Compliance Compliance Compliance

[Ryan Lebsock]

I have recently researched Lonnie styled mobile home investing extensively.

Lonnie doesn't cover many of the issues which I have come across in any of his books.

All of these are issues are subject to the state of North Carolina, however I have seen very similar requirements in most states.

The issues are as follows:

The Safe Act: Taking a course and submitting an application to become a loan originator is a pain, however manageable. Not concerned with this.

Mobile Home Dealers License: $35,000 surety bond for your first site of business. $100 for the application. You are considered a dealer if you buy and sell more than 3 mobile homes in a 12 month period. Not only do you have to be licensed with the department of insurance, but you also have to be registered with the DMV who requires you to have a lot. Does this surety bond actually cost $35,000 to be laid aside?

Is there some sort of distinction that I am missing that separates us as investors from a dealer?

I find it hard to believe that all small time Lonnie dealers are staying compliant with all of this. Many of you whom I have talked with aren't even bothering to become compliant with the Safe Act under the pretense of mobile homes being "personal property" and not a mortgage. While common sense should dictate, it doesn't. An extension of credit on a "dwelling" which mobile homes are labeled as "dwellings" you must be licensed as a loan originator to be compliant if you are creating these notes.

I am not trying to be a buzz kill, nor am I commenting on how you run your business. I am simply asking how it’s possible to do the right thing, and still run a successful business. Are people simply staying under the radar and doing small private deals?

Your insight would be appreciated!