short sale of mobile home
had a motivated seller respond to an ad but she has a mobile home? can i short sale her loan? she owes 24K but home is worth around 21K. anything different when dealing with mobile homes? don't mobile homes depreciate like cars as opposed to appreciate like homes? doesnt this always mean the the mobile home owner is often upside-down, even more so than the homeowner? thanks for your help.
Now you are speaking my language!
Maybe Mark B will come peek in here
It's time to throw that nada book out the window!
What was the orginal price of the home?
Let me add this: The reason I asked what was the orginal price is because this has to be a double wide and doubles can be priced as high as 50,000. The person might owe 24K but that doesn't mean that was the original price.[ Edited by Future-Multi-millionare on Date 04/04/2003 ]
she bought it in 1997 for 39K. it is 16x80. 3 br 2 ba plus utility room. she told me now worth 22K from blue book and she owes 24K. thanks for your help.
$39,000 orginal price
- 24,000 debt
15,000
Okay
LOL! As I was sitting her plotting. I was thinking how you go about attempting the short sale of regular
Houses and a lot of that stuff still applies. Remember the bank doesn’t want REOs. Mobile homes aren’t popular so they definitely don’t want to have 40K mobile as an REO because there is no way they’d get anything near 40K for the home. Although a person would have to be in arrearage or behind on your payments as you already know in order to short sale. In theory you could get the bank to discount the mortgage if the bank is following nada guidelines (they may work with you since mobiles are looked down upon). I was thinking you could offer 7K and work your way up to 15K and they may think that’s a deal. You would then advertise and offer owner financing (lets be conservative if you want) on the double wide for 30K which doubles your money (over a period of years.
Or as an investor the opportunity for me in this would be to buy the homeowner out for $24,000 and sell the home offering owner financing. Owner financing benefits people who can’t get conventional loans and benefits the investor because he can charge a higher price. By offering owner financing I could get 39K for the home. I wouldn’t get 39K upfront from the buyer it would span out a number a years in the form of monthly payments at a certain interest rate. Remember when people buy something they’re more concerned with monthly payments than total overall price.
The beauty of seller/slash owner financing is you can house people who can’t get loans from lenders. I was discussing this with a guy on the VRE train last night. If you have a couple and they’ve had the same job for upteen years and good rental references I’d have no problem putting them in 50K mobile home that I was seller financing. If they decide to leave good replace them and offer the new buyers the same terms and you make even more money.
I wish I had my financial calculator because I’d crunch some numbers with you.
Sample note: 5 years with monthly payments of $500.00 at 12.75 interest (is the standard rate) how much money would you make? Divide the profit by the amount of invest that will give you your yield on the initial investment
It seems like you are on the up and up Sewa. There is no competition with this stuff. You could have you whole area locked down!!
I tried to paint a picture but if you want the master piece do a search on Lonnie Scruggs at http://www.google.com He talks about single wides this stuff works for double wides
You could always shoot Mark B a message because he is actively buying and selling double wides
[ Edited by Future-Multi-millionare on Date 04/04/2003 ]
i'm sorry to be such a dolt, but what does LOL mean and what is "nada" besides nothing in spanish?
i also don't see how i would benefit to pay her 24K on this MH when the blue book says it is only worth 22K?
sorry to be so clueless.
i've read a lot of lonnie scruggs' articles on another website. am holding off on buying anymore courses until i actually get a payday!! (i've already purchased three!) anyway, really appreciate your valuable (and free!) advice.
Sewa You had so much short sale activity that I assummed you more were familar with this type of investing. Of course don't take my word for it. This is called creative investing. The blue book value will keep you broke.
You have to think outside of the box on this type of thing.
LOL Laughing out loud
Nada books are books that have prices on various things although I may be interchanging nada and blue book (sorry if that's the case)
The blue book isn't the bible and there is no law that says you must use prices in the blue book. Everything you've been taught about mobile home prices is false.
Most people that I know who have bought mobile homes didn't go out shopping with the blue book in hand. Most didn't even know what the bluebook was. The buyers were more concerned about will my credit go through and what are the monthly payments.
The home buyer might say why should I give you 40 when I could get a new one for 40. I'd say that may be the case but can you get a 40K loan (9 times out of 10 no because banks are barely lending on new homes lets not get into used) from the bank by such time because I have other serious buyers. That will either shut him up or get him down with the program!
Lonnie Scruggs made 23,000 off of a 2000 mobile home. He didn't do it using blue book value.
Every deal Lonnie made was a slap in the face of the bluebook!!!! I met a guy at my REI club meeting that had 12 single homes netting him a total of $2500 a month. He didn't buy a single one according to bluebook. THE BLUE BOOK IS JOKE!
[ Edited by Future-Multi-millionare on Date 04/04/2003 ]
I used to invest in mobile homes using the Lonnie Scruggs technique. I stopped a few years ago. It was too hard to sell the homes. The mobile home builders simply flooded the market a few years ago with homes that had subsidized payments for the first couple years. Buyers paid less per month for a new home than I could offer on a 15 year old home.
Bottom Line: Be careful with trailers. Know your market and only buy at incredibly low prices. Try NOT to buy in expensive parks -- people can get a real home for the same monthly payment as the trailer + park rent.
sewa,
Glad to meet you.
Mobile Homes are not rocket science, call the mobile home lender with permission from the owner.
Tell the lender you want to purchase the mobile for cash, ask what is the best price you can get the mobile for.
What ever price they give you, send them a cashiers check for half that amount, with the appropriate paper work saying if you cash the check, you send me the title and you own the mobile free and clear.
They may take the check and send you the title or they will call you back with an offer less than they told you they would take because they know you are a serious player.
NADA prints books on Mobiles, Automobiles, Classic Cars, etc, showing wholesale and retail values. You should always offer less than wholesale when making offers.
John $Cash$ Locke
John
In this case she could offer $10,500 and sell for $21,000. This mh is only 3 years old!! That's playing it safe but not how Lonnie got rich. Lonnie was taking 2000 single wides and selling for triple what he paid. If she didn't try to resell this for 30K she'd be doing herself an injustice!
I'll have to admit I was crazy for saying I'd give the homeowner the 24K I'd try to discount for lower but sake of example say I bought for 20K. A buyer comes to the park and notices that all the homes are running 35K-40K they apply for one and get denied. The same buyer sees my add in the paper that says I offer financing no banks I'm the only one offer seller financing no banks. He comes to me I check his credit if he works out he'll be living in the home (with the park managers approval of course). My goal would be the longterm monthly payments
[ Edited by Future-Multi-millionare on Date 04/04/2003 ][ Edited by Future-Multi-millionare on Date 04/04/2003 ]
Dave, John and Future,
thank you so much for taking time to respond to my questions. i really appreciate your taking the time to do this. i will give it a try with this short sale and see what i can get from the lender.
again, thank you so much for your help. it is really appreciated.
Sewa-
I'm going to assume a different approach and say that maybe you don't want to own this MH and that you simply want to create equity and wholesale it. If you are that unsure of the value, then try working backwards. I have no idea what a MH is worth in any area besides my own, which is So FL. Here it is difficult because lot rent is about $500 alone and everyone is afraid of being blown away in the next hurricane, so we don't usually pay more than $500 to $1000 when and if we do. But what I mean about working backwards is to find another investor who would buy the mobile home from you after the short sale. Ask a few interested investors (that you can trust) what they would be willing to pay you for the home. After you have that number, work from there. For Ex.: if I was willing to pay you $19K for it whenever you're able, then you know you have to pay LESS. So if the lender accepted $12, you can put the deal together. This way, you don't need any money and you don't have to own it. I'm not sure what your angle is, but everyone's advice is awesome, so good luck to you. Sharon[ Edited by SharonRestrepo on Date 04/05/2003 ]