Those who are selling mobile homes in parks for over $20k- How?

Question

Hello All,

This spring I'm hoping back into mobiles. I flipped two last year but both were sold in the $12-$15k range.

I see renovated homes that will sell for quite a bit more- my question is are the majority of you able to sell these for cash, helping buyers obtain financing, or doing seller financing?

The issue I ran into with my 2 flips was not having a lot of people with enough cash to purchase above that $12-15k range.

Thank you for any input!

Ken Rishel · Answer

There are many of us that sell manufactured homes for considerably more. I would suspect that all of us that do have either our own related finance company or a joint venture relationship to lend, or are using industry lenders. My current average amount to finance is around 40K. Their cash is their down payment. Fact: there are over 30 communities in the US that sell new homes in their land lease communities for over $300K and none of those are in California where there are manufactured homes selling for over a million in land lease communities.Without a financing mechanism, you will always be at a serious disadvantage.

Account Closed · Answer

How are those of you that are doing owner financing complying with the Dodd Frank law?

Rick Pozos · Answer

This Ken person always wants to put people down to sound more important. I am sure he/she knows quite a bit, but no need to put others down. Yes, if you are only doing a few owner financed deals per year, there should be no problem. If you are going to do a bunch of them, each state seems to have a different take on DF and SAFE as well as their own state statutes that is why I say to check with a local attorney. $50k sounds pretty ridiculous. Maybe that is what she gets per transaction, who knows.I dont sell any consulting or educational programs. I am just an investor who likes to help people further their own investing. Anyone can call me anytime, my phone number is on my profile.

Rick Pozos · Answer

@Natalie Kolodij you probably want to finance to a point where the payment is about equal to what they would pay for rent. That is kinda the norm. Sometimes the time will be several years or maybe even up to 10 or 15 years. As long as you can get at least half of your money back immediately you will be doing great. Yes, get a lawyer to keep you in line for DF and SAFE stuff.

Ken Rishel · Answer

It is not practical to quote: "get a lawyer to keep you in line for DF and SAFE stuff" for only a few deals.A qualified lawyer would charge at least 50K just to handle the lender's compliance system and she would need to either hire an MLO or become one and then get a lender's license for the state she is operating in.

Rachel H. · Answer

It will depend on your market and also your advertising efforts. If you market to folks looking for homes to put on their land, many of these people do have the cash to buy. Good luck!

Natalie Kolodij · Answer

@Rick PozosThis is exactly what I'm looking at doing. I want to talk to a lawyer to ensure that the interest that ends up associated with the payments in DF and SAFE compliant. I'd like to hit a higher price point- we're in a super hot housing market. So I feel like a fully renovated double wide should hit the $30-60k range So If I do $10k down, I'm worried about how long I'd have to finance out for owner financing.

Rick Pozos · Answer

Hey @Natalie Kolodij, if you have or can borrow the 5-10k that you are using to purchase the mobiles, and pay it back with the down payment, you can owner finance the mobiles for the next 7 or 8 years and have that cash flow coming in for a while. If the down payment does not cover the whole borrowed amount, do a promissory note for a year or two. After that it will be all cash flow for you.I am buying a mobile tonight for about 12k. No rehab needed. I will owner finance for about 6 years with 4k or 5k down.

Natalie Kolodij · Answer

@Ken Rishel Thank you again so much.

Ken Rishel · Answer

Disclosure: I am a community owner so people that work for me do the marketing, advertising, and selling. Many people working independently use MH Village to list their properties, and in fact many retailers and community owners rely on them to supplement whatever they are doing themselves.I do know that in major metro areas, that people do very well using specialized agents to list and sell their homes. It is my impression that these specialized agents are fairly rare, but they do exist and they know how to market and sell. Staging? I'm sure there are going to be many differences of opinion here. I personally believe in staging and every home we have for sale is staged. Obviously the price point of the home is going to affect what should be done when staging. If this is not your area of expertise, you might try reading on this website: http://www.lifestylist.com/ and touching base with Suzanne Felber, who is considered a guru in this area.