Do I need to use a Purchase & Sales agreement?

Question

Hello all I'm a property wholesaler in SC. that specializes in SFH. However I'm currently in the process of buying my first Mobile home and I don't have a clue as to how it should be done. I'm starting to see what people mean when they say that mobile home investing and conventional stick built home investing is definitely two horses of a different color.

My questions are:

1. Do I need to use a Purchase & Sales agreement? If not, where do I list the terms of the deal?

2. Do I need another form (assignment of contract) to assign the deal over to my end-buyer? Again If not, where do I list the terms of the deal?

3. How do I conduct a tile-search on a mobile home and where do I go to get it done? I was told the local DMV, is this true?

4. Roughly how much should I offer for a 2-bed, 2-bath, 1995 (66 x 14) FLEETWOOD mobile home that needs to be moved?

5. Condition: Roof leaks in a couple of places, floor around the commode in the master bath is week and sinking, Central HVAC system does not work, mold infestation as a result of the recent SC flood, and the house is full of junk as the seller was a hoarder.

Any information would be greatly appreciated!

Thank you all in advance for all of your valuable time and expertise!

John Fedro · Answer

Hi Reginald,

Thanks for commenting and reaching out with your questions. I'll be happy to answer questions where I can. I had to chuckle a bit at your statement that you are finally seeing that mobile homes and SFRs are two different types of real estate animals. With that said please see my thoughts below in bold.

1. Do I need to use a Purchase & Sales agreement? The answer to this question is, "it depends". If you're purchasing a mobile home in a pre-existing park than a purchase and sale agreement is not needed as the sale will take place in the next couple days most likely. If the mobile home is attached to real property than I would suggest you do have a purchase and sale agreement signed as this closing will typically take 15 days to 30 days to close, and you could also record this agreement in public record to cloud the title if needed. If not, where do I list the terms of the deal? Concerning a mobile home in a park, the terms of the deal will be listed in the paperwork you provide at closing. If you will be making the seller payments then this will likely be outlined on a promissory note of some kind. I hope this helps and makes sense. If you have any other questions regarding these topics never hesitate to reach out again.

2. Do I need another form (assignment of contract) to assign the deal over to my end-buyer? The answer to this question again is, "it depends". However in most cases you should absolutely have an assignment of contract. Please keep in mind that if the mobile home is in a mobile home park than the buyers and sellers can go around you in most cases and undercut you if they would like. Inside mobile home parks it is best to disclose that you will be making a profit to both the buyer and the seller... This is of course only my opinion.  Again If not, where do I list the terms of the deal? An assignment of contract and purchase and sale agreement will work just fine.

3. How do I conduct a tile-search on a mobile home and where do I go to get it done? If the mobile home is attached to real property then you will use your local real estate attorney, title agent, or escrow company to issue a title policy/insurance on the home and land. I was told the local DMV, is this true? This depends on the state that you are investing in. In South Carolina you may absolutely call or go down to the Department of Motor Vehicles with the subject property serial number or VIN. You may then ask the clerk if this property has any liens, back taxes, or additional owners you did not know of.

4. Roughly how much should I offer for a 2-bed, 2-bath, 1995 (66 x 14) FLEETWOOD mobile home that needs to be moved? As little as possible to get the deal close. I suggest that almost any mobile home you purchase that is located in a pre-existing park should recoup all of your money back within one year or less after reselling via payments. If your reselling this for all-cash then you should aim to double or triple your money selling it to an end user. Because it sounds like you are looking to wholesale a mobile home, it may be wise for you to contact local mobile home parks and mobile home buyers to see how much they will pay for a hypothetical "1995 two bedroom Fleetwood single wide". I hope this answer does not sound vague... I meant what I said earlier about purchasing the home for as minimal as possible. Depending on the seller's situation, what else is for sale in the park, the time of the year, what your buyers will pay for the home, repairs needed, the park approval process, the park manager, repairs, etc the price and terms you offer a seller will vary from home to home and seller to seller.

5. Condition: Roof leaks in a couple of places, floor around the commode in the master bath is week and sinking, Central HVAC system does not work, mold infestation as a result of the recent SC flood, and the house is full of junk as the seller was a hoarder. A mobile home in this condition sounds like it will scare away many potential buyers that are interested in this property. Additionally, it does not sound with the seller has the money to fix these repairs herself/himself. Depending on the area and sellers motivation you should be able to pick this home up for a relatively inexpensive price. With this said, overpaying for a mobile home AND over improving a mobile home are two big areas where newbie mobile home investors spend too much money. While I can't be too detailed in this comment reply, as I don't know enough information about the home or the seller, I do encourage you to continue asking questions and make sure you will be able to sell this property for a profit. I hope this all helps and makes sense. If you have any questions or concerns never hesitate to reach back out. Were all here to help you. Keep up the great work.

Talk soon, John Fedro

Reginald S. · Answer

Wow John you are a wealth of information! If you ever do a "mobile home investment" ebook I promise to be your first customer! Absolute great information guy! Thank you much! Hey do you have any educational "mobile home investing" resources that you can recommend?

Jeff B. · Answer

The whole concept of a contract is not the legal terms and out foxing someone, but it serves to document the agreement, clearly and in precise terms so that anyone can understand who said and agreed to what.