I have a possible 1st deal for a mobile home with land. A family member no longer wants to deal with
trying to rent it out. I want to purchase it then sell the MH with owner financing and rent the lot to the buyer. Is this still possible with todays finance laws? If it’s no longer possible Is renting and lease/option the only other alternatives? It’s located in Alabama 40min. from Birmingham. I can purchase for ~$15,000 because they are ready to be free of it. I was thinking of selling the MH for $8-10k with a note and lot rent of $200 initially. This or Ghetto SFH rentals as I’m looking for high Yields/cash flow to supplement my income. I would prefer not to be a landlord.
Why can’t the family member offer you vendor financing if you’re going to sell it with vendor financing? If it’s not a good idea for them, it’s certainly not a good idea for you. Don’t tie up your money like that unless you plan to sell it for cash in a short period of time. It’ll take you forever for you to become a real estate millionaire doing deals like that. Good luck finding bank financing on an old mobile home.
If you are referring to the Dodd Frank Act, that deals with mortgages and mortgage underwriting…if you are financing a mobile home with the title as security, that would be no different than offering financing terms when selling someone on a car or boat that you own.
Without the ‘real property’ there is no mortgage, only a promissory note and/or sales agreement with terms. This type of transaction can yield very high returns, especially in the smaller amounts. I, personally, buy mobile homes from around $1k to 8k, then double the price, get a down payment and give terms over 3 to 10 years at an average interest rate. When you subtract your down payment from your cost and plug that back into the equation, you end up with very high yields…in past couple of months I’ve done no less than 30% and as high as 70% on these small transactions…add the lot rent to the equation (if you own property as i do) it boosts your returns even higher!
Feel free to request my 27 page e-book for free through an email on this topic…also, you can find online Deals on Wheels by Lonnie Scruggs and Invest in Debt by Jimmy Napier…both excellent books to guide you in this type of investment.
These deals are grand in that you do not need to do any repairs as you are selling the home with terms/financing and just renting your dirt…they cannot hurt the dirt!!
This is far better yields than low cost housing rentals, but if you select the right cities, these low cost houses can produce a good yield as well.
Hope this helps.
Rob