The verbiage in my state changes to “Agreement for Delivery of Title to a Manufactured Home” but its the same principle (I have done this). Instead of acting as a lien holder and being listed on the title, you keep the title and sign it over when they fulfill their obligations under the contract. In my area, the people living there are responsible for the annual taxes (RE or personal property). Also, there is no sales tax collected here on the sale of mobiles so that’s not consideration either. I think there’s a little more security because the buyer knows they don’t get title until they pay it off. When buying, you should always try to get the title if possible but buying on a CD is ok if that’s the only way you can get it and you can have the title held by a third party.
Posted by Tim (OH) on November 18, 1998 at 12:08:54:
I have Lonnie’s books and have been seeking the deals described, but I ran across a motivated seller that has a MH about double the typical Lonnie Deal.
I can buy for $6,000 @ 9% for 48 months on a contract with $500 down for a payment of $136.87.
I can sell for $11,000 @ 12% for 48 months on a contract with $1,000 down for a payment of $289.67.
How is the title to the home handled on this type of deal?
If I buy on contract, doesn’t the sign over the title with a lien and I pay the sales tax?
How do I handle the transfer to MY buyer, with respect to transfer of title and sales tax?
This isn’t the typical Lonnie Deal, but I think there’s some money to be made here.
It would be simular to a car. They would hold a lean on the MH. The seller to you would probably be the 1st lein-holder and you would be the second lein holder… Check with the local court house…Just make it clear that you owe the 1st lean holder some money and you will do an indenture agreement or sinking fund where a portion of your buyers payments go toward paying off your lein… This is common with a lot of business transactions, especially vehicles…
Re: Mobile Home Land Contract? - Posted by John (KS)
Posted by John (KS) on November 19, 1998 at 15:23:02:
If you were to pay the owner $236 a month, you will have it paid off in 26 months. Which puts less in your pocket now, but more the last 22 months. In the long run you will save $501.90, just paying your loan off early. If my calcs are right, paying it off the way you suggested, you will make $6214.00 profit. Paying it off early your profit will be $7750.00, which is $1536.00 difference. Then after 26 months the title will be yours and in another 22 months you give it to your buyer.
I am not a mathmatician by trade, but I think this is right. I think. Anyway, check your numbers, less in your pocket today should equal more in the long run.
The seller keeps the title in this type of deal and signs it over to you when the contract is satisfied. Is the seller motivated enough to just “be the bank” for you with the same terms? That way you get the title (much more secure) then sell on contract to your buyer. If not, its still a good deal but I would push to have the title held by a third party (get a copy of it for your records and to show your buyer).
Re: Mobile Home Land Contract? - Posted by Dirk Roach
Posted by Dirk Roach on November 19, 1998 at 03:38:43:
Tim I agree with John on this one. Sounds right and on the surface looks like a good deal. What i would do is hold onto that $500 just incase you have to repo it back and that way you can cover your loan to the original seller. Throw the $500 in a little seperate account and don’t touch it till it is needed in this deal (hopefully it won’t be), at the end of your 48 months invest it then.
Just a thought,
Dirk
Re: Mobile Home Land Contract? - Posted by John(NH)
Posted by John(NH) on November 18, 1998 at 17:23:30:
Sell it on contract to your seller. He won’t get title
until it’s paid off in full, 48 months from now. Coincidentally, that’s when you’d get title from the
current seller. You just sign it over to your buyer at that point. Until then you have $500 profit up
front and ~$150 profit a month. Looks very good.
-John