How do you sell

Question

When you sell your homes, Do you keep the title or is it in the buyers hands. Do you Owner Finance, Rent To own. How do you sell.

I rent to own and I do not need to worry about the safe act. I am 100% sure of this. That title NEVER leads my business name until I title them the home and that is rare as most default.

J Scott · Answer

There are an unlimited number of ways to do things in the real estate business, and if you find something that works for you, definitely stick with it...

J Scott · Answer

When I was doing MHs (owner financed sales), I would put the title in the buyer's name with my company as the lien-holder. This ensures that the buyer is on-the-hook for taxes, is officially the owner-on-record at the park, etc. When the home was paid off, the title was signed over to the buyer. If the buyer defaulted, the title was put back in the company name.

Mike Matthews · Answer

Deb, all the park mangers I use do for me is , let me know about homes for sale. If I buy a home they told me about, I pay a fee. Now they can help me find a buyer for that home, and make some more $$$$. A park manager job is very difficult and I would never show such disrespect as to ask her to work for free. Now as far as getting your cap rate up fast for a mobile home park. Would it be cheaper to pay and investor to bring in their homes. Or would it be cheaper for the park to buy homes? The fastest way to get the value of the park up is to fill the spaces with homes. That is why they do that. Once the park is 90% full they can refinance the park and pay back their investor partners. If they buy homes now their expense ratio is way out of whack. Myself and others such as I are the fastest way for a park to grow in actual worth. Not that Pro Forma garbage.

Leslie A. · Answer

Hi Deborah, As far as the park paying an incentive to the investor to move a home into their park -- I suppose it depends on how slow the market is in your area. Here in the Houston area some of the parks are paying $2500-$5000 to move a home in because they need occupants for their lots. The other things you mentioned - the managers overseeing rehabs and the move - I haven't heard of anyone asking a park manager to do all that. I would imagine they would have to pay that manager a hefty fee to do all of that. I may have missed it, but I didn't see anyone on this board suggesting that a manager would do all that for an investor.

Deborah Mettler · Answer

We rent-to-own our mobiles. We do not put title into the tenants name as they are still tenants. We pay the taxes on the mobiles up until the time the tenant makes all the payments, then the title is transferred to the tenant/now buyer. If holding for passive income, we will pay for transport and rehab as the return is far greater than the outlay. I personally have never heard of a mobile home park paying someone to put their mobile in a park until on this thread. We would never entertain that idea. We will offer incentives, such as 3 months free lot rent to folks that want to move in their own mobile and live in it. If an investor wants to move in a mobile home, they have to pay a small fee each month (to cover property taxes) up until the time the mobile is rented, then the lot rent is added to the tenants monthly payment. And something that has irked me a bit in reading some of the threads is...park managers don't work for free. Managing a park is difficult enough so why would a park manager help an investor get his mobile set-up in their park (in where the investor gets a return on his money), manager has to find a lot, get the mobile moved and set-up, runs the rehab if needed, gets the permits, shows the mobile, gets it rented, etc. etc. and not be paid for the amount of work this takes? This takes on a different title - project manager.

Bill W. · Answer

Understood. As long as you're happy with the arrangement of making the PM a boat load of money at your expense, that would work

Mike Matthews · Answer

No the park manager found me the home, that is why I am paying her a referral fee.

Bill W. · Answer

Safe Act doesnt say anything about whether transferring title has any impact on applicability. In Texas, TDHCA regulation states that you transferring title into another's name constitutes a sale rather than a rental though but other guy does not live in Texas. I am pretty sure some states allow rent to own structure with transfer of title. Your numbers are ok but I would probably pass. $9000 out of pocket, plenty of work overseeing the move and repair, and $500 a month until they default in two years which you state is your business model. I would imagine you'd do better if you cut your costs down and time investing in rehabbing/moving. And you pay referral fees to PMs when you move a home to their park? Weird arrangement. Should be other way around. I know of some parks in my area that pay Lonnie Dealers up to $6000 to get homes in their parks. You might want to do some digging and see if you can find that arrangement in your city.

Mike Matthews · Answer

Well that is Not a Rent to Own, if you ever sacrifice a title you are financing your home and you fall under the statutes of the SAFE ACT. As far as Referrals go.I just got a referal 2 hours ago from one of the parks I work. I will buying this 18 x 80 single wide for $500 plus moving expences. As agreed I move to the managers park. And pay her a $200 referal fee. Home has 4 k in repairs All in less than 9K I will sell for $27,000 at 13% interest. How do you like those #'s. So back to my point. Keep the park managers happy and the leads will come to you. I make more money from park managers than all other forms of advertising combined.

Geofrey Villaruz · Answer

When doing Rent To Own, I am transferring title over to new owner and use my company as Lien Holder. I have the Title notarized as well as my purchase agreement contracts. Some parks do not allow you to rent the MH out. So once the title is transferred then usually i give the park mgr. a proof copy of the title showing the transferred owner. This is the best way for me as the Park Managers/Owners will normally let you get by in this type of transactions. It pretty much boils down to what the park requirements are. If MH is on a land then in that case I would possibly hold the title. Yes, Real Estate has a bunch of creative financing so which ever works the best is normally what I do. I Disclose everything and this way I can get referrals to other parks from the park mgr and build that strong relationship that I have learned from advice such as yours and others on BP.