Like most things in RE its all about what you can negotiate. I let the their circumstances dictate the deal when I am selling. I ask questions.
How much money can you beg, borrow, or steal for a down payment? remeber this is your chance to be a home owner without qualifying with a bank.
What can you afford per month?
How is your credit, good, bad, or ugly? (this answer has a lot to do with how ugly my credit terms will be.
Also I will suggest that market price isnt all that relevant when you sell on terms. You are the only hope these people have of buying a house. What matters is the payment. Many of them wont even bother to ask how the payments are applied, until you start to explain it.
I hope that helps
David, you buying a home or want in the business, either way, you're about 2 years past finding out selling, rent-to-own as a buyer or seller. Check posts here on the SAFE Act and Dodd-Frank, @Ken Rishel is the MH guy here. I suggest you not even go there, in your area. Lots of houses you can get into using other means I'd bet. :)
There are many "land mines" in straight rentals of manufactured homes in land lease communities, but the "land mines" of a RTO program are far greater. RTO is a disguised credit transaction subject to all of the rules and compliance issues that purchase money lending are subject to, including the need for a state issued licensed entity the MLO works for. In some states, this is impossible to do because the state has not established a regulated license to handle RTO for residences which you must have in order to legally employ and utilize a MLO*. Anyone so engaged has created a ticking time bomb for themselves.
( * Since trailers- mobile homes- manufactured homes are, in fact, residences, the sale or finance of them are subject to compliance with a whole range of federal laws, including the SAFE Act.)
That said, there are methods to handle this that are both legal and workable to handle the extension of credit for operators of all sizes that will vary from state to state as state laws also affect what is legal and what is not.
A couple of add on comments:
- Louisiana has far different laws that any other state because their basis of law is the Napoleonic Code rather than English Law. Be very careful of advice on what you can and cannot do on any internet website because the law is so different. In addition to the law firms Rishel Consulting Group retains for federal regulations, we have a totally separate law firm we use in Louisiana for the loan portfolios we are involved in there.
- $5,000-$10,000 is not a expensive home, even in Louisiana. The average dollar amount of the beginning face value of the loan portfolios we are involved in there is about $42,876, with some chattel loans over $100,000. 5-10 K loans have their own unique sets of problems regarding maximum interest charges. (And yes you have to disclose actual APR on RTOs even in states where they can be legally done.)
And don't bet on any experts making podcasts or Youtube videos :)
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