Offering seller financing on mobiles on land

Tax Liens & Mortgage Notes
5yFollow

Offering seller financing on mobiles on land

Patrick Sears
Midlothian, VA · Member since 2013 · 130 posts · 17 votes

Hello,

Had a couple of questions on the current MH seller financing market:

1)  With all of the subprime lenders that appear to be offering low-down financing on owner-occupy mobiles (especially on land) is there still a demand for offering seller financing on mobiles on land that I might want to fix up and offer to sell on terms?  Or should I forget about that business model and just get good at hooking up my buyers with these specialty lenders and cashing out immediately?

2)  If I am still able to create a steady flow of seller-carry paper for these deals, are there any note buyers interested in seasoned mobile home on land paper?

Thanks!

1Reply
19 views

9 Replies

Jump to latestLatest
  • Bob Malecki
    Investor · Kingston, WA · Member since 2008 · 1k+ posts · 1k+ votes
    5y

    I know a few active investors who are essentially flipping mobiles and carrying the paper back to owner occupied buyers. It's a good way to create cash flow for your portfolio and avoid being stuck as a landlord. Even though there may be some conventional financing available, realize that many lower middle and lower income people cannot qualify for a conventional loan in doing a creative seller back note will solve their problem and provide you cash flow.

    As long as you qualified your buyers and they have demonstrable steady income, I see no problem in being able to resell seasoned paper. Remember, there's a lot of self-directed ira money out there looking for yield, and many would be thrilled with a 6% coupon rate.

    0Reply
  • Marco Bario
    Specialist · Frederick, MD · Member since 2017 · 474 posts · 454 votes
    5y

    There's an investor and teacher in Southern California named Andy Teasley who's very active in this space. I don't have direct experience with his business, but he's endorsed by others I think highly of. Andy also sends "weekly what if" emails which are financial calculator word problems and are fun to work through. 

    I'm happy to share his info with you privately. 

    0Reply
  • Patrick Sears
    OP
    Midlothian, VA · Member since 2013 · 130 posts · 17 votes
    5y

    @Bob Malecki thanks for the reply!  Some of these lenders advertise FICO below 600 and 5% down, but I guess I can still offer it and they can either take my financing or I can get cashed out immediately.  Either way, not a bad scenario!  

    I plan on using an MLO (or taking the test myself) for these originations, and then sharing the risk by selling partials to get my money back out.

    P.S. I'm from Everett and have taken the Kingston ferry many a time.  Sister lives in Pt Townsend.  Beautiful area but getting crowded!

    @Marco Bario thanks, Marco!  I Googled Andy Teasley and have a podcast already queued up for tonight's drive home!

    1Reply
  • Sean Mcintire
    Phoenix, AZ · Member since 2018 · 103 posts · 18 votes
    5y

    @Patrick Sears 

    Hi, yes we buy MH with  land 

    "If I am still able to create a steady flow of seller-carry paper for these deals, are there any note buyers interested in seasoned mobile home on land paper?"

    I'm having trouble PMing people now .  Please let me know her eif you are interested in getting a free quote and I will find some way to get a hold of you.  

    Thanks.

    Sean McIntire

    0Reply
  • Leslie A.
    Real Estate Investor · Houston, TX · Member since 2010 · 499 posts · 206 votes
    5y

    @Patrick Sears

    Disclaimer: I’ve been inactive for several years and my advice is based on “old” experience.

    I would suggest you proceed with extreme caution. Make sure to do more research before jumping in.

    Creating notes on mobiles is lucrative. However, when I was active in mobile home notes, they had a very low value. They aren’t comparable to notes on real estate in value at all. The fact yours will be on land helps, though.

    0Reply
  • Blaine Alger
    Investor · Waco TX / Conroe, TX · Member since 2017 · 376 posts · 228 votes
    5y

    1)

    I think it really depends on what you are looking for. If you are wanting some consistent monthly income and want to avoid capital gains or bumping your income into a different tax bracket, then continue to owner finance them. I think no matter the lending environment, you will always find someone who would rather deal with an individual rather than a bank. If you want to just pull your cash out of the deal and move on to the next deal, then push your buyers to the lenders. I think you can implement a healthy mix of both exit strategies. 

    2)

    I have no input on this point but I just think it is really cool concept. Let me know if you get any good responses on this. 

    0Reply
  • Chris SeveneyBusiness Member
    Moderator
    Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes
    5y

    As many have mentioned, if you are looking to create them and hold the paper it would be far more lucrative than trying to sell it down the road. The value of the paper with a mobile on it will be a lot less than it would be with a real property.

    Reason the value is less is because a mobile is depreciating faster than a house would, the property value would be lower as well. So those are some of the items working against youo

    7e investments53 Reviews
    WebsiteView Page
    0Reply
  • Rachel H.
    San Antonio, TX · Member since 2009 · 3k+ posts · 1k+ votes
    5y

    @Patrick Sears It would depend on your goals. If you're willing to wait and don't need the cash, you can go the payment route and collect monthly payments. Though, you'll have to make sure you have the cash reserves just in case things don't work out and you have to fill the home again. 

    On the other hand, if you'd rather just cash out now and use it for something else and people are paying in cash for mobile homes in your area, you may want to go that route. Honestly, it can go both ways. It just depends on your goals and what you want to do. 

    Hope that helps. Good luck! 

    0Reply
  • Chris SeveneyBusiness Member
    Moderator
    Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes
    5y

    @Patrick Sears

    If you are interested in creating paper on this I am looking at a MHP right now and if your interested in financing it let me know.

    7e investments53 Reviews
    WebsiteView Page
    0Reply
Join the conversationCreate a free account to reply, vote on answers and follow this thread.
Log InJoin for Free