Mobile Home - Taking Over Payments

4 Replies

I have a lead on a MH in a park and all she wants is the last year of her finance agreement paid for, 2400, I think it's worth 8 to 9k.

Is there a way I can take over payments while still transferring title, I know this will vary based on state but I believe in Ohio they are sold like cars with a registered title. Am I making too much of this? Should I just pay cash out of pocket? 

@Nicholas Novak  What year is this mobile home?  What do you plan to do with it?  If you are going to use  it as a buy and hold I would first check with the park to make sure it is allowed.  

A few things need to be done before you consider buying it.  Obviously you need to look it over and make sure it is worth it.  But beyond that you need to call the park and verify that all lot rent is current.  You then need to call the county and check on the taxes.  Taxes here are paid a year in arrears.  Here in my state that means you would have to pay all of 2014 and then 2015 upon purchasing it.  Something to defiantly  consider as well.  They are done on title here as well just like a car.  Since they are titles like cars they don't allow you to buy and sell to a 3rd party without first transferring the title into your name.  Yes it can be done the other way but not to legal here in my state.

As for taking over the payments.  That might be a tougher situation.  I would think you would have to get qualified from the bank to be able to take over the payments or assume  the payments but that most likely isn't allowed by the lender but never hurts to check.  You would be better off borrowing on a Credit card or other bank loans to save on the interest maybe.  Worst case just buy it outright if it is a good deal.

I agree, taking over payments is a bit risky.  I would call up the company that has the note on the MH and ask what the Cash payoff price is.  After you get that number, offer them less and see if they will take it.  Sometimes they will.  Once you get them to agree on a price,  pay them while including a copy of your Bill of Sale and Settlement Sheet so they will know why you are paying off the note for the person on the title.  The finance company should then get a new Title with all liens removed from the front of the title and then will send it to the Owner of record. Once you see that the title is "clean" with no liens, you will be able to have the seller sign the title over to you.  

 Make sure that if the MH has a Swamp Cooler or Air Conditioning, that it stays with the MH and is listed on the Settlement page.  Even Appliances and Water Heaters tend to walk off when MH changes hands.  It might not even be the selllers but neighbors that look when someone moves out to take things.   Your area might not have this problem but many MH Parks have a lot of police activity in them, even the ones in B neighborhoods. 

If the MH has a note, it probably is less than 10 years old, but in my State those MH's are worth  over $35K. 

Also, before you buy it, you will have to be approved by the Park Manager even if you plan to flip it.  If you want to rent it out, you also will have to make sure that the Park allows rentals.   You will want to ask the Park Manager if the MH has any write ups or back rent owed on it.  Write ups, could be something as simple as clutter on the porch or yard, or something more hard to rectify like skirting in poor shape or other cosmetic issues.

 Sometimes the water and sewer is part of lot rent other times it is not.  Make sure no bills are past due as they are usually tied to the MH and not the person, thus you would have to pay them off before getting the utilities into your name.  Also check the taxes on the MH are paid.  Usually you can do that via the counties website.

 Take a box of donuts or treats into the Park Managers office on the second or third visit.  Sounds stupid, but if you get in good with the Manager or the office people, they will steer some buyers your way and they are the ones that approve your buyers to live in the Park.  Make sure you pick up several Park applications and find out their application fee, so you will have them for your open house or showings.  The Managers also might give you leads of other MH's coming up for sale.   Offer a "Pick your Neighbor" finders fee if one of the neighbors refer a buyer to you that gets approved by the Park AND closes on the MH.  That $50-100 can be the best form of advertising in some areas.

Good luck on your purchase, and please keep posting updates on how things progress.

Wow, thanks for the wealth of info, all I have had to go on was a few articles and the podcast with John fedro.  This really helps a ton, none of those included the nitty gritty details like what you guys provided. 

As for the MH, it is a 73 model, I have not seen it as of yet, just wanted to get some info before I proceed. I'm assuming the note is being held by another investor which is probably the park owner. It also looks like the park is flipping their own MH's. Does that pose a risk to me? Would they possible not allow me to operate inside their park if they see me as competition? 

Also my plan is to sell for payments, the park does not allow renters.

Since the MH is only worth 8 or 9, is it worth the headache? I could cash flow $200 a month for 5 years basically, do you typically look for a larger return on MH's? 

My Father had up to 18 MH private notes on his MH's at one time.  He got anywhere from $175 to $450 (those sitting on land) each month.   This was before the Dodd Frank act and his type of self finance would not be legal nowadays.

Here is a link to a thread of people that have financed MH deals themselves. 

http://www.biggerpockets.com/forums/30/topics/1660...

Contact them to find out how they are Dodd Frank Compliant. 

Here is a website that has MH's that are for sale in all areas of the U.S, but most are newer than 1990.  Look to see what your competition is selling in your area:

https://www.mhvillage.com/