Tax Lien Purchase on Land With/Without Mobile Home ?

Question

Just bought my first tax lien last month in Colorado. It's on a lot (over 5000 square ft) with a mobile home in a mobile home community. However, the lien is secured only by the lot, not the MH . If I end up filing for a tax deed in 2 -3 years and owning the lot (valued at $180K), can I force the MH owner to sell it to me or move it within a short time period (10 days, 30 days, etc)?

If I get the land, ideally I'd like to be able to buy the MH at a steep discount. I hired someone in that local area to check out all the properties I bid on. The MH is occupied and is in a good location with a high demand for housing (Steamboat Springs , CO). Any input would be greatly appreciated!

Ronald Bourgeois · Answer

Wouldn't the lot be owned by the Mobile Home Park and not the Mobile Home Owner? Generally the Mobile Home Owner pays 'RENT' To the Mobile Home Park? I'm gonna move to Colorado if a 5000 square foot lot is valued at $180K. Are you sure this scenario is correct?

Bill S. · Answer

@Tricia O'Brien probably 99+% of all tax liens are redeemed. No need to fret the exit (since you already bought the lien) until it's there unless you are learning. Here is the link to the state statutes web site on lexisnexis. There is a special section of the statutes related to MH parks. I've not read it but you might want to dig in.

Tricia O'Brien · Answer

It turned out the lien was on the land only, not the mobile home and the land. The owner redeemed the lien after about one year with interest so I didn't get the chance to own the property. It was a good learning experience though!

JJ Conway · Answer

So @Tricia O'Brien how did it go and what's your current status?

Matthew Kreitzer · Answer

Personally, I would recommend consulting with a Real Estate attorney in Colorado for more information. Based on my initial review of the law, the mobile home may or may not be considered personalty. A licensed attorney will be able to review the deed of title to determine the status of the mobile home and any rights you may have for the removal there-of, or whether the obligation to permit the mobile home transferred with your Deed of Title. Please only listen to a licensed attorney in Colorado for information on your legal rights in this particular case.

Josh Carr · Answer

The "nice guy strategy" is always welcomed. That would be where you allow the tenants to stay and then collect rent from them. It is often appreciated because they will not have to move. Eventually if you take ownership to the land along with the MH you could offer a rent to own lease option. This is one solution to this situation.

Tricia O'Brien · Answer

Great to have input from a Colorado investor/landlord! I want to figure out a potential exit strategy now because if it's going to be a money pit, maybe I won't buy the subsequent taxes, just hold the lien I have now. If I do end up owning the land, I could offer to buy the MH from the owner and have the title transferred to me... and if he says "no" then give notice to vacate, do eviction etc. as you outlined above , correct?

Bill S. · Answer

@Tricia O'Brien if in three years you actually obtain ownership of the land, then you will have to evict the owner of the mobile home not the tenant of the mobile home. MH are personal property in Colorado, like a car. They are taxed separately from the land as well. The process is similar to a regular eviction but with longer time lines. Once you own the land then you have to give notice to vacate. If the owner doesn't move the MH then you file for eviction. I'm not sure what happens with the MH if they don't move it. Be aware the law recognizes the it takes longer than 30 days to move a MH so the eviction time is longer. You can review the state statues and get a better idea of the time line, after all you have 3 years to figure it out if the owner doesn't redeem before then.

Tricia O'Brien · Answer

Actually, I was off slightly...the assessors office says the actual value of the lot in 2015 is $170K. I think this is pretty accurate since the last time it sold (in 2010) it went for $150K. The MH itself is valued at only $10K ! This is a MH community where the lots are sold, not rented. However it is a planned unit development (PUD) so the owners pay monthly dues to an association, sort of like with a condo.

Tricia O'Brien · Answer

My research indicated the man who owns the lot also owns the mobile home. MH seems to be tenant occupied, not owner occupied, because the assessor's office lists the owner's address as a residential address different from the MH but in same city in Colorado. Also, this man also owns 4-5 condominiums in the same city as the MH. If I do the foreclosure in 3 years and it is still tenant occupied, what would be my best strategy re: possibly keeping existing tenants? If I, or someone representing me, met them and decided they are decent tenants, could they just sign a new rental agreement with me and we'd change the locks without any other legal action (like"quit the premises notification" etc). Any input would be greatly appreciated!