Well folks, another year of your life is history and you
Lonnie,
Thank you for the inspiration! I am already working on my goals for 2007!
Everybody is so excited to meet you on the West Coast at Mobile Home Millions 5. Many of the people have heard of the infamous “Lonnie Deal” and read you books but have never met you in person!
I look forward to seeing you again in March!
Corey
Just got some distressing news from my accountant. This is end of quarter and fiscal end of year so the numbers are in for the entire year. My take home pay on retail lot will be 71K. Not a bad year but well down from 4.5 times that last year 2005.
We are squeezed between several factors. the costs of “puff” clean repos prohibit us buying all clean, newer repos. We are forced to buy older, slightly damaged homes for less money. Rehab costs have skyrocketed,so margins are squeezed on that end as well. A roll of “cheater” carpet pad has gone from 33 per roll to 70 in one year. Carpet up 38%, drywall up 30%, and on and on.
Repo sales have to be less than 60% of new or there is no impetus for our customers to buy used homes. New homes come with 5 year warranties, and they can pick their colors. Our market is changing. We lose sales every day from lack of affordable insurance, financing, and 10-20K Impact Fees in most counties in Florida.
We make our very best money on 1985-1989 doubles in fair shape…a couple grand for home, same for breakdown and reset on our lot,and the same again on paint,capet,vinyl. Sell for 19.9K delivered and gross 8-10 on home. On a recent deal we bought a 1998 Fleetwood 28X56 3/2 14K. 2K to bring onto lot, 2k carpet, tile, and sold for 28K (3K to deliver and reset included) for a 7K gross profit. As you so well know the yield on this second deal is much less even though the dollars of gross profit are close.
This squeeze has made us rethink our business model. we are trying to pass on all newer home in 2007 and concentrate on these older homes. Will this help our bottom line? We are not sure, if it doesn’t we will go to another plan. In this biz, being tenacious is a must. There will be a way to become extremely profitable again…the thing that sets us mobile people apart from other investment groups is our singleminded drive to do deals that bring us in some cash.
Rather than becoming paralyzed with fear, we are excited about our new plan. Mybusiness partner and I have Note Income(thank you Lonnie) and Rental Income(thank you Tony and Scott) with NO debt to weather this blip…we both think this is the time to BUY distressed properties(and they are way up in our area). MHP’s are coming way down here also!!!
Regards,
Greg
Hey Greg,
I to am rethinking my business plan for 07, these older homes as you say mid 80’s and even some 70’s models has always been my money machines, around here anyway !! I just moved about 15 more into my Park , that pretty much filled it up, so once I get them all completly set , and filled again , well be set pretty good in the Park, ready to move on to some other things,
Had wanted to do some L/H Deals but the financing for these is not here,hasnt been for awhile, espicially when you start talking about older homes.
Will you be able to get financing for your tennant / buyer , for homes in the 80’s model range? I know the market there is totally different than here, just wondering!!
Want to thank you for all the hard work in putting together MOM , and were looking forward to coming down and soaking up some of the (knowlidge,need spell check here, lol)(smarts) that you bring together at these meets.
see you soon ,
Ricky
either thru LOC’s or savings, or cash outs up north or south with a pocket full of cash. We can finance homes to 1976 if there is sufficient equity in the land.
Can’t wait to see y’all in Jan!!
Greg