State of the coach market

[rmboies]

I hope to maybe see some of my East Coast POG friends on the trip north.[/QUOTE]


Ray and Kathy, we couldn't be happier for you and that is a smart looking coach....Remember, we can be on your way north from Florida so please let us know when you are coming through, ok? Looking forward to seeing your new ride first hand!

[wrongagain]

AJ,
Did you bring the coach home, "new england" or did you leave it out where you were using it.
I ask because when I was looking, and probably you also, there is nothing in the new england area to even look at.
Are you missing a marketing opportunity by not having it in an area where you will be the only guy selling one.
I know from my way thinking there is something to being able to buy close to home.
As far as the financing dilemma, when I was first looking there was a lot of concern over the ages of coaches I was willing to shell out for, so I decided to just write the check and have it over with.
But,...
"Newcoast financial services",
would have done it for me on a ten year loan, maybe they still will work with you and your potential buyers.

[mikedee]

I have sold many items on contract with a balloon in 3-5 years. You can normally get at least fair value, and interest at a point or two over lenders. Just try to get a decent down, say 20% and make sure the insurance policy names you as the loss payee.

I learned the business from my father, great banker just did not have a bank. At one time he had 88 houses, cars of all kind, boats, and motorcycle's on contract.

We never knew what we were going to find at home. It was great we got to use what ever he took back. Best two item's I remember were a Donzi power boat, and a cool Hobe blow boat

[Joe Cannarozzi]

AJ give a plug for those guys they are both sponsors and good folks.

[ajhaig]

Joe - You are correct about the dealer, they are real good guys and I should make it very clear that I don't have any problems with them, they are working very hard on my behalf. I would highly recommend them to anyone looking to buy/sell a coach or for service work.

The issues in the lending market are well beyond the control of any individual, dealer or converter. As coach owners I think it is important to understand the dynamics of the lending market as it has a direct impact on our respective coaches' value and the liquidity of the coach market. If lenders have indeed recently pulled back from lending on coaches over 10 - 15 years old, that is a meaningful change that we should all be aware of.

Jon - I agree with you regarding financing, we didn't finance our coach and we intentionally bought an older model because we knew that there was a good chance that we would be selling it within a year. My theory at the time was - if you fall out of the basement window, you don't get too hurt. There have been times when I've felt that the coach has more characteristics of a liability versus an asset, but our experience on the road was truly life changing and you can't put a price on something like that.

I'm warming up to the idea of being creative with the sale... I've always wanted a Donzi and now that we are in Vermont I could use a farm tractor!

[Loc]

AJ,

Sorry to hear about the troubles with selling the coach. You have to love the credit markets. It is amazing what happens when artificial demand disappears. The structured market (CDO's, CLO's, ABS, etc.) was a financial alchemist's gold mine. Every lender was able to make a loan without having to worry about risk because before the ink was dry the loan was sold into some securitized product and the lender made a nice fee. There was every incentive to make loans to generate fees and underwriting suffered (at best). The rating agencies aided in the game by rating these instruments as high quality and investors scrambled to purchase them because of high ratings and relatively high returns. Now that the structured market is a fading memory, lenders are having to think about underwriting again and they do not have any appetite for risk. Unfortunately, I think this one will last for a while.

[Jon Wehrenberg]

I hope it does.

As long as the commercial lenders are shying away from lending money guys like me have become lenders.

I am financing the homes on the remaining 11 lots in a development I did. I own the dirt under the house, and I am lending only 56% of the selling price of the house for the construction of the house. I'm well secured and no bank would touch the builder. They did not want the risk.

So commercial lenders, keep your money.

[tdelorme]

AJ,

Sorry to hear about the troubles with selling the coach. You have to love the credit markets. It is amazing what happens when artificial demand disappears. The structured market (CDO's, CLO's, ABS, etc.) was a financial alchemist's gold mine. Every lender was able to make a loan without having to worry about risk because before the ink was dry the loan was sold into some securitized product and the lender made a nice fee. There was every incentive to make loans to generate fees and underwriting suffered (at best). The rating agencies aided in the game by rating these instruments as high quality and investors scrambled to purchase them because of high ratings and relatively high returns. Now that the structured market is a fading memory, lenders are having to think about underwriting again and they do not have any appetite for risk. Unfortunately, I think this one will last for a while.

Yea right, Loc. You took the words right out of my mouth. Now what the hell did we just say.

AJ, Loc just said your screwed till a cash buyer comes along and believe it or not, they are out there.

[jelmore]

I'm not sure if this about financing helps us or not. Ours is a 2000 and it seems that keeping it until it's 10 years old would be costly or make it more difficult to sell. Someone buying this age coach now can get financing so maybe a 2000 is desirable for another couple of years? Of course, we're looking for the cash buyer that has to have this coach!

[Jon Wehrenberg]

If you want to know about costly, trade up every few years. The depreciation will feed a small starving nation.

Maintaining a coach, regardless of age is significantly less expensive than buying a newer one just to avoid repair costs.