Lonnie Deals are financial boomerangs

Lonnie Deals are financial boomerangs:


I want to tell you about one of my favorite deal structures: the Lonnie Deal. That’s when an investor buys a mobile home on a rented lot for cash and resells it, offering owner financing to the buyer.


The reason I love them so much is they fit into any investor’s portfolio at any experience level. They work especially well for beginning investors.


If you’re a beginner, there’s a high likelihood you don’t have a tremendous amount of money to invest. It’s just as likely you have very little experience with things like paperwork and managing property.


With Lonnie Deals, these things aren’t problematic. First, these deals cost very little to get into. The most expensive one we’ve ever purchased cost $5,000.  We average around $2,500 on the purchase price, which is a pretty affordable investment.


Lonnie Deals are also easy in terms of paperwork; there’s only three pieces.


The first is a Mobile home titlebill of sale. You need this when you buy the property or if you sell it for cash. If you need an example of what a bill of sale looks like, Google “DMV bill of sale form.”

Second, you need the title to the mobile home. My suggestion that you look for a DMV (Department of Motor Vehicle) bill of sale wasn’t random. Mobile homes are literally t
railers. They have tires, axles, tongues, and they even have odometer. And since they are mobile, they are governed by the DMV. As such, each one will have a title – just like a car.


agreement for title


The last piece of paperwork you’ll need is called an agreement for title and possession. This is an installment contract that details how your new buyer will pay you, how long they will pay you and what will happen if they don’t. It ends by saying that once they’ve made their final payment, you will give them the title to the mobile home.


So Lonnie Deals are cheap to get into, and they have relatively easy paperwork, but they also give a new investor the opportunity to practice the art of screening while searching for a new buyer. That last part is huge. Being able to find good people who will stay in your homes, pay on time and be good to work with is essential for being a successful investor. With Lonnie Deals, you get learn this skill without the pressure of a mortgage payment looming over you like in a traditional rental.


The best thing about Lonnie Deals, though, is they’re financial boomerangs – by that I mean you often time get them back.


This month we got three different homes back. Now, in other situations it would be easy to freak out – you’d be thinking about the fact that you now have three extra mortgage payments to make with no tenant in the homes.


On the contrary, we get excited when Lonnie Deals come back to us. That’s because we get to sell them again. This starts the payclock all over, and we get a new down payment. Cha Ching!


Boomerange money


The reason Lonnie Deals come back so often is that peoples circumstances change. Take the three houses I just mentioned. Two of the owners got new jobs: one is Savannah and the other in Florida. The third owner was combining households to save up money to by a bricks-and-sticks house.


We’ve owned that last house three times now. Originally, we bought it for $3,500 and sold it for $10,000 cash in less than a month. Not too bad, huh? Later we acquired the same trailer for $2,500. We’re still $4,000 in the clear. We sold it with owner financing 10 months ago for $700 down with payments of $300 a month for three-and-a-half years. We’re about to start that process all over again, which is what makes Lonnie Deals financial boomerangs.


Joe and Ashley English buy houses and mobile homes in Northwest Georgia. For more information or to ask a question, go to www.cashflowwithjoe.com or call Joe at 678-986-6813.


  1. Joey, I always enjoy your articles, you have a wonderful way of breaking things down in simple terms. Thanks for your time and effort in sharing your knowledge.

  2. Joey,

    Talk to me about tax implications when offering owner financing, if you would. We are in Florida, and these park lot mobiles are a dime a dozen, on the beach, or surrounding 5 Star golf courses. There’s massive potential given our retiree rate (granted the parks allow the deals- they can be quite the sticklers here- even if we are offering quite the service to buyers and MHP owners alike.) I’m assuming tax is minimal on these deals?

    Also, your thoughts on the state broker/dealer licensing? From what I understand, both of our states require we obtain one to sell even one non-owner occupied for profit. I could sell these all year long (yay for Florida,) and would prefer to keep anyone with power off my back. I do like the idea of being able to offer the added bonus of having “paid my dues” and knowing I’m doing things by the book, so to speak…but man….seems like an awful lot of hoops to jump through for assuming all the “risk” on a metal box not worth more than $10k.

    Thoughts, ideas, input?
    All appreciated!

    1. Amanda can you call me to discuss? I see a few different ways to answer you and I want to make sure I answer correctly. My number is 678-986-6813.

  3. Hi, In the examples you give, I’m assuming the monthly payments are exclusive of lot rent. Do you collect that also to make sure it’s paid? Do you structure your owner finance deals so that you can evict vs foreclose for non payment? Thanks!

  4. Great information. I’ve been considering purchasing some MH due to the relative inexpensive start up costs.

    Do you collect lot rent or leave that to the Buyer?

    I’ve been advised that I can’t do an owner finance on a MH I’m interested in and retain title as the park considers it lease to own but it was suggested that I do an E Title to the Buyer while retaining a lien on the MH then sign a release of lien when the home is paid. Your thoughts?

    1. Hey Sherri,
      Great Questions.

      On lot rent, we generally make the buyer pay. That being said, We have done it both ways. On one, we negotiated with the park for a discount if we paid a year in advanced. They gave us one month free. That gave us a return on investment of 16.38%, which is an awesome return. On that one, we collect lot rent and the contract payment from the buyer. But if you are starting out, I would make your buyer do it. This does two things. One, they will need a relationship with the park manger for once they pay you off. Two, it confirms the fact that you are a lien holder and not a landlord.

      As far as eviction is concerned, on our contract it states that should the party default, our relationship turns into landlord tenant relationship and we evict. This expedites things and keeps you from having to do a repossession.

      As far as being a lien holder and conveying title, I wouldn’t for lots of reasons. One being what I stated above about default leading to a landlord tenant relationship. Two, being a lien holder on title could give the impression that you loaned your buyer money. That is not the case. You have agreed to take payments over time for your purchase price. This is called a installment sale. Loaning money to non investors carries rules that the SEC sets. You want to stay far away from that unless you want to get a mortgage brokers licences.

      If it were me, I would two do things. One go back to the park and explain better that you are not leasing the home. (They are probably worried that they are losing some of their control over the park if you have sub tenants. They don’t like this) Let them know that they are in full control, that they get to decide if your buyers are approved to be in the park or not. And if your buyer is not approved , they don’t get the house. Also let them know your contract with your buyer states that should the buyer break park rules, it is a default under your installment contract and that you will get them out.

      If that doesn’t work, then the second option is go to another park. Parks are everywhere and you can and will be able to do business this way in other parks. Don’t try to make a square peg fit a round hole. If this park is unwilling to understand were you are coming from, move on.

      Great Questions Sherri. I hope that helps.

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