I can not seem to find a mortgage company willing to finance a mobile home as an investment property. Its permanantly attached to the land and taxed as real property, FNMA/FHLMC would do it as a primary or secondary but they do not allow for investors.
Have you considered private funding? The requirements are usually quite different and the turnaround time much quicker than traditional loans.
One of the reasons I got involved in commercial capital funding was my interest in mobile home and park investing. Mobile homes have been a great way for me to enter into real estate investing with smaller liabilities but good returns. Over time I continue to expanded into larger projects- by the end of the year we hope to find a local park to invest in.
Call the mh dealerships in your area. Ask to speak to someone about financing. Tell them that you are looking for a lender that is willing to finance a mobile home as an investment property and see if they can point you in the right direction.
Most dealerships do not have in-house financing so if they do not know of a specific lender that will what you want then ask them if they can give you the name and number of their favorite lender. (You want this name and number because it is usually a direct number to a human and will hopefully keep you from being transfered and having to repeat your story 500 times.)
Call that person and if they cannot help you then see if they have any idea what other lenders might.
Here is part of our underwriting guidelines for mobile homes:
Investment property = 85% + 10% seller 2nd
680 Middle credit score; FULL Doc only for Investment property; only 620 Score for Primary residence (other doc types available for PRIMARY Residence also)
while others might disagree, I would suggest avoiding an MH altogether if another investment presents itself. I have sold these things in California, and the resale is tougher than SFRs or condos, even when built on permanent foundations (as that loan above requires). The appreciation rates also tend to lag behind. Stuff built in the last few years are easier on both counts, but anything older than say, 10 years, and you have added problems of being highly susceptible to water damage and you can't defer maintenance on them at all. There also fewer loans available. If the unit was built before 1977, avoid it entirely unless you plan to tear it down.
Lending guidelines are totally different with mobile home compared to traditional stick or brick built homes. Is it a singlewide or a doublewide? What year was it manufactured? Do you own the land or do you rent your space in a park? What state is the mobile home in? These are a few questions that need to be answered.
Have any of you used seller financing of mobile homes for investment purposes? I've heard of people buying the MH for around $3,000 and financing it for $12,000 for a 3-5 year period. The buyer also pays the lot rent and utilities. Anyone ever done this?
Seller financing makes a lot of sense as a way to get in. I know of only one lender that will loan on Mobil Home if you do not own the land the MH is on and they will only do loans in CA.
Have you considered private funding? The requirements are usually quite different and the turnaround time much quicker than traditional loans.
You can review some of the benifits at my website- www.basefunding.com. One of the reasons I got involved in commercial capital funding was my interest in mobile home and park investing. Mobile homes have been a great way for me to enter into real estate investing with smaller liabilities but good returns. Over time I continue to expanded into larger projects- by the end of the year we hope to find a local park to invest in.
I checked out the website and it says that they will not finance mobile homes?
In my experience, you've got to put a minimum of 20% down in order to get a bank to give up the money on a mobile homes. Also, you need to impress upon the bank that it is a MANUFACTURED HOME, not a mobile home.
It helps also to go to small local portfolio lenders rather than the big banks that package their mortgages and sell them off. Having said that, I did just get a loan, as an investor, from Bank of America for a manufactured home (double wide mobile home) on land. I had to put down 20% though.
Locate American General Financial Services in your area, they are a nationwide lending source that WILL do inverstor financing on trailers that have been converted to real property and do a 65% LTV loan.
Part of the deal with MH investing is the lack of financing options. Hence the buyers get better deals when they buy because fewer people have the cash to buy. Seller financing becomes more interesting when you are the seller as you can do deals that other sellers will not offer.
Check out Lonnie Scruggs books.
When there is land and the home is attached to the land so there is one title you have more options. Not as many as a stick built home but more than when the lot is rented.
As an owner of MH's and parks seller financing is the best way to go. Don't be afraid to get creative so loang as it meets the seller's goals first. Also I have found that local small town banks in the same city/ area can be open to financing but it helps if you also live in that city/ area. And you really need the land with the home as well.
I am finding seller financing is more of the norm now for purchasing mobile home parks. I have used lease options quite a bit. This will allow you to control the MHP and then you can refinance at a later date.