All Forum Posts by: Joey English

 We never did. But if you want to jump on a call, I'm more than glad to show you what's been working for us.  

 Hey man, sorry I don't get on here very much. It would take a long time to type out the answer to the question. Instead, how about we jump on a zoom call this week and I'll show you real deals, real numbers and the returns on it. 

@Steven Foster Wilson, I started out buying them in parks and doing a strategy called a Lonnie Deal. That is where you buy them for cash, do no fix up and then sell them with owner financing. It is a great strategy where you recover your initial investment in the first year in most cases. And the cashflow amazingly there after. But the notes on a Lonnie Deal are fairly short, between 3.5-6 years in most cases. Which means once they pay off, that cashflow is gone. So I elected to replace my Lonnie Deals with landhome deals now. I owner finance some of them and I rent some of them... and the my double wide's rent for just as much as my site build homes, but with a third of the entry cost. Anyway, both in parks and on land are great strategies. And you should use which ever one, or both, that best fits you and your investment needs.

@Mackenzie Craik, I need to ask you a few questions before I can answer you fully so it may be easier to just talk verse trying to type it out. Give me a call.

Yes sir. Without a doubt. Your entry price may be different that what I am used to here in Georgia, but your sales price and monthly payment will reflect that difference as well. Either way, dollar for dollar, mobile homes are the best investment in real estate today.

@Omar Fattahi, I would check out cashflowdepot.com. They have a membership of less $300 for lifetime access to tons of recorded seminars and books... and Lonnie's Deals On Wheels is part of the program. See the link below. Hope that helps. 

https://www.cashflowdepot.com/?s=deals+on+wheels

@Kim Surrency, it is the 10bii financial calculator app by inaday development. It is one of the few apps I actually pay for. It  cost $5, but it is well worth it. 

This has been the year of the septic system. So far we’ve put in three sets of field lines and had to learn what not to do on a lower pressure drip system. (After owning one for four years, we learned they have a filter that was supposed to be cleaned every six months. Not doing so overpressurized the low pressure system and literally blew holes in the yard. Yay!)

All of our septic system situations started the same way. We got calls saying there was doody in places there shouldn’t be doody. Thankfully, most of it was out in the yard. However, one of the systems found a way to relieve itself under the house. Yuck!

Ashley and I were trying to figure what was going on since there were very few similarities in the properties.

After talking with our septic man Eddie Hilley, we determined that style and age of the house had little to do with the problem. Well – age does play a small factor. Once upon a time field lines were made of corrugated pipe in gravel pits. And as anyone who’s ever buried a drain line for their gutters knows, eventually that black pipe will cave in on itself and clog up.

The industry remedied this problem with a new design called an infiltrator system. Instead of the corrugated pipe, this system used a semicircular chamber that’s 12 inches tall at the center and three feet wide. This makes for an underground cave, if you will, that allows the sewer water to seep back into your yard.

The systems we replaced all had this design – which has a flaw.

The concavity of the infiltrator will eventually flatten out under the weight of the earth. The ones on our properties went from 12 to only six inches in height, thus overwhelming the septic lines.

Theses houses had sat vacant for a few years before we bought them. Since nothing was going down the drain, all the water in the field lines had gone away.

When we buy, we have the septic tank checked out, but there’s no real way to test the field lines. So be aware that if you buy a house that has been vacant for a while, this problem won’t rear its head for a year or more after you get a family in the house using the system to its full capacity.

Therefore, when you buy a house that’s been vacant, plan for extra expenses during the first two years as far as the septic system goes.

Hey that reminds me of a joke:

A congressman was seated next to an attractive young Southern lady on an airplane when he turns to her and says, “Do you want to talk? Flights go quicker if you strike up a conversation with your fellow passenger.”

The woman turns from her book and replies to the total stranger, “What would you want to talk about?”

“Oh, I don’t know,” the congressman says. “How about global warming, universal health care, or stimulus packages?”

He smiled smugly.

“OK,” she says. “Those could be interesting topics but let me ask you a question first. A horse, a cow, and a deer all eat the same stuff – grass. Yet a deer excretes little pellets, while a cow turns out a flat patty, but a horse produces clumps. Why do you suppose that is?”

The legislator, visibly surprised by the Southerner’s response, thinks about it and says, “Hmmm, I have no idea.”

With a country drawl, she replies, “Bless your heart. Do you really feel qualified to discuss global warming, universal health care, or the economy, when it’s obvious you don’t know crap?”

I’m still not sure why those animals excrete differently, but after dealing with these septic systems, I feel I know my crap a little better. Hehe.

Ashley and I took the long way home over Dug Gap Mountain to Villanow and then home through Sugar Valley after a recent date night in Dalton. This route is very familiar to us since Ashley grew up in Villanow and that’s where we started our life together. Since the kids were with Memaw and Poppy, we really got to savor our trip down memory lane.

Ashley and I not only started our married life there, it’s also where we started our real estate life. Our ride home was filled with stories and smiles as we passed houses that we’d either been inside of or knew about but because of inexperience couldn’t turn into deals. We passed others we’d made deals on; those were the really fun ones. We got to see how much the houses had changed but we marveled at how much they’d stayed the same.

As we drove, we talked about how different deals came to be and what we had learned from them. One in particular, a house on Tom White Road, stood out; it brought to mind a question I’d been asked the day before – “As a new investor, how did you find deals and what is the best way today?”

The deal on Tom White provides a comprehensive answer.

The Tom White property was a vacant house that I’d passed everyday for almost two years. Every time I’d think, “I need to find out who owns that house and see if I could make a deal with them.” The problem was I had no idea how.

One day I resolved to go to the courthouse and see if I could track the owners down. The problem with that was I’d never been to a courthouse and had no idea what to do, where to go or who to talk to once I got there.

I felt quite timid walking into the courthouse – it was fear of the unknown coupled with a fear of setting off the metal detector. I made it inside safely and found my way to the clerk of court’s office. The little lady behind the desk sensed I had no idea what I was doing and graciously helped me look up the property card and deed. I thanked her profusely and triumphantly left with the owner’s name and a copy of the deed.

At home, I used the white pages to look the owners up. No one in Walker County matched, but I did find someone with the same name in Ringgold. I got the address and drove to the property.

As I pulled up to the house, my heart was pumping.

“What if they aren’t home?” I thought. “What if they are?”

I was so scared, but I marched up to the door and knocked before my resolve gave out.

Thankfully, no one answered, but I’d come too far to give up at that point. So I put a letter in the door explaining why I was there and asking if the resident would have the Tom White property owners call me.

A week later someone did, and we were able to structure a deal. Later, we sold that house with owner financing and it’s still paying us today.

I asked Ashley what she thought made the difference for us in the beginning. She replied, “It has to do with fear. Some people have a fear of failure. But we had a fear of not succeeding, which empowered us. The fear of failure, however, would’ve crippled us.”

Just like everybody, we were afraid to door knock. But our fear of not succeeding propelled us to overcome that. Knocking on that door led us to talking with the owners and buying the house. And that will always be the best way to find deals.

Ashley and I recently came across a listing with “possible short sale” in the title. If you don’t know, a short sale occurs when a bank agrees to accept less than what the borrower owes on their mortgage when the property sells. This listing was intriguing to us since we haven’t seen any short sales advertised in a long time.

Personally, I think short sales have almost gone the way of the dodo. My reasoning: we saw short sales being used after property values had plummeted. So from 2008-2014, properties mortgaged prior to these dates were upside down in their loan to value ratio. During this time, mortgage default rates reached an all time high. The banks, then, had two options: foreclose and be left with a house to manage (which would cost an unknown amount of time and money) or, sell it for a loss and recoup some of their principle on the bad loan which they could put back to work in a good loan. Banks liked the latter idea better and short sales became an everyday occurrence.

The properties we’re seeing foreclosed on today often have loans issued between 2009 and 2015 when houses were close to bottom dollar. Since house values have increased so much in the past three years, banks are getting more by foreclosing these loans and then selling the houses quickly on the open market.

In other words, short sales aren’t happening.

So when we saw the listing said “possible short sale,” we knew that wasn’t ultimately going to be an option and that we’d need another strategy. When we saw the house had a 2012 loan on it, buying the house subject to its existing mortgage became our main strategy. That’s when we buy a house but leave the seller’s mortgage in place after the sale.

Our plan was to flip this house. For a subject-to deal, that meant we planned to keep the house short term, making payments on the seller’s mortgage on their behalf, until we resold it and paid off their loan.

Instead of keeping this subject-to as a rental, we chose to flip it because it had 2012 mortgage. This meant two things: 1. The seller’s mortgage had a low interest rate, and 2. The mortgage balance would be well below current resale value – $50k to be exact. With a $30k rehab, that would leave us a $20k profit. That sounds like a great deal, right?

It gets better; buying this house subject-to also made it a safer deal for us.

The purchase price was $75k, but at the closing table, since we left the seller mortgage in place, we only had pay the agreed-upon closing costs out of pocket instead of a total of $75,000 cash. The less you have out of pocket, the safer a deal is.

Not only did leaving the seller’s mortgage in place make this deal safer, but it was also cheaper. That’s because we got to use the low interest rate already in place on the existing mortgage instead of the rates we see on our investor loans.

Now I’ve talked at length about the advantages to us on this deal, but what about benefits for the sellers?

It helped them in three main ways. 1. We stopped the foreclosure and saved their credit. Because of this deal structure, they won’t even have a short sale hurting their credit score. 2. We gave them some time to move. 3. They got finality in a situation that was emotionally charged and very bleak. I have to tell you, the feeling we get when we see the emotional burden of a housing situation like this lifted off the seller is indescribably good.

So, is a subject-to deal better than a short sale? These people and their agent thought so. What about you?