Mixed feelings


#1

So today I found a 92 14/72 2/2 SW Sterling mobile home for sale. The seller wanted 7K but I got her down to 5K. I think I could lonnie it for 10000 pretty easy. I’m starting to feel bad, as I indicated to her my wife and i were looking for a home, where i’m really looking for a lonnie deal. IT’s not a bad place, and we actually don’t have anywhere to live right now, so there is a slight possiblity we may live there, but only if I can’t sell it 1000 down 3 years at 12.75 interest that is.

so should I come clean with her before I buy it from her? She is an older lady that has kept the house perfect condition. My other thought is she is moving to the other side of the city, and not sure if she would ever know the difference.

Anyways any food for though here?


#2

Me personally I would tell her that I intend to resell the home for a profit but that you may live in it. When you tell her about selling it for a profit make sure you mention that you will be selling it on payments (and will be taking a risk of getting it back in worse condition).

I tell almost everyone I buy a home from that I am the last person they want to sell their home to. This really gets them interested in me. I then explain to them that as an investor I buy wholesale and sell at retail (often their asking price). I even offer to help them create a note if they sell it themselves if they want. The only thing I ask in return is that if they need to sell the note in the future that they give me the first shot at it (after all it is the note not the home that I want). NO ONE has taken me up on that offer and most often I buy the home from them within 30 to 60 days anyway without any bad feelings from them.

Again for my honesty is the best policy. At worse you lose a deal. At best you enhance your reputation for being an honest person who others will then be willing to deal with.

Good luck

Ruben D. Flores

816 918-9041


#3

Why don’t you just move in and in a month or two advertise the home for sale for 10-12k cash? It is not a bad thing to double your money. It may very well not sell at the cash price so after you have lived there for a while, thus fulfilling your promise to the lady you are buying from, do a Lonnie deal later. Or advertise it with a Lonnie deal for more than you think you can get and see what happens.

I would advise to not get locked in to one way of doing business. Since you need housing it seems it may be wise to just move in and fish for a cash buyer which should take longer than an owner finance. This way if you get an offer that is too good to turn down, don’t turn it down. The good profit will help take the pain out of having to move again.

Living in the home gives you the chance to wait for a sweeter deal than if you have it in inventory and need to move it to stop the cash out-flow.

Just a thought.


#4

so I’ll tell you my take on this. There will be dozens of other deals out there but you will never have another chance for complete honesty with this person. A man’s (or woman’s) word should be better than any contract ever written period.

I do ten (hundred) K deals with investors on this Board and I will always personally guarantee every deal every time. If they lose skin, I lose skin. If they lose everything, I lose everything. This seems fair to me. That is why I am soooooo careful who I borrow from or partner up with.

Ernest Tew took a lot of time out of his busy life to explain this to me in 2002. And he did HUGE deals.

Early on in this biz I decided if I had to lie to succeed here, I would leave the business. The folks that seem to succeed here are the ones that are honest on every deal every time. You are more likely to partner or get hard money here on your word or deeds than a credit score. Honest people like to deal with honest people. Friday a nice lady asked me how much I paid for a s/w I was selling for 8K. I told her 5K. She said that’s a lot of profit for little work… I asked her if she wanted to quit her job with company car and medical benefits and help me show these un airconditioned, dirty homes and we would split my portion of profit. She stroked a check for 8K and shut up.

If it sounds like I’m judging you I’m not. We all struggle with this and each has a different approach. Mine works for me Reuben nailed it i his post worst case scenario you lose 1 deal…you would have probably got the deal no matter what you said. A way I avoid these questions is to say I’m not sure how I will handle this transaction, I like to keep my options or say “who knows?”

It is a very good sign you asked these questions on an open forum,

Greg


#5

Greg,

Agreed. My opinion is that since he had stated intention to live there he could follow through and still get the deal since he seemed to want both the deal and his clear conscience. Needing a home is a big factor also.

One of the factors here is the investors need to recognize that he has value in the deal and is not trying to take advantage. I agree fully with what you said about the lady who questioned your effort put into the deal you mentioned. This lady has probably never asked the manager of her local grocery store to explain why is he so bold as to ask for a higher mark up than you did on the house it took so much effort to land to resell.

As investor we need to have a good understanding of the value we bring to the deal. We add value with the good terms we offer upon sale. The market value of anything is exactly what it says, the “market value”. How much can this item bring in an “arms length transaction” (not between friends or family, just one stranger negotiating with another stranger).

If somebody has a home on the market for $10k for 4 months and has had no action, it can be assumed the market value is less than $10k. If you come along and offer $4k and they take it. The market value is arguably $4k. The $10k figure was imaginary and the $4k was real enough to close the deal.

The investor is not stealing the $6k profit as they would probably have no better luck getting $10k in cash than the first person. If they held it long enough they might. Or maybe they could add value by improvements. But holding or improving the home is adding value in itself.

It really is easier to just answer people’s questions honestly. You bring value by being there to purchase when they need to sell of sell when they need to buy. You are taking your chances in an open market just like the rest of humanity does when they haggle over a luxury car in Paris or a goat’s head in the Sudan. There is nothing to hide or feel guilty about and no need to misrepresent your intentions.

Value in real estate and in mobiles can be figured in price and/or terms. When you ad terms and help someone get a home they couldn’t otherwise get into, you are adding value.

I Know folks who are great mechanics and know what they are looking at when they see it. They have spent much time learing the trade and when they see an old corvette, they know how much time, money and effort it will take to fix and re-sell.

When I see the same car I can picture it cherried out in my mind but I know if I put it in my yard it is going to stay there for a long time in the same shape it is in now. They add the value with knolwedge, skill, labor and hard earned money wisely invested. If I need a car I go to them. If they need a house, they come to me. I don’t question them on their value as people and/or demean them for having skills I didn’t take the time to develop.

I am with Greg on the open honesty issue. I also would ad that we are of value as investors big or small. The market determines the value and it is a truly level playing field where we can all choose to obtain the right knowledge to do well in the world. It is just hard for us sometimes when we have gotten our money in little paychecks to see ourselves as deserving to get it in bigger chunks.

My last payday for a flip of a doublewide was $13.5k. If I got to do once a month (and Iam trying to work up to that) I would be a very happy dude. Deal is that home was my only successful one so far this year and I have spent lots of that money on looking for the next one. I added the value by buying right from a motivated seller and selling to someone who got financing on the home so obviously she could prove the value to somebody else (a private lender). I bought for market value and sold for market value and kept the $13k difference. Cool!


#6

You’ve made a great point! No need to be apologetic about the value we investors provide. It’s hard when you’re first starting out, but later on it’s obvious!

I am doing my first sw l/h flip in July. I have always kept my properties until now. I bought for $31,500 in April, installed a renter at $500/mo, and now am selling for $44,000. Good deal for me, good deal for my buyer. No apologies here!

Lin


#7

Bob and very true. The added value we bring to a deal is what allows us to ask for a check looking the customer in the eye.

I thought about your words today and I realized I do some of these actions also. I went to Lowes and bought a dishwasher and garbage disposal and forked over $550 without a thought.

Driving home saw a Yard Sale and picked up a lawn mower for tenant use for 31 …they were asking 50. I pay rich, powerful Lowes full price and haggle for 15 minites to beat down some down on their luck folks out of 19 bucks they probably needed.

Human Nature…

Are you coming to MOM in November??

Greg


#8

Thanks. I find that the first thing we need to do when we try to step into something new, and hopefully better, is to see ourselves as belonging in the new role. Our self perceptions really hurt us at times.

If we are used to making $10 an hour and have built our own vision of ourselves around that type of income we can have a hard time seeing that we can actually bring more value to a deal than our old $10 an hour mentality is comfortable with.

Next time you are at Lowe’s buying something pricey try looking around for the manager and pitch him on a discount. My wife and I call it “the guy with the magic pen”. Don’t mean to be sexist, so far it has only been guys we have dealt with.

What started it was one day we found a dishwasher in the blow-out aisle that had no price on it. One of the guys in the appliance dept. told us he could discount so much and it didn’t seem like enough of a discount so we kept looking. We asked around until we found the floor manager who had the authority to set a price.

We ended up buying a $350 dishwasher for $75. It said on the attached paperwork that it was missing the kick-plate under the front door so we figured we would order one or build something that didn’t look too funky. We checked with the factory and found the part was going to be like $75 with shipping. I installed the dishwasher and when I opened it up to screw in the top screws I found the kick-plate inside. Very cool.

We got in the habit of asking around for the floor manager if we have a big purchase or anything in the blow-out areas. It has always been worth our time to ask for them at the front info desk. They seem to enjoy having the chance to use their authority, and their magic pen, and we certainly like the savings.

I don’t know what MOM is. I assume it might be meeting of the minds or something and not a meeting at somebody’s mom’s house. I am very new to this mobile home game, at least the organized part of it. I may come if I can learn more about it.


#9

event started by me and Ernest Tew about 5 years ago. Mobile home folks meet and discuss ways to increase our volume of deals and enhance profits.

I’ve organised a few of these (ok I have put a few of 'em on LOL) and I reallyenjoy 'em. had over 100 folks in Jan.

I have posted details and anyone on this board is welcome to call me for additional info

Greg

352.216.2020


#10

Greg, you need to go shopping @ Lowe’s w/me. You CAN bargain there. Remind me in Asheville next month to tell you the story of the Great Fireplace Round-Up of 2007. Ellen was the winner.

Sometimes the deals are good even w/out bargaining. I got 20% off a fridge & stove there yesterday. I got the 4th of July 10% off special, but by bringing my DGD, who is a military dependent, I got another 10% off. The military discount alone save me $133. I’ve already submitted the rebate form for the delivery charge, so I’ll get that back, too. Lo & behold, went to the post office today & got a 10% coupon for my next visit. Learned this week that if I set up a commercial account, deliveries w/only be $20 instead of $61. Since it costs me $18 in gas to make a run to Lowe’s in the truck, the reduction in delivery is going to save me gas because I can drive my car, which gets better mileage, instead of the truck.

Tye (born to shop)


#11

Well the update to my story (og post) The old lady couldn’t find an affordable apartment to live in like she thought she could, and she offered to buy me out of the contract. She was way too nice so I just accepted the deposit refund and we voided the contract.


#12

JB,

That little bit of compassion will come back to you mutiplied somewhere down the road. I sold a home earlier this year to a single mom with a couple of kids. She mentioned my name at her kids school and the principle of the school had heard of me. He gave me rave reviews mentioning how much I help people and how fair I was. This felt great so I asked who this person was. My buyer told me who he was and I do not know him. He and I never met but he heard about me from someone in a park where I only did one deal. During my time in that park I must have done something right to get this kind of glowing recommendation from someone I had never met. I have learned over the years how acts of kindness and always treating others fairly has and will continue to make my life fuller and richer. Your example of kindness will do the same for you I am sure.

Ruben D. Flores


#13

I always look for win/win scenarios. Ernest Tew was HUGE on this. There are plenty of deals where EVERYONE can make a buck or come out smilin’. Who needs a deal where one party takes a beating?

1/2 of our business is repeat business…start beating folks up, and the word gets around; we are actually a small community.

Greg