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I just discovered your home page & it is great. I can comment on 2 of the gurus.

You are correct that Jimmy Napier is fascinated with compound interest. He is an excellent businessman who really understands cash flow and return on assets. In addition to houses, he has invested in such mundane, blue collar occupations such as mobile homes, used cars, backhoes and, his latest kick, buses. In every case he has created a cash cow by buying an asset low and then very astutely increasing the revenues and cash flow. That may seem obvious, but not to everyone. I recently moved to the country & I cringe every time I drive by a neighbor's farm & see a $50,000 bulldozer sitting idle for weeks at a time. Jimmy has definitely elevated my consciousness about maximizing the use of assets and equity.

I am not qualified to comment on his real estate expertise as compared to other gurus. But I have noticed over the years that it is not necessary to be an expert to make money in real estate. I know many people who have acquired houses & duplexes over the years, paid them off, and now have substantial assets and yet they know less than the average realtor.

I disagree about Jimmy's cult status. He has lost much of his following in recent years. The problem goes back about 5 years. He taught an Advanced Paper course in Pensacola, FL 2-3 times a year. Jimmy would present some material and then respond to newspaper FISBO ads from people selling houses or paper. He would actually negotiate the deal in class. The original concept was a very good teaching vehicle but it evolved into a market where class members would present their own paper for sale. The result was predictable: much of the paper sold went south and lots of folks lost money (including me, unfortunately). Not all of the paper was bad. I am still collecting on some good notes. Jimmy's position is that he always said to do due diligence (true) and that he never recommended anyone (questionable). In any case attendance in Pensacola has dwindled. Last time I talked to someone who was there (2 years ago), fewer than 50 showed up where there had been 175-200 in the old days, with many regulars. I think most of the bad paper was the result of overexpansion and poor business practices rather than theft. But it does not matter; the money is gone either way and I and many others now know more than we ever wanted to know about bankruptcy and the rights of unsecured creditors (none). The big lesson learned is to create your own paper, which brings us to Lonnie.

I have read both of Lonnie Scruggs' books several times and they offer many great money making ideas using mobile homes. A number of my friends and I are doing the traditional "Lonnie deals" where you sell a mobile home and take back a high yield note, and, as in many things, it ain't quite that easy. There are 2 serious pitfalls which stem from the vacancies endemic to lower income housing. The first is costly repairs when the occupant leaves. The home is usually a mess. I have been totally unable to rent or sell a home that needed substantial work. Even the sloppy people want to move into a clean home (but they will trash it in a month). I admire Lonnie if he can sell a home as is; he must operate in a very tight rental market.

The second problem is the lot rent. Lonnie says to negotiate a deal with the park where you do not pay when the home is vacant. No way, at least not for anyone I have ever met. This causes severe cash flow fluctuations, as for example, when an occupant paying you $200 a month & the park $150 in lot rent moves out, your cash flow goes from +200 to -350, not counting utilities. Because of this my strategy has now shifted to acquiring a small park where I will control the ground & other residents. But Jimmy & Lonnie have so well publicized mobile homes and parks that there are very few bargains left out there. Neither I nor any of my friends have been able to really solve these problems; we just endure them. Since they are both caused by vacancies, this seems to imply that "Lonnie deals" are much more sensitive to the local market than anyone suspected. (Just like any other real estate.)

Dennis Mahoney