Lease to Own?

6 Replies

I am throwing around the idea of doing some MH investing. A quick question:

1. Can't rent out in local MH park, so can I lease to own?

What I have in mind is buying a MH for $2000 (Est) turn around and sell it to someone with monthly payments. At the end of a term they would own the MH outright.

that is not a lease option, that is a financed sale in the eyes of the regulatory agency's. A lease option would have the buyer rent the home for a certain number of years, and then purchase the home at the end of the term for something that would be considered a fair price. If the amount owed on the home is reduced at all with the monthly payments, it is a disguised financed sale.

@Brandon Cooper

You should read the Dodd Frank law as it applies to seller financing and make sure that you are not in violation, the penalties are steep.

And you should read Lonnie Scruggs 2 mobile home books, though they are dated and are pre-Dodd Frank.

And you should look at the stuff of John Fedro, who posts here.

What's the point in reading something you can't do? The concept of Lonnie deals is pretty well killed of and put in the grave with Dodd-Frank unless you use a mortgage originator and I'll guarantee you won't find one kissing the note on a 2K MH. Reading old guru books will not be an education.

I suggest you look at RE from another perspective, there are many ways to get into much better properties with little funding.

I understand the profit motive, getting 350 a month on a 2500 investment, but you need to factor in the penalties down the road, paying out 50 or 100K plus legal expenses. You can get into a 65K stick house and flip it making 5/8/10K rather quickly and legally that can be better financially. :)

Originally posted by @Rachel H. :
Here's a write-up @Sharon Vornholt did for the BP Blog on the subject:

Hope that helps!

Which is where you have a Realtor and a tax guy explaining financing law which is totally out of their area of expertise. They do a good job, but it's not totally correct.

So, again, read government sites, sites of law firms that are not selling RE stuff or that have other agendas. Ken Rischel is a finance compliance type, listen to his suggestions as well as others in regulatory and compliance in banking and finance.

I don't go to a dentist to have my back examined! But here, seems that anyone who can brush teeth can give advice on your back pain. Use some common sense. :)

Thank you everyone for the responses. Sounds like I may be barking up the wrong tree when it comes to MH investing. I must say I never considered MH until I saw a couple of youtube videos a MH guru put together. I figured it was too good to be true type deal.

After listening to a recent BP podcast I now know to distance myself/money from gurus.

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