SAFE Act - Dodd Frank Strategies

[Brian Borchers]

Hello all,

Hopefully I didn't miss this when performing a search, but I've read over everything I can find on seller financing and it looks like it will now be more difficult than ever to sell the POH on any purchase.

I do have two thoughts on the matter though and hopefully someone with more experience can tell me if I am wasting my time. I'm investigating the purchase of two parks and wanted to see if if anyone knows the answers to these potential issues.

1. Purchasing a park with RTO contracts already in place. - Does anyone know if it is legal to finish out these agreements since they were done under prior ownership? If it isn't legal then I can imagine all kinds of issues with the tenants who thought they were buying their unit.

2. On a property where the units might not be worth that much for resale, if you sell a unit for a nominal amount (say $750) first, can you then legally sign a person to a longer term lease to the park? Assuming they are month to month, you could start a new agreement the following month to cover the additional cost of the unit at say $100 extra lot rent. Obviously there is risk here and you would have to discuss it with the tenant first, but this seems like a win-win situation if it is legal. They would be the legal owner of the unit and I'm within my rights as the property owner to increase their rent within the guidelines of my state, correct?

3. I've heard multiple people refer to seller financing deals over one year as the thing that triggers the compliance issues. Does this mean you can do RTO if it is only for a year? Obviously quite a few issues here and maybe I have misunderstood what people have been saying about the year timeframe.

Thanks for the help and the great forum.

[Ken Rishel]

For the group-

There were 350 manufactured home retailers and community owners in attendance for two days at this educational event put on by the Texas Manufactured Housing Association in Dallas on the implementation of all the new rules promulgated by the CFPB that came out of the Dodd-Frank Act. Every major lender was there as well as their attorneys and other attorneys as well. People like myself and Dick Ernst were also speaking and there were panel discussions led by one of our Washington DC attorneys. People (including other attorneys) seeking answers certainly had the opportunity to get them.

You get to decide what that means in relation to the comments on this and other threads.