Buying a mobile home in a 55+ community and being "underage."

[Knute Olsen]

Hello all,

Looking to start my Real Estate investing career, and it seems the best bet (as far as profit margins go) are in mobile homes.

I have some cash on hand, so I am looking to buy a mobile home for cash in a Mobile Home Park. Put a little lipstick on it, then turn around and either rent it or sell it with owner financing.

As I am searching for mobile homes, I am finding great deals in 55+ communities. I think these would be great to buy with cash, fix up a little, then turn around and sell on owner financing terms. It would be affordable monthly payments to an elderly person who is likely to take good care of it, not flake out and vacate, but can't have rent increases because he/she might be on fixed social security income. Basically, I would be the bank.

My main sticking point is, well, I am not 55 years old. Not even close. I see lots of people in the forums who buy homes in mobile home parks to rent out, rent to own, or sell with owner financing. Assuming you are under age 55, how do you get around the age 55 restrictions as a buyer?

[Jefferson Lilly]

I don't believe your youth can be held against you. Laws regulating the age of mobile home park residents are just that - they place restrictions on who can actually *live* in the mobile home. You'll not be living in the mobile home, so you are free to purchase it. Heck, once you own it, you could haul it out to some other MHP - or put it on your own land. I do not have exhaustive knowledge of age restrictions in all 50 states, but I do have extensive experience with one of my consulting clients here in California - one of the most regulated states. And the 'only' restrictions are on actual residents of the mobile homes, not the owners.

OK, so that's a long-winded way of saying "just go ahead and buy it, but I still think you'd be better-off being very above-board with the park owner about what you are doing." Who knows, you may find the park owner points you to a few other good deals in the community - or to another community they own with similar homes.

In fact, we would welcome someone like you working in our parks in Kansas and Oklahoma. Let me know if you might like to have a discussion about that.

One other thought: many MHPs that say they are age-restricted, aren't. They are just practicing age discrimination without knowing it. To be a legal 55+ MHP requires certification from HUD. Ask your park for a copy if their certification to be an age-restricted community. If they can't produce it, they are likely not really a seniors park. In which case, you could put anyone of any age in your home. But again, it's best not to ruffle the feathers of the park owner; work with them, not against them.

As regards Dodd Frank and SAFE: I believe everyone is allowed one of these sales per year without being subject to the burden of becoming an official Mortgage Originator. Further, structuring your deal as a Rent Credit agreement (similar to RTO) is generally regarded as being not a mortgage, and hence is not subject to Dodd Frank or SAFE. Finally, HR1779 is making its way through Congress and if passed, it will specifically exempt manufactured housing.

My 2 cents worth, and good luck with your new adventure in mobile home investing,

-Jefferson-