I never met my best mentors.
They’re authors who actually achieved the things they wrote about.
One of these mentors coached me to financial freedom.
Lonnie Scruggs wrote “Deals on Wheels” & “Making Money With Mobile Homes.” He became wealthy by providing affordable housing.
Lonnie discovered a lucrative niche. He realized many people could never save the money required to buy a house.
So he’d buy used trailer houses (mobile homes) & resell them, carrying the financing himself.
Lonnie wrote so many of these deals that his mailman rarely passed without delivering a check.
The customers in this market asked two questions: “How much down?” & “How much a month?”
Lonnie’s typical trailer cost him $3,000. He’d resell the trailer as-is for $7,000 to $9,000 on payments at 10% interest. His down payments were flexible, typically $500 to $1,000. He’d adjust the monthly payment amount to match the needs of the buyer. He did this by adjusting the length of the loan. Most loans were two to four years in length. Most payments were $250 to $350 per month.
Lonnie didn't own the trailer parks, just the trailers. He got his buyers approved to live in the parks by the park owners.
By selling the trailers on payments, Lonnie had no repairs. No management of tenants. His biggest problem was the occasional non-payer who almost always just gave the trailer back in exchange for release from the debt & contract. Lonnie then resold it to someone else, starting the payment chain all over again.
Sell 10 or 20 trailers like this & you can replace your job income.
Or like me, buy an entire park.
Lonnie shared how his daughter bought a park (page 125, “You Snooze You Lose”) in “Making Money With Mobile Homes.” I read that story 100 times & copied his daughter’s actions.
It resulted in us buying a 32-unit park for just $1,000 down. By closing on the 5th, the seller had to turn over 25 days of rent. So at closing, we walked away with $6,000 cash. The sellers actually PAID us to take the park.
Since we had no money in the deal, our returns on investment were “infinite” for 17 years. Then we sold that park for 1,600 times our down payment.
Our best individual trailer purchase cost $1,500. We rented it out for $475 a month for ten years, then sold it for $5,000 on payments, collected trailer payments for three years & lot rent for 7 years until we sold the park. I’m not sure how to calculate that return but as Lonnie would say, it was “good enough.”
Even with landlords making good profits, used trailer homes often cost far less than cars. Lot rent is typically cheaper than the property taxes charged on traditional homes. So used trailers are a win for everyone involved.
I never met Lonnie but I did get to thank him for super-charging our lives. He appreciated my letter with a gracious response.
Lonnie has passed. But his systems & advice keep providing financial freedom to normal people.
This isn’t for everyone.
But it sure worked for us.
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