I have noticed that most folks on the forum here at BP are very concerned about not breaking the Fed laws that many people under-look state licensing requirements.
Below is a list of the requirements from state to state with regards to the number of mobile homes you buy and seller for profit per year without a MH retailers license. Verify your state below.
This does not apply for mobile homes attached to private land, this only applies for mobile homes on rented land and considered personal property.
An "0" in the second column indicates a state that asks you to obtain your mh retailers license before you buy and sell any mobile homes for profit. Homes that are considered your primary residence or secondary residences don't count.
An "A" in the second column indicates a state that does not have a cap on the number of mobile homes you may buy and sell for profit without a mh retailers license.
STATE: # PER YEAR W/OUT A MH RETAILER LICENCE:
New Hampshire 3
New York 4
North Carolina 3
North Dakota A
South Carolina 4
West Virginia 6
Over the past several years I have spent my time helping investors invest in mobile homes in almost all 50 states. What I have come to discover is that many of the most successful investors buy/sell their first 2-5 mobile homes in parks or on land before committing their time and energy to become licensed.
These investors make sure they like investing in MHs, verify it is fun, profitable, and sustainable, then get a license to profit from even more opportunities.
I hope this helps everyone clearly make a plan for your future in the MH cash-flow business.
**In an effort to keep this information current and correct please let us know if any state has since changed their requirements since posting.**
Thank you for the information, that is very good to know. What does it take to get a MH license though?
Thank you for the info. Very informative!
Thanks and happy to share the info we've collected.
@Kyle Dee the requirements change with every state. In Michigan however I can tell you the licenses lasts 3 years before you have to get it renewed. In some states you need to be bonded or have an office or have rehab experience or more. For more info about Michigan rules call the Michigan MH division number here and ask for Debbie 517-241-9317.
Great info. Thanks!
John, just a few points of clarification or corrections for licensing in Texas. The state of Texas will allow you to sell, exchange or lease purchase only one mobile home every twelve months. You can buy as many homes as you want and won't be subject to their licensing requirement.
The state doesn't make a distinction about whether or not this is done for profit. If you sell two homes in twelve months and lived in both of them and/or sold them for a loss, a license is still required.
The state does not make a distinction as to whether the home is in a park and considered personal property or on private land and considered real property.
If your name appears as the seller on the Statement of Location (title to those outside of Texas), a license is required.
Overall, a good list with helpful info. Just that the statements about what qualifies and what doesn't in those numbers is difficult to make broad statements that apply to every state. It's a great starting point that will let those who are interested begin additional research.
Awesome @Bill W. ! Thank you for the input and clarification.
It's funny that Mississippi, a state that might have one of the highest numbers of mobile homes, isn't on the list ha ha.
Did not consult further past the DMV, but in Virginia I was told from DMV it is 5 homes (or 6 cars I'm told).
To get a dealer's license in Virginia (I say dealer as you can choose retail, broker, etc - I chose "dealer") you need to contact Dept. of Housing and Community Development...I believe.
If anyone is interested in VA contact me and I'll pull the file directly and give direct contact information to the person in charge of handling at the VHCD.
Val Dufour you're right. Not sure why I choose not to list Mississippi. I will list in now and make it bold for people to find it easy in the comments MISSISSIPPI = 3 PER YEAR W/OUT A LIC.
@Sam Parkins you know when we call certain states we get conflicting issues from their reps (only 3 states Va, North Dakota, and Nebraska). We call and call but no matter who you speak with you get a few different answers (this goes to show the ineptitude of the MH division in these states to regulate laws or even know them for themselves). In cases like this I use the lowest number to be conservative. Thank you for the comment and if you do find out an answer that is 100% please let us know.
Thank for this!
From what I've read, the SAFE act will allow up to 5 per year in GA as an individual private party. So much confusion out there!
SAFE act excluded, you may transfer up to 5 titles FROM your name/business in a single year in Virginia before obtaining/needing a license.
This is directly from the DMV, and has only to do with title transferring. Excludes any other source requirements. As pointed out, there are many requirements. Last I checked in Virginia, I believe it was 3 properties allowed under the SAFE ACT before compliance issues arose.
@Sam Parkins You are the man out that way so I will concede that you may buy/sell 5 MOBILE HOMES IN VIRGINIA BEFORE YOU NEED TO GET YOUR MH LIC. Good point in mentioning the difference that the restrictions for negotiating/writing notes is 3 (per Safe Act) and the restrictions for state licensing is 5. These are different and it is good you made that point. Thanks.
@Josh McCullough you are correct in your 5 notes created/negotiated in GA with regards to the Safe Act, however you should have your MH retailers lic before you invest in even one home (per the state of GA's requirements). That is the case here in Tx too, you may create 5 notes per year (with certain restrictions) however may only invest in 1 MH before getting your mobile home retailers lic. Thanks for the comment!
So id I read this right, depending on the state, you are able to comply with the law/SAFE Act up to a certain number without having a mortgage license?
@Sabrina Laplante Many others (myself included) comply with the Safe Act and do not have a safe act MO license. Simply do not do anything to violate the Safe Act federally or per your state.
In my state of Tx I have spoken with many experts on financing and I know (and feel comfortable) where to draw the line on what I can and can not do.
Above is a pretty broad answer however without knowing what you're dong or how you're running your specific business I can't be too specific. Plus I am certainly not a professional or expert or giving legal advice. I would advise you to talk with 5 or 6 experts in your State on the subject, if you haven't already. If you did we would be curious what you have discovered?
I guess I wasn't as worried about it (SAFE Act) until I started seeing so many post from @Bill Gulley, regarding the fact that we should even go as far as discussing a deal when it involves owner financing as an investor, because that is disobeying the law. I have talked to several lawyers in several states and they all said that it is still so new that even the legislators who put this law into effect do not fully understand it yet so no one is 100% where to stand ion it at yet. Very confusing/frustrating. If we as small investors can make it a win/win situation for everyone, I think they should stay out of it, IMO! Thank you so very much for this list as well friend, hope things are going great out your way!!
Continue to worry Sabrina, these are only state requirements. If any state is found not to be in compliance, HUD makes the determination and it will go to the fed. intent of the law. I suggest you use a LMO or an attorney. MH dealers are pulling thier hair out and no one has a country wide acceptable way to do deals other than compliance with the Act. :)
I believe Kansas has a limit of 6, but the rules are very sketchy and nobody in the government seems to know exactly what they are. My company was told by a dealer licensing inspector that more than 6 homes required a dealers license, regardless of whether the homes were on a lot or in a park, and that having this license would make the exempt from personal property taxes. Once we attained the license and received a bill for personal property tax we were told that homes are only exempt if they were stored on a dealers lot. Does that mean that homes sold in parks are also exempt from the 6 home limit? I can't seem to talk to anyone at the State who knows. Many of them can't even figure out the difference between a mobile home and an RV. One thing is clear: The state of Kansas HATES mobile homes, and anyone associated with them.
Ok, so we are not even allowed to discuss details about the way owner financing works with a future buyer what so ever? The MLO handles everything? They use their own contracts? I'm still a bit confused....Thanks so much for the response!
FYI South Dakota is 3 or more in any 12 month period :)
Right on Aaron! Thanks for adding South Dakota to the list. I'm not sure why it wasn't included on there originally. Thanks again for contributing and helping the fellow South Dakodans.
The answers you are seeking are neither simple nor singular. We are doing a ten hour workshop on just the non-lending portions in Louisville, Kentucky the day before the Louisville Show with an expected attendance of 300, and it will take every bit of that day to get the job done. Here is some advice:
- If you are going to hire an attorney or a consultant to help you through the maze, make sure they are actually experts on federal regulatory law. There is far too much bad information being circulated, including from some state industry association executives.
- Read through some of the threads that have been up on this forum on the topic. There is much more involved than the SAFE Act even for people who are not lending but just selling homes.
- Do NOT listen to people that tell you, " it is still so new that even the legislators who put this law into effect do not fully understand it yet so no one is 100% where to stand ion it at yet". That is incorrect and dangerous information from someone who does not know what they are talking about. The very face of that statement proves up ignorance. The legislators do not need to understand what is going on in order for a law to be enforced - although it would be nice if they did understand the laws they are passing. Once a law is a law, everything is done by Rule, and in this case, the rules are written by the agencies that regulate them. Virtually all the rules related to what came out of the SAFE Act and/or Dodd-Frank have been finalized, some since last January.
- If you are going to sell homes and the strategy is to "fly under the radar" or to find some scheme to try to avoid doing what the law requires, remember this. You may go uncaught for a year, maybe even 10 years, but when you are caught, they will make you pay the price in fines, penalties, civil actions, and perhaps criminal actions. You are mortgaging your future to the point that you may welcome criminal action so you will at least have something to eat and a place to sleep.
Hey John - Thanks for starting this thread! Maybe it will keep growing with even more detail.
For example, the State of Illinois may not require a dealer's license for the first four homes, but it requires a similar license from the first home if you are going to rebuild a home.
The best advises you can get before you start buying or selling is set down with a lawyer not someone off the Internet that think they know and if someone of the Internet gave you bad advice, and you follow what they say do you think they will be in your corner if the feds come calling I doubt it. I remember when the OFAC law came around and everybody, including crack head Susan was telling people you will go to jail if you don't follow the law, and I don't know anyone that went to jail of was given a fine but yes the OFAC law is real and should be a follower