Selling Mobile Homes with Owner Financing

6 Replies

The podcast with John Fedro really opened my eyes to the strategy of buying mobile homes and selling them with owner financing.

I just had some basic questions regarding this strategy and specifically buying the mobile home in a park/association setting:

-What is the typical term length and interest rate that is offered to a buyer buying a mobile home though owner financing?

-How much is typical for a down payment in these types of transactions?

-Once you sell the mobile home, if it is in a park the new owner pays the lot rent fee to the community, correct?

- If priced aggressively and if favorable financing terms are mobile homes relatively easy to sell? I just am thinking in terms of holding costs between the time you buy until you can sell.

Any help with answering any of these questions would be great. I am thinking after listening to John's podcast some may have similar questions.


@Micheal Nato

- The terms and lengths of the terms depends on the price, you do not want a 30 year term for a $5,000 sale. I suggest studying more about Seller Financing in general and then you can apply that to pretty much anything.

- Down payment depends on the amount you have into the deal. You can do a 10% 20%. What ever makes more sense. And you never want to limit your self early you always want to see how much the buyer has first.

- Every community is different you will have to see there regulations. for the most part that is optional you can role in together but on a seller finance deal theywill hold the title with a lien on so it is easy to just leave them the responsibilty to pay it and include a clause in your seller fi contract that obligates them to pay there lot rent and have the cpmmunity aware they need to contact you in the event they do not pay.

I have lived in CT for a while and never seen to many mobile homes/parks were do you usually see them?

Thanks for the response @Manny Cirino .

I was thinking no term longer than 7-8 years, but again this is something new I am looking into.

As John said in his podcast the goal is really to get all the money you put in back in 10 months max. That is the part about the strategy I like the most.

I do lease to owns on mobiles and I ask for $500 down and then my monthly payment for 2, 3, or 4 years depending on how much I bought the mobile for and how much I put into it.

I charge 10% interest. Lot rent is included in the monthly rent because you do not want them to not pay the lot rent and then you don't even know that they didn't pay it and they get evicted plus you get evicted. So always pay the lot rent for the lease to own term. They will pay the lot rent when the contract is over and that is when you sign the title over to them.

They are super easy to sell and you will get 50 calls.

Remember they own the mobile so you are not liable for any repairs. However, if there is a repair and they cannot afford it, I will pay for it and they can pay me back. You don't want your mobile to fall into disrepair during the lease to own period.

@La Nae Duchesneau Thank you for chiming in.

I guess what I am confused about is this. So you set up a lease to own for lets just say 2 years.

In a normal lease to own it is done in lieu of the tenant finding financing, so would you then finance them once the 2 year lease to own term is up?

If so, how much more would you require down and how long is that term typically for?

Thanks again for the info, your last post really helped me clarify some things.

I do not understand what you are asking. After the 2 years is up, they own the mobile. At the point they have paid for it in full.

For example, lets say you buy a mobile for $5000. Lets say you want to make $3000. So you want $8000 total. They put $500 down and finance the $7500. $7500 at 10% interest for is $347 a month for 2 years (24 months). Now you have to add your lot rent (you should pay this during the lease to own). Say lot rent is $310. So your deal is this, $500 down and $657 for 24 months. At the end of 24 months they own the mobile.

Join the Largest Real Estate Investing Community

Basic membership is free, forever.

By signing up, you indicate that you agree to the BiggerPockets Terms & Conditions.