How to seller finance mobile homes in mobile home park

[Shawn Rasmussen]

What would be the best way to seller finance mobile homes to current renters in a mobile home park? Let's assume a $1,000 down payment will also be paid on top of the numbers below.

Option 1:

$10,000 @ 12% APR for 48 months

$263/mo

$12,640 paid over 48 months

Option 2:

$12,640 @ 0% APR for 48 months

$263/mo

Either one might sound better depending on the person. Option 2 guarantees the full $12,640 is paid. I suppose option 1 could have an early payoff penalty equal to the remaining interest due. Any thoughts or better options?

The park I'm looking at has 43 park owned homes. Personally, I'd want that number to be 0.

$263/mo

[Jason Ray Richardson]

Option 2. I think "technically" you can't charge interest if you are not a bank. However you can charge a higher amount and divide that over how many months they will be paying you. Part of their rent is a credit that goes back to what they owe. It is also easier to keep up this way for you and the tenant because you don't have to keep up with amortization schedules or early payoffs.