Vehicle Dealer License?

Question

My wife and I were hoping to start flipping mobile homes but I found out today that I might need a dealer license. I get the impression that it is a federal requirement, but that the licensing is done through the individual states. Does anyone have experience with this? I think we would have to establish a dealership, including office space (PA law requirement) before we even got started.

Thanks!

Ken Rishel · Answer

Dealer licensing is a state, not a federal issue. Every state is different and the laws change from time to time. (They are changing in Illinois even as I write this to be more favorable in the licensing requirements and fees for community based sales operations.)

Here is where confusion about federal law might arise. Manufacturers cannot sell directly to anyone but a state licensed dealer. That however only becomes an issue for those dealing in new homes. Everything else is governed by state law.

As a member of the Board of Directors of the Illinois Manufactured Housing Association (disclosure) and a former member of the boards of two other state associations, and a member of the Manufactured Housing Institute's (national organization) Dodd Frank Task Force, I would be remiss if I didn't point out that being a member of the state associations in which you do business is a terrific investment in most states. Mary, the head of the PA association, is one of the best in the country.

Andriy Boychuk · Answer

see previous post @Daniel Mills

@John Fedro

Andriy Boychuk · Answer

@Daniel Mills

• Go to PA Department of state website 
• Search and download Law - Board of Vehicles Act
• Go to Section 26 #4. Exemption from licensure and registration.

It states "This act shall not be construed to require licensure and registration in the following cases: .... (4) The sale, exchange or purchase of fewer than five manufactured housing or mobile homes by a person in one calendar year."

Also, you can call this number to find out more information 717-783-1697.

FYI. You have to have 2 licenses to operate used mobile home business. One license is vehicle dealership license and another one is sales person.

Here is great article by @John Fedro

http://www.mobilehomeinvesting.net/mobile-home-license-per-state-how-many-can-you-buysell-per-12-month-period/

I hope it helps.

Daniel Mills · Answer

@Sam Parkins

Thanks for sharing your experience.  I don't think that there is a federal license, only a requirement for getting a state license.  But, I didn't even realize that I needed to be looking into any of this until yesterday.  On the other hand, both mobile home salesmen that I talked to yesterday also flip homes (I didn't know that before approaching them about properties they had listed for sale) and I don't think they were necessarily wanting any competition. And no, I don't have any plans to manufacture mobile homes! :D

@Andriy Boychuk

What you say sounds reasonable, I don't see how selling a few makes you a dealer.  I read the PA laws regarding licensing for dealers, but couldn't find a definition of what makes you a dealer.  I want to follow the rules, but if we have to set up a separate business location this is a non-starter.  Is there somewhere that I could confirm the 4 mobile home exemption or is that something that you learned as part of the licensing process?

Andriy Boychuk · Answer

@Daniel Mills

I got my dealership license in PA one year ago. It is the state requirement. The best advice I can give you is to buy and sell 4 mobile homes (you do not need the license). If you like the business, go ahead and get the license.

If you have any questions about how to get the license, feel free to ask.

Sam Parkins · Answer

My understanding is that you don't necessarily NEED a license to flip mobile homes. In the eyes of the IRS I believe doing more than 4 in a year makes you a "dealer", but it's my understanding you don't HAVE to have a license to do so. I could definitely be wrong and don't want to advocate NOT going through the proper processes to get in business.

Again, to my knowledge it is not a federal requirement but rather the licensing is through the state. At least in VA the licensing is through the state.

In VA there are different classifications of licenses, and maybe that's worth checking into for PA. I don't remember them off-hand, but suffice it to say that there's a "retailer" (think Clayton Sales-center), "salesperson" (sales), "manufacturer" (I don't think you plan on making the homes), and one other I think is "broker". Check with your state and you should be able to find that online. Try Dept. of Housing or some similar site (dept) like that.

We buy/sell in VA and do have a dealers license. If a federal license is needed then I need to know (if anyone else knows) and need to get it assuming it's necessary. We rented an office, put a sign on the door and it had a parking lot. I believe we got the "brokers" license; when I was audited they took the "parking" at face value. It was big enough for a mobile home but we never obviously pulled any there.

Long and the short is to check with your state authorities to see what they say. If you plan to have a serious business you'll make enough to afford a cheap office and you should look into the license. Good luck!

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