Some investors avoid investing in mobile homes in Over-55 mobile home parks because it limits who your buyers can be. But, there is an opportunity in Over-55 parks which is not available in other parks. Usually when I buy a mobile home way below market in an Over-55 mobile home park, I am able to sell the mobile home to a CASH buyer. I can usually buy for $5,000 or less then sell a few days later for $10,000 or $15,000. The park manager at Over-55 parks will usually supply you with information about who needs to sell and move fast.
Cash buyers always want to negotiate. Use this technique below, designed by the Legendary Lonnie Scruggs, to get the price you want. Note that this technique works for single family house sales, rentals as well as mobile homes.
Here’s a little selling technique that I’ve found to be very effective. I’ve written about this in my books, but it doesn’t hurt to refresh your memory.
After screening numerous calls from my ads and signs, I “pre-qualified” three couples and scheduled appointments to show the home. But before I would agree to meet them for a showing, I required all of them to go through the park, check out the home and see if they liked what they saw. When they called back wanting to make an appointment to see it, I told all of them that I would probably be able to show the home Saturday afternoon, but wasn’t sure. But I would call them Saturday AM to firm up a time.
Saturday AM, I called and scheduled appointments for all of them to see the home that afternoon. The first appointment was at 2PM, with the best of the three. The next at 2:15PM, and the other couple at 2:30PM. The reason for the alternate times was because I wanted to be talking with the best of the three, before anyone else showed up.
The first couple, who had already said they could pay cash, showed up right on time. They liked the home, and started negotiating. They wanted to know if I could sell for less since they would be paying all cash. They also wanted to know if I could give them a break on the lot rent if they paid a full year in advance. It didn’t work, but I had to admire the fact that they at least tried to negotiate a better deal.
But they didn’t know they would soon have competition.
About that time, in walks the next couple, and you could actually see and feel the change in the attitude of the first couple. It was amusing to see the look on their faces, and watch how they kept eyeing this couple. The second couple checked out the home several times, and kept waiting for me to finish with the first couple. Then, in walks the third couple. This couple did a quick walk-through, asked a few questions and left.
Seeing how motivated and serious the second couple was, the first couple never again mentioned reducing price or lot rent. No more negotiating. They signed a contract for full price on both the home and lot. (Isn’t competition great?) Then I let the first couple hear me tell the second couple that I would call them in case anything should happen, or if this contract fell through. (This was Saturday, so it would actually be Monday before they could have the cash (cashiers check) for the home and lot rent. But they now knew if they didn’t show up with the money, I had another buyer waiting. But they did have all the funds Monday, signed all the docs and it was a done deal.
As you can see, this technique accomplishes two things. First, if you require all potential buyers to check out the park and home, and then call you back for an appointment, you have a more serious buyer. This will greatly minimize no-shows. I hardly ever show a home unless the potential buyer has already seen the home and park. But even before you do that, you should pre-qualify your buyers to see if they have the necessary funds and qualifications to buy the home. Otherwise, you will waste a lot of time showing homes to people that are not able to buy, or not able to qualify for the lot.
Second, by having other potential buyers show up at the same time, you generate a feeling of competition between buyers. When one person sees someone else wanting the same thing they want, and there’s only one available, they want it even more. So in many cases, like this one, you eliminate the negotiation process and get full price/terms.