Hi Dave,

Very good to hear from you. Glad to know that you are in Mississippi. You are definitely in a good area for this type of investing, in parks and on land. However the market certainly changes pretty quickly from one area to the other depending on what part of the state you are in. With regards to your question, I’m curious if you mean a cash buyer or a monthly payment type of buyer. Also, curious if this is in a rented park that someone else owns or on a piece of land that you own and will be renting out. Assuming that is a cash buyer in a mobile home park, I want to make sure that the buyer will approve with the park manager. Assuming that they do then I am good to go as long as the buyer really has the money to close. However if selling to a payment buyer I certainly do not want to see an eviction and I want to see valid proof of income for the last year with at least three times the monthly payment including the home payment and lot rent payment. You absolutely want to make sure you verify current and past landlords as well. The buyer should not be dodging your questions or making excuses as well. Ideally they do not have a victims mentality and blaming others as well. There are definitely many other things to consider and due diligence when selling on payments, however I hope this helps and points you in the right direction. Any follow-up questions never hesitate to reach out anytime.

Talk soon,
John

Hi Patricia,

Thank you for reaching out and connecting. First things first, great job looking at purchasing this mobile home in a community. I hope that you like the area and the community. With that said I’m curious how flexible the park owners/park managers are willing to be. Over the years this is happened a number of times, and only two times did it come back where the park owner decided to renegotiate the offer or simply pay us as a contractor for the work we did and not give us the title. That is definitely the very short version, however I would encourage you not to be trusting in the situation. For these situations this is exactly why the “lienholder” section of the title exists. For situations like this one. Granted the lean will only be for a couple of months, however I would rather the mobile home be in your name and the park be a lienholder if absolutely needed. However the fact that you are signing some type of an agreement stating that you will get everything done within a given time should be enough in my opinion. The park really is trying to stay in control for sure. Like I mentioned already, most of the time the park is on the up and up and will likely transfer over title at that time. However if you do move forward and trust the park, absolutely make sure that you see the title and that it is in the parks name. The park me be trying to sell you something that is not really theirs, or they are working through the process to obtain title but do not actually have it. Keep in mind that even without title, it is not a dealbreaker for the right price. However we definitely want to know all of our options and how and if clear title may be obtained. Lastly, you can check online to see what Google reviews the park has. Also if there is anyone else in the park you may speak to with regards to this title issues. If the park is planning on taking advantage of you, you will probably not be the first one. There will likely be a track record with other reviews of people saying similar things with title issues. I hope this helps and makes sense. If you do move forward make sure to get everything in writing and email if possible. Feel free to keep in touch moving forward. All the best.

Talk soon,
John

Hello Henry,

Thank you so much for reaching out and connecting. My apologies for the delay in this comment reply. I assume that by now you’ve probably move forward with this transaction one way or the other. It sounds as if the mobile home seller is likely an investor that has all of these mobile homes for some reason. I wonder what the homes look like and how long this investor has owned them. Or perhaps it is the park that is selling you six mobile homes, however in this case most parks are definitely against you wholesaling the mobile home from them.

Whenever I work with folks we go about things a little bit differently. We typically let the sellers know exactly how much we will be making, and the buyer does not know. However in true wholesaling you will get a purchase and sale agreement written up with the seller, this can be a cash deal or seller financing deal like you are doing. Then in typical wholesaling you will have an assignment fee signed by the buyer that acknowledges how much you are making. Without doing a double closing or open title and spending the money to give the seller, one of the parties (either the buyer or the seller) will typically need to know how much you are making. Because you are dealing with emotional people and personal property things can be a bit tricky sometimes. Especially if you have not done this before. It is difficult or impossible to cloud the title of a personal property mobile home in most states. This gives you even less protection from the seller or buyer going around you.

With all of that said, the process definitely depends on the investor doing the deal. Some mobile home investors may treat the wholesale process exactly the same as a single-family home. If you are selling to an investor or using a title company than that may work if the buyer is paying cash or owner financing. Keep in mind that if the buyer is using a bank then often times the bank will not pay wholesale fee unless you are a licensed broker or realtor in the state.

In this deal you definitely want to have a purchase and sale agreement for the six properties written up between you and the mobile home seller. However I’m curious if the seller wants to have a lien on the mobile home titles to protect their interests? I assume that they will. If they have a lien on the property and this means that you will likely not have a lien to protect your interest and that the title will remain with the lienholder until you have paid him or her in full.

The more I write the more I’m hoping that it comes across that the answer to this question is definitely, “it depends”. It depends on what the seller expects, how much money they want, how much money you have, who is paying lot rent in the meantime, the repairs of the property, local supply and demand, how much down and how much per month is expected both from the seller, and from you once you assign the property to someone else. Also, are you looking to arbitrage in the middle to make cash flow monthly, or do you just want to create a quick cash profit from a buyer? Will the buyer even have enough to pay your fee as well as the down payment fee to the seller?

Sorry I’m not able to give you a quick magic bullet type of answer, however I hope this makes some sense and points you in the right direction. Feel free to comment back with more specific answers to the questions above and if you have already signed paperwork and how things are going. Keep up the great work!