!
Basicially folks what it all comes down to are two things:
ABILITY: Does the buyer have the ablilty to make the payments in the context of his/her/their budget?
(Check pay stubs)
INTENT: Does the buyer have the intent to make the payments? What is their track record like, in regards to having a roof over their head(s)?
(Call up the old landland…“Would you rent to, such and such, again?”
Verify employement, Verify previous landlords.
And go with the cash. That’s money that you can put back to work on another deal.
Dirk
INTENT: Does the buyer have the intent to make the payments? What is their track record like, in regards to having a roof over their head(s)? (Call up the old landland…“Would you rent to, such and such, again?”)
I NEVER ask a landlord that if the person is currently living there. Most landlords will LIE if the tenants are deadbeats just to get them out (through you) and not having to evict them. Just my experience.
I tell the landlord I am a creditor (which I am) and am considering extending them credit ( which I am) and do they pay well?
Their lack of track record is the problem. - Posted by Debra G - VA
Posted by Debra G - VA on August 03, 2000 at 10:29:01:
I agree with those two qualifications. But I’ve been really surprised how few people can provide rental references. Neither of these buyers can. I’m probably going to accept the woman with $3,000 down (IF she shows up with the money). That should be a big incentive for her to keep making payments.
But I’m trying to decide if I should sell rougher (fixer-upper) homes to folks that can’t provide a decent rental track record. With them providing just $500 down, and my having maybe $1,000 left in the homes - would it be worth the risk?
It has so far seemed (with my limited experience)that folks with good references expect to be able to buy homes in good condition, even if they can’t qualify for bank loans. But, having gone through the headaches of renovating two homes, I would LOVE to sell AS IS.
But folks willing to buy homes needing more than minor repairs usually have really lousy credit and no rental references. Most at least have some kind of a job, although usually not a long-term steady one. Would you sell to these folks, if you had less than $1,500 at risk?