Bought a cheapo mobile home, now what?

Question

I bought a fairly nice MH today in one of the nicer parks in my area for $3,500. My exit strategy was originally going to be selling with owner financing, something like sell for $9,000, get $500 down payment and finance the rest for about $250 a month over 42 months.

But I've been researching this whole Frank-Dodd act and I still can't get a clear answer on whether this is legal or not. I'm in Missouri, which allows up to 4 of these deals before someone is considered a 'dealer', so I'm okay there, but the gist of the posts I have read seems to be that I am NOT okay selling this with owner financing.

My other exit strategy would be to simply sell for $9,000 cash and offer to pay up to $1500 for someone to move it to their land or where ever, since the lady I bought it from said that she had a lot of people interested in buying it but then could not afford to move it. But this might take longer than selling with owner financing.

So does anyone have an alternative way to profit here? I'm very confident I'll do fine on this deal, worst comes to worst I can sell it for $5,000 or $6,000 cash but I'd like to maximize the profits while at the same time staying legal.

I am not allowed to rent the place out in this particular MHP, not that I'd want to anyway.

Thanks in advance.

Vincent Crane · Answer

Where you really want to be is in buying mobile home parks and collecting lot rent every month, and have bank owned mobile homes so you don't have to deal with maintenance, or rehab, and you'll make a lot more money. There's a lot of threads and podcasts on here about MHP investing.

Vince Mayer · Answer

@Dan Simpson

Talk to a real estate attorney if you want legal advice on real estate matters.

I am a member of Legal Shield, formerly Pre-Paid Legal, and I have a business plan for $40 a month. It saves me a lot of money when I need an attorney to answer questions or review documents.

This is not a solicitation but free advice. Which is what you're asking for here on BP.

Al Bunch · Answer

@Dan Simpson I don't believe it to be one way or the other - I haven't completed a seller financed mobile home deal since 2003.  I prefer to rent mobiles and on land rather than in a park.

Thang Cao · Answer

@Dan Simpson, https://youtu.be/SdvYUdxNwPs

That's a good start. Also, this is your first deal so Dodd-Frank doesn't apply, as far as I know.  Again, consult an attorney, I'm not a lawyer.

I would do owner finance over longer period of times.. Look up John Fedro on BP, and watch this one,

https://www.youtube.com/watch?v=FpxRknHLB9Q&list=P...

Happy Investing,

Dan Simpson · Answer

Thanks for the replies Al.

I've already talked to the park owners and I know that the home can stay in the park, and I know that I can sell it with owner financing. So that's not an issue.

The issue is the Frank-Dodd SAFE Act. Can I legally sell this home owner financed? This isn't a rent to own or any kind of installment sale. It sounds like from your replies that you believe it to be legal. But I've read that one might need the services of a licensed loan originator to legally sell a home - mobile or not - with owner financing. So I guess that's what I am getting at. This would be a "Lonnie Deal"if I sold owner financing and everything I've read indicates that we can't do Lonnie Deals any more

Thanks

Al Bunch · Answer

...an even less expensive option might be to look at moving the MH to a different park what -will- let you rent or seller finance.  Just make sure you get something in writing from someone with the authority at that park to allow you to do that.  Sometimes parks will even offer you some type of inventive to move your home to their park - cash rebate against the move cost is popular, free hookup & skirting, or free deck & stairs.

Al Bunch · Answer

Talk to the park manager and see if they'll let you rent or seller finance with the home staying in their park.  It depends on your park/park manager, but if you walk in and ask about those two exit strategies first and get a "no", then ask what you need to do to get the home moved out of the park.  Sometimes the prospect of losing a paying tenant will motivate them to offer you alternative solutions.

If you still get a no, look at moving the home to a private piece of land and seller financing or renting it out there.  Check MH neighborhoods with similar style & similar age homes where the utilities are already available.  The higher up-front lot cost will be worth it over having to clear land, sink a well, install septic, run power, etc.

Bought a cheapo mobile home, now what?

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