Before I pursue my first deal


#1

Below is an action list I’ve come up with. Any additions or comments are appreciated :slight_smile:

  1. Get a proper business license for dealing in manufactured housing

  2. Get a sales tax permit and a use tax permit (anyone know what a use tax permit is?)

  3. Open a business checking account

  4. Find a park to do business in*

  5. Research your market (i.e. how much your type of homes sell for)

  6. Should I get some type of bookkeeping software???

*I heard on a teleseminar (I believe of Lonnie Scruggs) that all you need is one good park to do business in. Things to look for - safety, your size homes, cooperative management.

Also, some questions about taxes:

How do taxes work for your first year of business? If I do a deal in April 2009 (2nd quarter), do I owe taxes on July 15, 2009, or do I wait until 2010 to pay?

Also, if I buy a home for 2000, sell it for 4000, and finance it with 400 down, do I owe income tax on 2000 dollars profit before I even realize it (i.e. collect it)?

Also, if someone buys a home for 4000, but only puts 400 down, how does sales tax work?

Thanks


#2

I think you should simplify your list. Go look at homes for sale and find a park to do business in before any of those other things. Before you waste your time on setting up a business you need to find out if there’s business to be done!

Many of your other questions/issues are state-specific. The other ones can be answered by a good accountant. Doing a couple of deals as an individual rather than setting up a business is recommended by just about everyone who has done Lonnie Deals.

Talk to sellers, park managers and others in the MH business first. When you find your first deal you can begin to put the other pieces into place.

And if you don’t have the book Deals on Wheels by Lonnie Scruggs (and I suspect you don’t) get that, read it a couple of times, and don’t deviate from its recommendations. Everyone else can elaborate on it, but it’s the best step-by-step you’ll find.

Good luck!

Lin

ps I think this is a great time of year to buy and sell as a beginner! I bought my first deal (part of my New Year’s Resolution) on 1/10/02, did some fix-up and sold on 3/12/02 for a cash profit of $2700.