Lubbock businessman spends $9.1 million on FEMA trailers - KCBD NewsChannel 11 Lubbock

6/7/10

Lubbock businessman spends $9.1 million on FEMA trailers

By Ann Wyatt Little - bio | email
Posted by Amber Stegall- email

LUBBOCK, TX (KCBD) - Just days after Hurricane Katrina hit the Gulf Coast, the government purchased travel trailers and mobile homes for temporary shelter. Now, four and a half years later, the government agreed to sell thousands of FEMA trailers for pennies on the dollar, and one local business owner is jumping in on what he is calling good business.

The government auctioned 103,000 temporary units back in January. Lance Inderman owns Mustang Homes and Land, and spent $9.1 million for 9,100 trailers. "We believe they wanted to be out of the trailer storage business, and saw no other way to do it, and then make a mass liquidation," says Mustang Homes and Land owner Lance Inderman.

The government put 103,000 trailers on the auction block. It cost the government nearly $220 million to store them for three years, a bid Inderman couldn't pass up. "If there is an opportunity to buy a product for less then what it's worth then hopefully the profit potential is there and we can pass some good deals on to our customers," says Inderman.

He spent $9,120,000 for 9,104 FEMA units, a random mix which included units in different conditions, some he says are better than others."The government spent $12,000 to $30,000 a piece and I've yet to sell one for $12,000. We've got them from $3,000 to $10,000, so it's a great opportunity for customers and our business."

Many of the units he bought, the government originally purchased from Gulf Coast RV dealers, used by FEMA for temporary housing after Hurricanes Rita and Katrina."If I hadn't bought from FEMA and didn't have disclaimer on it, you wouldn't know would be the same unit you would buy at local RV dealership."

That disclaimer, the government discovered formaldehyde in many of the more than 100,000 FEMA trailers, a chemical used in wood products.

"They are the same RVs the government is selling; they just come with a warning label and documentation. They aren't to be used for housing. Commercial recreation purposes are permitted and they are RVs and we have to make notification to consumers."

For now, there are only half a dozen FEMA trailers on his lot in Lubbock with FEMA barcodes. "We may see a couple hundred roll into Lubbock, Texas before too long."

So what is he planning to do with these trailers? He will sell them to wholesalers, and Inderman passes along the disclaimers. Consumer advocates and environmentalists are critical of the government's move to sell the trailers.

Inderman says just like when you are in the market for any product, if you don't like it, you don't have to buy it.

Copyright 2010 KCBD. All rights reserved.

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