Nuts and Bolts of Seller-Financing a MHP?

[Thadeous Larkin]

'Sup nerds?

We're negotiating seller-financing for an off-market MHP.  That's cool, right?  Go us!  The only issue is...I have no idea how the nuts and bolts of seller-financing actually works.

I understand the basic concept of seller-financing, so my question isn't like "WHAT IS SELLER FINANCING?"  I mean when it comes to a commercial property, what is the step-by-step of how seller-financing actually works?  Examples of things I don't know include: who do I talk to about payments for the loan - escrow must be involved, right?   Is there any sort of closing - we must need to record something somewhere?  How are the taxes rolled into the sale?  You see how much of a neophyte I am when it comes to this?  Basically, I don't even know what I don't know.

Imagine that I'm talking with the Seller and he says "Ok, great, let's do this 'seller-financing' you're talking about at 10% down and 4% interest.  Now, how do we set this up?"

How do I answer his question?

Anyone with prior experience doing a seller-financing deal (MHP or commercial or really anything), please help!

Thanks!

[Ken Rishel]

Seller financing has become considerably more complex since the emergence of the SAFE Act and later followed by the passage of the Dodd-Frank Act. What was once fairly simple and more focused on the process is now very complex and expensive because of all the new laws even the smallest would be seller financier is now subject to.

The issues are even more complex because the financing of manufactured homes has many rules that are different than those that apply to mortgage lenders. As a result there are perhaps five law firms in the entire United States I would consider qualified and experienced to advise a seller financier and none of them are inexpensive.

Unless you are planning on developing an ongoing lending operation that originates a minimum of ten loans a month, seller finance is not a viable solution. There are some other options for smaller operators. If you want further input, feel free to email me.