LT Cash Flow : Renting vs. Owner Financing (mobile in Park)

[Natalie Kolodij]

Hey guys,

What we had originally planned to do was buy-hold-rent mobiles in parks; however it seems near impossible to find parks that allow this. It seems the popular way of avoidance is by technically selling the home w/ seller financing. 

My question is- is it worth it to try to find a few parks that will let me rent or should I just take a straight seller financing sale approach?

Example:

Trailer  Cost= $5,000

Lot rents here= $500 ish

Reasonable rent for trailer in park= $1,000

Takes 1 year to recoup the trailer investment. Then after 1 year we are just bringing in $500 a month clear. 

Time to make $5k Profit= 1 year and 10 months 

If we Seller Finance....

Lot rent is $500

Trailer cost= $5,000

Trailer re-sale value= $10,000

So we make $5,000 profit in the deal plus interest 

However- if we still price it to where we're bringing in $500 a month from it...The income only lasts for 2 years. Then no more residual income. 

Is there a way to make owner financing more profitable? 

[Michael Henry]

Originally posted by @Omar C.:

@Natalie Kolodij 

You can't do any type of owner financing even if you do it at 0%.  Dodd Frank killed any possibility of doing so.  The only option is to sell it outright or via a lease option to buy.

 From my understanding you can do owner financing for an Owner Occupant (is doesn't apply to none owner Occupants) but the Buyer need to under written by a licensed loan officer.  This only applies to real property and personal property. I think mobile homes are personal property? 

Which that being said, are people doing owner financing deals without a licensed loan officer? Yes!  

No matter what State you are in, once the occupant takes possession of the property  through Seller financing and something go wrong, the burden of proof is on the lender to show that they did not lie and manipulate the Buyer into the financing. This is why we sign so many documents at the closing for normal institutional financing.