Paying Lot Rent for Your Buyers

[J Scott]

For those doing "Lonnie Deals," what are your thoughts on paying the lot rent for your buyers?

In other words, having an agreement with your buyers that says that they will pay you the total amount of your Note + Lot Fee each month, and then you turn around and pay the lot fee for them?

The disadvantage is obviously that you have created more work for yourself (paying the extra bill each month).

But, there are obvious advantages as well:

- Park manager knows he'll get paid on time;
- You know for certain the bill is getting paid;
- Buyer only has to write one check each month;
- You don't have to worry about surprise evictions;
- etc...

Thoughts?

[Marc Faulkner]

Mike,
I have done a bunch of "Lonnie Deals" and I am not broke yet! I have also traded millions of dollars in mobile home notes and have done a bunch of business with dealers in Texas doing installment sales contracts vs. rent to own or L/O. I would dare say some of these good old boys are flat out rich.... Also I have never been able to place any lease option paper in the secondary market. Since I love having the option of selling my notes and teach that as an exit strategy, I never looked into the subject much. I have had a firm mind set that I always wanted to work with owners verses renters and the headaches that go along with them.
I have recently been asked to research the subject so I am now trying to look at with an open mind. Please note that I am in Michigan and our state requires the buyers of used mobile homes to pay a 6% state sales tax when they buy a mobile home. Title can not be transferred and liens can not be placed without doing this. Now I am finding out that if you do LO's in MI that the state wants to collect a monthly use tax from the contract holder. This sounds like a big pain to me!