Got some questions?

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Got some questions?

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Scott, thanks for the details on the LLC and I agree, I know, I had my chance to say more...LOL But even though mobile homes are personal property (unless converted to real property) they are specifically INCLUDED in the SAFE Act. FInancing them by individuals as investment properties will need to follow those guidelines. The mobile home dealers association was in the process of attempting to get an exemption for dealers with respect to the SAFE Act, but I'm sure that will be up to the state as well as HUD, and I bet they are not exempted, just guessing, but I don't think they will get it. Bill

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Alex, the SAFE Act will apply and since your MHs are not owner occupied, you will need a mortgage originator. You'll need to check with state law as to how many notes you can do as well. I would also say that if you have an LLC, you should use it, especially since you probably are not getting financing for your deals. Using multiple LLCs will probably not cut it with the state as you would have a material interest in each deal, regardless of what you call yourself, it's still you! As to creating your own notes, having a mortgage originator originate the loan does not mean you can't do the note, but you'll need to check on what the originator is allowed to originate. You might want to consider options and finance the option price or do a sale contract that expires and can be renewed with an additional amount to the down payment. Good luck, Bill

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While I completely agree with the other 2/3 of realtyman's response, I don't agree with this at all... First, there are plenty of "non-shady" reasons to take title in the name of an LLC or corporation. For example, if you have a lot of personal assets, a business entity will help shield your personal assets in the case of a lawsuit involving the property. I'd hate to lose my house, my savings, and all my assets because someone slipped and fell in a $2000 mobile home I purchased in my own name. Secondly, there are potential tax advantages to holding real estate investments in a corporate entity. Personally, I save about $15K/year because I hold my property in an LLC with the appropriate tax structure. Unless you consider protecting your assets and limiting your tax burden shady, there are several reasons to use a business entity that aren't shady. As for dealer status, I can't speak for all states, but where I live, dealer status for mobile homes has to do how many you buy, not whether you buy them in a corporate entity or not. In fact, there are ways to use corporate entities to get around this limit, so where I live, you could potentially use the business entity to AVOID dealer status. Not saying that there aren't some people who do shady things with business entities (no doubt there are), but that doesn't mean that there aren't really good reasons to do so...

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The SAFE act is definitely making waves in the industry. It's crucial that you understand where it applies and where it doesn't.

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I'm in Ashland more than Huntington. I go to Huntington when I need more options to eat out.

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Wow, I have spent a lot of time in Portsmouth the past 2 or 3 years. My partner has several houses and tracts of land that he inherited several years ago... I have been up there salivating over what he could do with the places.. but noone ever listens to me, haha. If it wasn't such a drive for me, I would take them myself. Portsmouth is a nice town, something about it being so close to the river, etc. I actually have to go up there sometime soon and help mow grass. :( He had one place that I helped him rehab in Lucasville, it sold about 2 years ago.... Very nice area. You ever make it to Huntington?

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John, I see you are located in Huntington, WV. I'm just a short drive down the road from you in Portsmouth, OH.

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I agree, I NEVER buy investment property in my own name.. it is just not good policy. When some paralegal is down at the courthouse looking to see if I own anything, nothing shows up... I don't want anyone knowing what I have and don't have. LLC's and other entity's are business tools, they do have their problems... but it is better than the alternatives.

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Reid, I have my attorney working the Safe Act right now. We had a short chat to day about this, and he seems to think that I'll be fine holding a note on a mobile home. I'll know more after he fully reviews it.

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I'm definitely going to get these issues ironed out before I buy anything. I appreciate the info guys! Thanks, Alex