By Mike Johnson
The best investment I ever made was precious metals.
Not gold and silver but 14 X 70 ingots of aluminum.
I learned much of the concepts from Lonnie Scruggs. His “Lonnie Deals” are legendary in the mobile home industry.
This is where you buy a used mobile home that is already set up in a park. Lonnie’s typical deal was to buy it for $3,000 and sell it as-is on payments for $7,000 to $9,000 at 10% interest.
He’d get the highest down payment possible and adjust the length of the loan balance to accommodate the affordability needs of the buyer. Typically, this was about $300 a month for 24-36 months. The buyer then paid lot rent to the park owner and a trailer payment to Lonnie. The buyer was now responsible for any repairs. Lonnie’s job was done. If the buyer made his payments, he’d have a paid off house within two or three years. If not, Lonnie got the house back and would just resell it, starting the payment sequence all over.
Buy 10 or 20 trailers like this and you can replace your job income.
Lonnie wrote so many of these deals that his goal was to never let the mailman pass his house without delivering a check.
Today, the numbers may be higher but are still workable for you and your buyers. It’s amazing that people can buy homes that are cheaper than cars. If people balk at paying lot rent, remind them that stick-built homes pay it too – it’s just called “property taxes.”
The reasons people sell at a discount never end – sickness, death, divorce, transfers, inheritance, upgrading to a bigger home.
These deals let you get into the rental industry with very little money and then build up over time.
Or, like me, you might just make a bigger leap and buy an entire park. There are ways to do this with little down payment too. Once you own a park, you get lot rent PLUS you are best positioned to get the best discounted used home deals first.
If you're looking for more control over your income and your time, I highly recommend the mobile home industry.
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Income Property Saves Decades
Mike's Million Dollar Letter
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