Mobile Home notes

[Jena Liberty]

Hi Everyone,

I have an opportunity to buy one or several mobile home notes. They range from $5000 to 23,000 with an interest rate of 12% across the board. The seller is trying to raise capital for expansion. Assuming the notes I am looking at pass due diligence would I ask for a discount on the notes and if so how much? And does anyone know of any books on buying notes?

Thank you 

[Kevin Moen]

@Jena Liberty Firstly, you can always buy a loan and board with a licensed loan servicer, so don't worry if you are not licensed to do so. Secondly, to Ken's point you should make sure the notes are Dodd Frank compliant if originated after 2012. 

The answer to your discount question would require knowing a lot more about the note. High yields are exchanged for risk. Note pricing is a fairly complex consideration, and all buyers have their own underwriting and metrics to price loans and assess risk. The questions you need to know to asses are: 

- UPB of loan, FMV of property

- Borrower credit score

- Borrower down payment

- Borrower pay history 

- Loan structure

- Interest rate and loan term

If you know that, or get that info and want a note buyers opinion of offer price, feel free to message me and I would be happy to help. 

Kevin Moen