Take over payments? - Posted by Rick

Posted by Jerry Freeman on May 09, 2002 at 07:08:59:

… the usefulness of the NADA guide. Either you haven’t read ALL the posts about it or you’ve only selectively remembered (and misunderstood) the posts saying that it’s useless for determining BUYING prices.

Yes, get the software. It’s one of the most useful selling tools I’ve found if you’re going to be selling somewhat below book value. And, it’s MUCH easier to use than the book. It’s worth it just for the time and aggravation it saves.

All the information is in previous posts. Please review again. I’ve posted on this a lot, and the discussion strings I’ve participated in have had contributions from some of the most experienced investors on this board. Try searching on “Freeman” and “NADA” (use the search mode that selects “all” rather than “any” words.)

Best wishes,

P.S. It’s not useless for determining buying prices. Because, by getting a sense of how retail MH prices in your area compare to the book values, you can get a general idea of what you could likely sell a particular home for. Knowing that, you can evaluate how much fixup work a home needs, how much profit margin you need, and then you can decide whether or not you will be able make money on that home at a given purchase price.

Take over payments? - Posted by Rick

Posted by Rick on May 07, 2002 at 14:20:42:

I have been looking through my local “thrifty” paper at MH’s for sale. Almost half say “take over payments” I realize that most of these probably owe more than it’s worth due to depreciation. Is there a creative way to work with these types of deals or should I not even bother?
Question #2 How do you determine FMV? I have read other posts that say it’s like a house, you have to do comps. But what if there haven’t been any recent sales in a particular park? Or none comparable? Some of the posts said to go around and ask managers what they are selling for. This just doesn’t seem too accurate for me. With a house, you can look up the comps but where do you go for MH’s?
I beleive there is potential in this area as it is cluttered with MH’s everywhere. This area has been hit especially hard and there are many in trouble. MH retailers are popping up like ragweeds. (4 new retailers within 5 miles of me within the last year)
Basically, “How do you determine what you can easily re-sell for?”

Re: Take over payments? - Posted by Chuck-NY

Posted by Chuck-NY on May 08, 2002 at 23:40:29:

If you are going to get serious with this business I would recommend the NADA software which will give you a print out of the value of a given MH. Then you can show your buyer the MH value.

Going against the norm…in my area I decide how much I’m going to pay and not by what MHs are selling for. If you stop and think about it the normal used MH purchase price based in any area is normally based on an individual or family who plan on moving into said MH. So how can you compare that purchase price with with a purchase from a Lonnie Dealer…you can’t…the two are not “comparable” So I set my own guidelines and I say I will pay from $200 up to $2,500…and they must be 1976-1992…if not I move on to the next one.

As far as taking over payments…you are looking at a motivated seller…you need to find out if that motivation comes from something that will benefit your business or will have an adverse affect on it. In other words…they want out cause they’re closing on a house next week (good) or they want out because rents are going way up,new neighbors have drug parties, or they just discovered a major structural problem with the MH…list goes on…

Re: Take over payments? - Posted by Max (CO)

Posted by Max (CO) on May 07, 2002 at 18:09:45:

I called Conseco to see if I could take over payments on a mobile and they would not allow it since I was already paying a mortgage on my house. You will want to talk to the lending companies first. If they are private notes, you may have a better shot. Just my 0.02

Cheers, Max

are you in alabama - Posted by brad

Posted by brad on May 07, 2002 at 14:33:39:

that sounds like the town i live in, when we went to get our water turned on and told them our address they knew it because it was one of 4 houses in the town. were do you pay your taxes? that office is were you will find out what others have sold for, if the sales are not under the table anyways. my local has to have mobils inspected so they have a record of all in county. and who owns them.

Re: Take over payments? - Posted by Rick

Posted by Rick on May 09, 2002 at 06:19:12:

Thanks for the advice. Now I have conflicting views. I have read several other posts that say the NADA value is useless. Also, if you do want to use NADA, you don’t have to buy software, it’s available for free on the net. Ultimately, after reading tons of posts concerning MH values, it’s just a matter of judgement. Anything is only worth what someone will pay for it. NADA may be good for used cars because a car is a car is a car anywhere you go. Although MH’s are “mobile” they rarely are moved more than 75 miles and location and local economic variations play a large part in determining value. I thank you for your reply. It helps very much to get as many different viewpoints as possible to determine my own philosophy.
Best regards,

Re: Take over payments? - Posted by Rick

Posted by Rick on May 07, 2002 at 19:53:19:

I probably didn’t word it correctly. I do not intend to take over anyones payments. I’m sure 99% of them owe more than it’s worth. I was just hoping that maybe someone had a creative way to deal with these situations as there are tons of them in the paper. Also, I don’t understand why they would not let you take over payments if you can afford it. Is there a law that says you can only have one mortgage at a time?
Just my .02 worth (probably not worth that!)

Re: are you in alabama - Posted by Rick

Posted by Rick on May 07, 2002 at 19:48:23:

Thanks for your reply. I posted a response earlier but for some reason it didn’t show up. The tax office has records of what MH’s have sold for? I haven’t read any other posts that said that. They all said you have to ask park managers and movers and just try to get a feel for price on your own. Thanks for the tip. I’ll call them tomorrow.
Best regards,