Over the past year, I’ve come across many mobile home and land properties on the MLS where the seller warrants that they do not have title to the mobile home and will not help the buyer obtain said title. Most of these sellers are banks that took properties back through foreclosure. Although they foreclosed on the land as well as the home in many cases, many banks are not willing to get the title to the home.
Assuming that this bank-owned seller was the listed lien holder on the title and somehow lost the title, all it would take is a quick trip to the DMV to get a duplicate title. Many buyers are afraid to buy a mobile home and land property without title to the mobile home, and the seller is left with a smaller buyer pool, thus reducing the price of the property.
Throw in a little time passing without offers, and you may have a motivated seller on your hands.
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Is it Worth the Risk?
You may be wondering: Is buying a discounted mobile home and land property without the title worth the risk?
Let’s explore some of the potential risks in more depth:
If the owner of the mobile home is not the land seller, the mobile homeowner could move the home.
I’ve personally fallen into this situation, where I had purchased a piece of land from a seller that happened to have an abandoned mobile home on the property. The seller claimed that nobody had been in the home for over a year. I quickly bought the property, and within a few weeks, the mobile homeowner had moved the home. I bought the property at a low enough price that I could still owner finance the land for a profit or move another home onto the property.
I chose to owner finance the land. However, I should have tried to contact the mobile homeowner before purchasing. I later found out that this owner had sold the home to an investor who then moved the home off the property. If I had offered the original mobile homeowner $500, I probably could have gotten the title. You should be able to find the mobile homeowner through your DMV or county tax records.
If you come across a bank-owned property with an abandoned mobile home on the land, be sure to check your Register of Deeds for the foreclosure documents and see if the mobile home is included. If the mobile home has been de-titled or is considered part of the real estate, then ignore this discussion, as the owner of the land is automatically the owner of the home as well.
You might not being able to insure the home.
Many insurance companies will allow you to “insure” a home, so long as you have the basic information of the home (make/model, VIN, year, etc.), but as soon as you try to make a claim, they’re going to ask to see the title. So, they’re willing to accept your premiums, but are not going to pay any claims until you have the title.
You could encounter legal issues.
Renting a mobile home that you don’t have title to could lead to legal issues with the mobile homeowner, such as trespassing, as well as issues with your tenants, who may be forced to leave and could look to sue as well. Everyone’s risk tolerance is different. Personally, I’m not going to deal with another situation where the mobile homeowner is different than the land seller unless I’m able to work out a deal with the mobile homeowner as well.
However, I’m willing to take the risk on a discounted bank-owned abandoned mobile home on land where the seller foreclosed on the land and home, but isn’t able/willing to provide a title. Knowing that there shouldn’t be a conflict to recover the title with the seller, I would immediately take steps to recover the title quickly to insure the home from catastrophic damage and to begin collecting rent. The best way to get the title is to go through the abandoned mobile home process.
The Abandoned Mobile Home Process
I’m going to discuss this process using South Carolina’s state laws. If you’re in another state, the process is probably going to differ slightly, so be sure to contact your local magistrate.
- Submit an abandoned mobile home report to the DMV. This costs about $15 and takes the DMV about a week or so. They’ll report the home abandoned, as well as let you know the owner of the home, so long as the home has been titled in that state.
- If the home wasn’t found in the state’s DMV records, you’ll have to contact other states’ DMVs to see if the home has been titled in their state. When I went through this process on a property, I had to contact 7 neighboring states and confirm that the home wasn’t titled in their systems. Most sent a simple email that stated the home was not titled in their state, a couple had an online VIN check, and one required a form to be mailed in.
- Send a certified letter to the last mobile home owner of record.
- Place a 30-day notice in the local newspaper to anybody claiming ownership of the home. This cost me about $40.
- Pay a $35 fee to the magistrate, sign and complete an affidavit for an abandoned mobile home, and show proof of the above steps. This will enter your home into the next available abandoned mobile home sale. These are typically held once a month.
- Attend the sale and make sure that you’re the top bidder. When I went through this process on a mobile home, nobody else bid on the home, and I was immediately awarded a bill of sale.
- Go to the DMV and show the bill of sale to finally get the title.
In all, you can probably expect to spend about $100 and 2-3 months to get title to the home.
Have you found or purchased a property that’s worth going through this process?
Let me know your experiences in the comments!