Lonnie deals in the Bay Area

[Jason Kosowan]

Has anyone tried to do a Lonnie in the Bay Area? It seems that the for-sale MH listings here are a lot more than some of the prices that others are quoting. (e.g. rather than a few thousand for a cash-deal, I've been finding MH listings that start at around 10k)

I have not done a Lonnie yet and am willing to try, but this seems like the numbers are really skewed on what should be a "smaller" deal.

Example: even for a small owner-financed 2-year $15k loan and 10% interest, the monthly payments would be over $600 / month. My impression is that this is supposed to be an affordable choice for lower-income people, but these numbers don't bear it out.

What do you think?

[Aaron Mazzrillo]

Why would you do a 2 year loan? I have done a bunch of Lonnie deals in the past and I never sold anyone on a high payment over 2 years. Most of the time, the loans were 60 months. However, the down payment was enough to get me almost 100% out of the deal. You have to structure the payments so they are affordable or it doesn't work.

Also, you should definitely check the the management before doing deals in a park. They can make life very miserable for you. Just because you find a well qualified buyer, you still have to get park approval and that can be quite an obstacle.