Private Money Terms for Mobile Home Investing?

5 Replies

Hi guys, I wanted to see if I could get some input. I’ve got a few friends who may be willing to fund some mobile home deals I am looking at and I’m trying to see what some good repayment terms would be to use them as private money lenders? I am looking at mobile homes in parks I could buy for around $5k and sell for around $20k with owner financing for 5-10 years. Total cash flow per unit after lot rent would be $250-$450 per month plus maybe $1000-$3000 down payment that could be split. What could be some good repayment terms I could offer them that would be mutually beneficial? Thanks for the input!

@Taylor Tully It will depend on each private lender. Everyone has a benchmark on what they want to get. The best thing to do is ask. But have a figure in mind. Know the market. I knew one mobile home investor who used the same private lender for over 40 deals. He made a small amount on the spread which he reinvested back into the business. The lender was paid 10% on his money. The investor got to keep the move-in fee when residents move in. Since the investor made his payments on his time on every deal, the private money lender kept funding his deals. A win-win situation for both. Hope this helps! 

Most guys start with 7 to 10% and I would suggest keeping the arrangement with the investor as simple as possible.  I would not split the down payments you collect from the buyers but would offer a steady return and a lien position on the title for security!

Thanks for the reply’s!

Are you saying these get paid back by amortization, or by interest only payments for a term?

I know I can give a first lien to the lender, then I hold a second lien with the end buyer.

When is the lender typically paid out and done?


@Taylor Tully - since it is private you can negotiate whatever terms are acceptable to your private lender.  

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