Over 100% Yield On My First Mobile Home Deal
I have been reading everything posted on this site for several months. Last month my wife became upset because I was not doing anything with all the information that I was getting off the site. She said she wanted to have another child! I said not until we do our first deal. So she went out in her zeal and tried to find us a deal. We almost bought a mail store, but I figured that we wouldn’t have time for our real estate business.
So finally I ordered Lonnie’s Home Study Course, Deals On Wheels. After two weeks of review we ran our 60 dollar add: “Get Cash Now! I buy used mobile homes at fair prices.”
Then the phone range. We talked to unmotivated sellers and just didn’t like what we saw. Then I told my wife, “we don’t want to go to see anyone who is not motivated!” The phone rang again. This time the seller was motivated. Here is what he wanted.
1985 3 bed 2 bath with new floors, new carpet, new linoleum, new refrigerator, new stove, and in overall good condition for $7,800 but would take $7,000. When we got there, we went inside and it looked just like he described it. I asked him how much he would take if we paid cash in three days. He said he would take $6,000. So I told him that, before we saw the place, I figured it would be in bad shape, so I figured I would pay a max of $4,200. Since it’s not in bad shape let’s meet half way at $5,200. He said he’d think about it.
On the way home, my wife and I are talking and I say maybe we should have paid the $6,000. Then I remember that God has not given me the spirit of fear but of courage and a sound mind. So I say to my wife, “It’s all good!” Then I asked my wife call the tax office and check and see if he has paid his taxes.
The next day she calls me and says the taxes have not been paid and they total $230. So I say well we can pay them but when I get home I’ll call the seller and tell him about the taxes and ask what he wants to do about it. When I get home I call him and tell him, “Today I was doing some background paperwork and I discovered that the taxes have not been paid on the home and they total $230. What do you want to do about them?” Then I shut up.
Blam! He hits me with “I can’t believe you buy mobile homes and you don’t know that they can’t tax me on personal property and I know my rights” and on and on and on with more of this “according to the constitution I am a sovereign citizen and can’t be taxed on personal property.” I just say I don’t know anything about all of that but it is very interesting. Why don’t you call the tax office and get this whole thing squared away.
So I go to the bank and get my $$$$$ and the next day he calls my wife and gives her the bit about the taxes being illegal and the Texas republic and the Waco cult and so on and so on. She simply says why don’t you call the tax office and get this whole thing squared away. So he tries to ask for me. She simply says I am not available why don’t you call the tax office and get this whole thing squared away.
Later that day he calls back and says, “well I didn’t have the time to fight this so I just paid the taxes.” We purchased that mobile home later that day for $5,300.
When I went to talk to the owner of the mobile home park (a mobile home dealer) I told him that I just purchased it to sell it again.
Blam! He hits me with, “Oh you want to muscle in on my business!” So here I am trying to explain and double talk and sell him, then his man laughs out loud and says that he just kidding. So he says, “Lets see how much of an entrepreneur you really are.” He asks, “How much did you pay for that house?” I tell him $5,300. He says I’ll give you $500 more right now. I look him straight in the eye and give him a resounding NO SIR! He turns away and says, “just pay the lot rent ($168) and never mind the deposit. But have your customer come in so that I can qualify him for the lot.”
In the car, I tell my wife what happened and then tell her qualify them for the lot. From there we ran this ad in the daily paper for $25 saying: “Owner financed 3 bed 2 bath, new stove, new carpet, great shape, $1,500 down.” Then the phone rang. It took us 12 days (my wife says 9 days), but it felt like 2 years to sell this house. We sold it to a couple who has medical bills on their credit, lives off the wife’s $1,000 a month income and SSI for the husband’s eye problems. They came and looked at the house, filled out our application, and said if it would help they could put down $2,000! I said, “well the payments would be $321 (15.16%) for 48 months if you put down $2,000. My wife called and verified her employment and they said they had the $2,000, I said APPROVED!!!
Here’s what the deal looked like:
$321/mo for 48 months
My yield on this deal is over 100%….Or, as Lonnie Scruggs puts it, GOOD ENOUGH!