Posted by Marc Donovan on December 06, 2002 at 08:49:52:
Hi Ken,
Were you talking about me?
I show up at the dealer’s office with my buyer in tow. She handles all of the paperwork for a $200 fee. She also signs a listing agreement with me to make it formal.
There’s an even bigger problem you have not yet discovered. Its 7% sales tax. Florida has no income taxes, so sales taxes and tangible/intangible taxes pay for the government. So a typical buyer for a 10k home needs 1 month LR, one month security (often), 7% sales tax, $200 dealer fee, $50 transfer fee = $1750. If you wait for someone with 1750 plus 1000 down, you will be waiting a long time (while paying lot rent).
So instead, do a 2 year lease with a seperate option to buy exercisable in 24 months at the same price as if it were a straight amortized loan. Florida law requires a dealer for a “lease-purchase” transaction and my attorney says that applies only if you are providing rent credits toward the purchase. Since I am not giving away any ownership until the option is exercised, I don’t need to have a dealer, but I do it anyway since I pay $20. What the heck…
You will also have to pay to put the home in your name and pay the tax (7% of free is a very small amount), but another advantage is speed of eviction. I have an eviction attorney who gets them out in 20 days for a set fee of $400. Foreclosure of a home is easier than real estate, but its still a full court process lasting 60-90 days.
Some parks are hesitant about L/O and you will have to educate them about the benefits to them. Technically, you are liable for LR if the tenant does not pay. And if you get a bad apple, 20 days sure beats 90 days. Stress that these tenants have an owners mentality since they are responsible if the thing breaks and your option looks just like a mortgage to the buyer. Since the buyer has more cash, you can move more people into the vacant homes, much faster.
You will have to buy your own insurance. They can get a tenant policy, but I have not yet found an insurer who will give homeowners for a L/O contract. I did at one time, but she is gone now. I go with liability only and forget fire insurance.
You may have some problems trying to sell partials. Since there is no note, you will need to put the note buyer on title and assign the contract to him. Its a $40 fee to FL. I buy these contracts myself, so let me know if you want to sell some.