Lonnie Scruggs: Making Money with Mobile Homes
Hey there. Welcome to my blog and to this article on Lonnie Scruggs, father of the mobile home real estate investment strategy called the “Lonnie Deal.”
When it came to doing deals on mobile homes, this guy knew what he was doing. He rocked his gig for a long time, and news of the 2013 Lonnie Scruggs death was a hit to the real estate investment community. Since he was an investor who made his mark and produced materials that are still in demand, I figured he was definitely worth a review.
But I’d like to talk about you for a sec.
Why are you here? I mean, really?
Tired of the treadmill, done with the daily grind, ready to roll away from your 9-to-5?
Maybe your sweat for the suit isn’t that bad, but you just want more . . . more independence, more flexibility, more financial freedom. You hear about guys and gals riding the real estate train to utopia, and you’re like, sign me up.
Am I right? Does real estate investment look like the ticket to the good life?
If so, I can relate. Or at least I could, a few years ago.
I got on the real estate investment train and rode it down Success Line. Collected houses and properties, made a bunch of cash, then lost it all when the economy crash hit me like a midnight express coming from the opposite direction. Bam. All of my cars blew off the tracks and I was sitting there looking at a locomotive graveyard.
While I sat my lonely ass on the rail, looking at the wreckage and wondering how the heck to get back on the line, it made me wonder what I needed to do to win in being an entrepreneur.
I found my answer. The biggest enemy I had lived between my ears. Now after jumping into an internet-based businesses I found something I love.
All this to say (and I promise, I’ll get to the Lonnie Scruggs review in a sec) that I’d recommend you work on becoming as self-aware as possible. At the end of the day, it doesn’t matter which direction you go. If you don’t get your mind right, you will find yourself in a losing game like I did.
You may find an opportunity that will give you what you came to this page for. Just check it out!
Lonnie Scruggs Background and Bio
Ok, now let’s get to the review on the guy that put mobile homes on the map when it came to real estate investment.
Scruggs served eleven years in the Navy but spent most of his life as a real estate investor. He owned, rented, managed, and maintained his own rental properties for 35 years, then began selling his properties and buying discounted notes and mortgages.
When good notes became hard to buy, he created his own notes and developed a system for buying, selling, and financing used mobile homes. This became known as the “Lonnie Deal.”
J Scott is a Maryland investor that posted an article about Lonnie Deals on his blog a few years ago. He described the Lonnie Deal as a form of real estate investing involving the purchase of mobile homes in a mobile home park. Investors carry out minor rehabs and then sell the home to the new occupant, financing the sale (meaning that the investor acts as the bank or lender and receives monthly payments from the buyer, usually over a period of five years or less).
Mobile home sellers who will finance the sale are generally in high demand because banks often won’t finance a mobile home purchase and many people who want to buy a mobile home don’t have great credit. A mobile home with a market value of $6,000 can be fairly easy to sell for $10,000 if it’s financed.
The Lonnie Deal
Scott describes the typical Lonnie Deal being a situation where an investor buys a mobile home for $1,000-$6,000, doing minor rehab and then re-selling for double the total cost with owner financing and interest rates of 10-13%.
A buyer who stops paying on the loan or moves out and skips town leaves the seller with all of the cash from the payments and the freedom to turn around and sell the mobile home to a new owner, again with financing. The idea is that as buyers default on their loans, the seller can keep re-selling the mobile home, over and over.
Since the publication of Scruggs’ materials, the enactment of the Dodd-Frank Rules and the 2014 Safe Act have impacted traditional Lonnie Deals in the realm of seller financing of mobile homes. An investor who follows Scruggs’ materials to the T will not be in compliance with the Dodd-Frank Rules. However, the 2014 Special Report is available at LonnieScruggs.net, and this contains information on changes to comply with the new legislation.
The Special Report covers permissible interest rates and permissible number of annual deals; when to use a mortgage broker; rules on buyer qualification and advertising; and consequences of violating the Dodd-Frank rules.
Lonnie Scruggs Mobile Home Investing Books and Courses
Lonnie Scruggs’s resources and products are available at his website, lonniescruggs.net and at CashFlowDepot.com.
The Ultimate Mobile Home Online Boot Camp is available for $199. The materials are taught by Lonnie Scruggs, Dyches Bottiford, Tony Colella, and Janet Dobson.
The content includes:
- How to make money fast starting from scratch
- The three top secret ways to find dirt cheap mobile homes and land
- Where you can get all the money you’ll ever need to buy mobile homes, parks, and land
- How to get park managers scrambling to work with you
- Due diligence techniques that ensure you have a buyer before you close
- How to find dirt cheap land deals and get the seller to finance the purchase
- How to bulletproof your contract
- How to find and evaluate parks before you buy
- Where to find seller-financed mobile home parks on the internet
Actual content is online access to 24 videos and 14 audio files, plus an e-book.
Lonnie Scruggs Deals on Wheels is available as a paperback for $34.95 or as an e-book for $12.97.
It includes a special report on new rules for selling mobile homes with seller financing for compliance with Dodd-Frank. It is intended for use as a supplement to Scruggs’ books.
The book covers the best kind of mobile homes to buy; eight ways to find low-priced mobile homes; how to negotiate an even lower purchase price; how to determine necessary repairs; how to make your phone ring off the hook with buyers; how to get started with $1500 or less; and dealing with park managers.
The book includes contracts and forms:
· Power of attorney
Lonnie Scruggs: Making Money with Mobile Homes is available as a paperback book for $34.95 or as an ebook for $12.97. This also includes the special report for doing deals in compliance with Dodd-Frank. The materials were updated in 2013.
The book is a follow-up to Deals on Wheels. It includes the same contracts and forms as in Deals on Wheels.
Lonnie Scruggs: Taking the Mystery Out of Money is available as a paperback for $34.95 or as an e-book for $9.97. It’s a 263-page book of case histories, examples, and moneymaking ideas to help the investor understand money and financing. The materials were updated in 2013.
Content includes:
· And more
A three-book special is available in paperback for $99 with free shipping or as a bundle of e-books for $29.97. The bundle contains all three of Lonnie Scruggs’ books.
The Lonnie Scruggs Deals on Wheels Home Study Course costs $399 with free shipping. It includes eight audio CDs with seven hours of material, a manual, figures, case histories, and a forms CD.
The e-book called Rules for Selling Mobile Homes so You Comply with Dodd Frank is available for $4.99.
Copyrights for the products are held by CREWorld Media LLC.
Lonnie Scruggs books are also available on Amazon.com.
There are a couple of videos on YouTube of Lonnie Scruggs. The Facebook link on his website goes to the page of Cash Flow Depot, a site of real estate investing ideas, tips, strategies, and products.
Many investors have found success by implementing the Lonnie Deal. Jackie Lange, a Dallas, Texas, investor, posted an article on CREOnine describing her experience. After reading Deals on Wheels, she was both able to avoid a bad purchase and make a profitable purchase. The latter resulted in a deal within 24 hours where she bought a mobile home in good condition for $2700 and sold it with seller financing the next day for $5,900 with $1,000 cash down payment.
Some Say Lonnie Deals Don’t Work
Some real estate investors say that Lonnie Deals don’t work. Dave Reynolds, purchaser and operator of over 50 mobile home parks across the United States (and author of Mobile Home Park Home Study Course) wrote an article called Why Lonnie Scruggs’ Mobile Home Park Deals Don’t Work for Me.
In a nutshell, Reynolds says that it usually costs a lot to rehab a mobile home and investors can very quickly sink too much into a junk mobile home to make it a decent investment. And then every time a tenant moves out, you have to rehab it again because typically the home is left in poor shape.
His wrap-up statement: “I can think of hundreds of ways to make more money than buying a used mobile home—including doing nothing at all.”
All right, guys, there you have it—the skinny on Lonnie Scruggs and mobile home real estate investing and the Lonnie Deal.
Hope it helped!
Please check out my other reviews.
Over and out.
Paul
