newbie note and terms questions..... - Posted by Mark

Posted by Joe C. on April 23, 2001 at 14:58:27:

Spend a few bucks on one of Lonnie’s books, Deals on Wheels first. I’m sure that it give you some understanding and a clearer picture of how you should proceed. It won’t give the answers to your situation directly, but will stimulate your thinking so you can take advantage of this situation.
Just my .02
Joe C.

newbie note and terms questions… - Posted by Mark

Posted by Mark on April 23, 2001 at 14:11:39:

Hello all…

I’m looking to try my first mobile home deals. My brother recently purchased a piece of property with 3 mobiles on it, none of which he’s keeping. They’re all in good shape, and in an area with a very high demand for them. The problem is the financing. Most everyone who wants to buy them wants him to do owner financing (because they can’t qualify for the loan or the bank won’t do mobiles). But he’s getting ready to build his own home and needs the cash now.

Everyone can see, of course, that this is one of those “dream come true” scenarios.

What I’m wondering is what percentage of the loan amount am I likely to get if I sell notes I write on these? I know I’m not going to get rich, obviously, but I want to get as much out of this as I can to help my brother out and to put a few bucks (and some on-the-job experience) in my own pocket.

Also, being new, what types of terms are typical on used mobile deals? I’ve been reading up here at the web site, but I’m brand new at this (and maybe jumping in too quick). And I assume I’ll have an easier time selling the notes if I “season” them a bit by prepaying some interest when I sell to the note buyer.

Another possible snafu is that my brother bought the property from a bank in a foreclosure sale, so the mobiles are part of the note he took out to buy the place. So they won’t release the lien on each one until he pays them for each. Would it be better to find a note buyer BEFORE I make a deal with a mobile buyer? Sort of like “pre-approved” financing? Then do a simultaneous deal with the note buyer and mobile buyer?

Any info will be greatly appreciated!

Thanks in advance to anyone who can help.


Re: newbie note and terms questions… - Posted by David (OH)

Posted by David (OH) on April 23, 2001 at 15:42:05:

Mark: If you would sell w/ financing, what is the approximate price you would expect for the MH? My thought is to run an add in the paper for owner financing, make a list of potential buyers and the terms they might be willing to accept. You might find that someone will have the down payment enough to cover what your brother thought he might expect to get in the first place. If he is only expecting $3000 for each MH, maybe someone has that much of a down payment and is willing to sign a note in addition for $3000 more. Win/win.

I understand you want the max $ now, but in this situation you can decide if it would be beneficial to find a note buyer after the note is created. At any rate, your max price for the MH is probably with owner financing.


Re: newbie note and terms questions… - Posted by Tim (Atlanta)

Posted by Tim (Atlanta) on April 23, 2001 at 14:26:53:

I am not totally clear on one thing : Is your brother looking to sell the mobiles with the land, or just sell the mobile without the land, and the new owner has to move the mobile?

You see for note purposes, a mobile home with land is worth much more than a mobile home in a park. Many note buyers consider a mobile home with land comparable to a single family home. You would get much more for the note.

If you have to move the mobiles, where will you put them? Is there a park in your area that will take them?

As to the question of how much will I get for the notes, that all depends. There are some mobile note buyers, but most will not be buying the notes anywhere near face value. You could still make money here, though.

On the standard note terms, there really aren’t any. You just have to make the mobile affordable for the buyer. I would recommend that you get at least 10% down payment from your buyer as well. This will look better when you want to sell the note.

Just do some homework and get back to the group. Someone here will lead you in the right direction.

Re: newbie note and terms questions… - Posted by Mark

Posted by Mark on April 23, 2001 at 14:44:38:


First of all, thanks for the reply.

Yes, the homes will need to be moved. There are many parks in the area, not to mention there are NO zoning restrictions in the area, so mobiles are very widespread. It is a very rural area in the coal mining country of Eastern KY. Lots of folks down there actually own a small lot, but can only afford mobiles, and will occasionally trade up to better ones when they can. So there’s no problem with where to put them or finding buyers. If I had the cash, I would just buy them straight from my brother, find new buyers and hold the notes, but I’m in the same boat my brother is: all my cash is tied up building my own home.

Thanks again,