I, too, was wondering how the age of the mobile home factored into a Note deal. Thanks for sharing your perspective on it.
I’m holding a Note on a 1965 in Southern Calif. that is in good condition for the age. It’s in a Park on a rented lot. It seems most buyers, brokers, etc. who have contacted me about my Note have said they either don’t deal with MH’s “that old” or pass because no land is included as collateral.
I do have an offer at a 45% discount I’m reviewing right now. This is from someone in the general area where the Mobile Home is located, so the location seems to be as much of a factor, or moreso than the age of the home in this case.
It was my residence that I sold. I had lived in the Park for a number of years, so I felt comfortable with the Park’s assessment of the buyers, and I went by their credit check and approval since I was in the process of moving at the time. The Payors have been paying on the Note for over a year, so they have a good payment history on it.
It’s been nice to have that cash flow coming in each month. However, I am not in good health, so when I considered things from a future standpoint, I started thinking about my options as far as selling the Note.
Again, thanks for giving another perspective regarding the age factor. It’s very helpful to know.
Posted by maryellen on January 17, 2004 at 19:41:32:
Just wondering how the actual age of a MH factors in when it comes to selling a MH Note? Let’s say a person is holding a Note on a MH that’s a 1970, for example. If the home is considered to be in better condition than a lot of later model homes, due to upgrades and so on, how would this enter the equation?
Would the condition of the home be taken into account, or would a note buyer generally go strictly by the year? It would seem that an older home, that’s been well-kept over the years, would be more desirable than a newer model that hasn’t.
Age is almost irrelevant . . . - Posted by Dave Swett-CA
Posted by Dave Swett-CA on January 19, 2004 at 19:43:54:
to an investor. The money lender certainly wants to see the best condition MH and MHP for his money, but there is a lot of funny money in a MH deal and you will have to offer something else to minimize the risk.
If you are thinking of selling a note, the best technique to get my interest (other money lenders)is to guarantee the note with recourse. Of course, you must also have some assets (and offer a net worth sheet) to collateralize that recourse.
A couple other suggestions: get the best personal profile of the borrower that you can. These MH loans are really a personal loan with a so, so security and it would enhance the deal if you had a loan application type package on the person, credit report, copy of his pay stub, 1040 tax return.
Often a loan is put together based on the borrower being able to fog a mirror. So try hard to avoid this appearance.
Its value in your market rather than age that is important, since you will be financing the resale yourself. If an institutional lender were to do the refinancing then age and buyer’s credit etc. would be very important.
Buyers usually don’t know mobile home values very well, like they do car values. They just look at your mobile based on how nice it looks and decide if they are willing or not to pay your price to live there. They won’t have ANY IDEA what year it is until they ask you. You could offer a very clean 1976 and they generally wouldn’t know it from an 1986.
Most mobile home lenders won’t loan on older mobiles. That is GREAT for us. We have the older but clean mobile home niche all to ourselves. This is what serendipity is all about.