Seller financing on a leasehold?

[Account Closed]

Hey crew I’m looking at purchasing a mobile home as a rental property that would be under a leasehold contract, what would be some options that could improve my profit on something like this? I was thinking possibly seller financing at a lower rate if they would go for it, any feedback is appreciated. Thanks! 

[Chase Louderback]

Hi Daiken,

Just to make sure I'm clear, you would be purchasing the home and the land would be owned by someone else and leased to you, correct?  If that's the case and your end buyer wouldn't be buying the land either, then Seller financing with a decent down payment and a higher interest rate can be a great option.  For seller financed mobile home deals, you should be charging quite a bit more than what a lender would charge at a bank since generally the end buyer wouldn't be able to qualify for a loan on their own.

[Account Closed]

What are the numbers on the deal?  I own a few modular homes in alberta.  They make great rentals.  However, the land is owned not leased.  I see a lot more risk because you can't usually control your lot fees.  You also won't get any appreciation from the land.  

[Eliott Elias]

Don't buy a mobile home as a rental, do it if your plan is to sell it owner finance. 

[Chase Louderback]

If it's a solid double wide/mobile home in a good location, then I see no problems with using it as a rental (assuming you will be owning the land as well).  If you do not own the land, then I would suggest selling the home. As @Account Closed pointed out, if you don't own the land and have an uncontrollable amount for the lot rent, then it adds another layer of risk for a long term hold.

[Rachel H.]

@Account Closed As long as you have a good relationship with the landowner/management company, it can work. Just be sure you understand the rules and regulations of the land and having a mobile home leased on top of the land. The key is to have good relationships and continue to build rapport. It can definitely work! I've been in this niche for a while (since 2007). There are ups and downs like any business. Overall, it's been quite profitable. 

Feel free to DM with any questions. Hope that helps!