Note Evaluation

[George Frye]

I am researching a note I came across. AT first it seems like a pretty standard note. It is a Mobile home with the lot for sale for 45000. The Owner received $20,000 down and carried a note for $25000. The interest rate is 8% for 45 months. 2 months have been paid on time. However the payment schedule is kind of weird. They pay $500.00 8 months out of the year and $1000.00 4 months out of the year. So How should I go about evaluating this note so I can either decide if I am going to purchase this one or pass it off to another buyer. Please help.

[Doug Smith]

George, be careful on this one. In addition to a possible "cocktail napkin" note (make sure a GOOD real estate attorney reviews the docs before you commit to buy), Mobile Home deals are a different animal than SFRs. Is the tongue cut off of the Mobile Home and is it permanently affixed to the land? Titling is different with a MH deal. You may want to walk from the deal if you have any concerns. There are many notes out there for purchase. You mentioned a while back in a previous thread that you are new to buying notes and this is not a plain vanilla note. You may want to be careful and live to fight another day.