Can we do this?

We are new investors, and have not done enough research on Mobile homes. Here’s the deal. A person that I do not know, or have even met, is looking for someone to put a mobile on his property and finance it back to him.

He’s got good mortgage and rental. I really need the cash flow. What are my rights if the home is on his land? I would finace it that way, due to out of pocket expense.

If he does not pay, can I reposses on someone elses land?

I would really appreciate help.

Thank you!

wouldn’t that be relative to your state’s statutes?

Sounds to me like you’d have rights to kick him out of the mobile home, as part of a l&t action.

In a weird way… if you make permanent improvements to his property, they might be classified as chattel.

At the end of your leasehold arrangement, typically these property improvements would go to the fee land owner.

This is a great spot for a good local RE atty.

Thank you for replying. I have some questions…=)

Could you tell me the following:

What is a l&t action?
What is chattel?

Thank you again,
Tanya

No problem… l&t = landlord tenant action…
Chattel = fixtures… once you affix something to a property, it becomes part of the property… chandeliers & ceiling fans are often used as examples of chattel… you can not take these improvements once they are affixed to the property (unless clearly disclosed).

Business implements are not chattel. The typical example used is the farmer with a cornfield (he can remove the corn) or a retail store owner with counter-tops and other improvements can be removed upon lease termination…

The mobile home I’m sure would fall under the business implements category… but it sounds like a funky arrangement.

You might find life a little easier just buying a few mobile home pads, and renting those out…

Thank you and you are right!

I’m not an attorney so I’m not going to address the legalities, etc. I do, however, want to address some of the practical aspects of this:

Keep in mind that there is a reason he is looking for a private party for this…

  1. Even if you could repossess the mobile home, they are very difficult to repossess, particularly double or triple wides, which in many areas are the only type allowed outside designated mobile home parks. The cost to tear down and move a doublewide in my area starts around $10,000.

  2. Since he owns the land, most finance companies that loan on mobiles will generally accept his land as the down payment and finance 100% of a mobile placed on his land…but of course, then the land is mortgaged also. The question is, why doesn’t he want to/or isnt able to do that type of loan?

  3. He might be able to get regular mobile home financing (such as is used to financing mobile homes in parks on rented/leased land. The interest rates start at about 11% and go up according to credit history. Again, the question is why doens’t he do that…or why can’t he?

This is a high risk investment. Make sure you research the laws in your area regarding repossession, etc. and if you decide to go ahead, make sure you get an interest rate that corresponds to the level of risk.

Good luck to you!

Christine

Thank you,

He has good mortgage and rental, bad credit, small down, he is willing to make high payments.

I think I’ll just drop that deal, and move on to the next=)