Second lien-holder on MH? - Posted by David (OH)

Posted by Tim (Atlanta) on June 07, 2001 at 09:43:49:

Normally the banks won’t deal with the buyers of our mobile homes because of credit. If the buyers could qualify, we would be happy to cash out of these deals, and move on to more mobile homes. This happens on occasion, but just not very often.

A couple of things to consider instead : You could go to your local bank and hypothecate the notes that you have on the mobiles. This pledges the notes to the bank, and you can get some cash. Usually at a pretty good rate. You will need to deal with your small local bank. The big guys don’t want to deal with mobile home paper at all. You get to keep the notes, the bank is basically lending you money based on the value of the notes.

Another idea that you already thought of is partials. These are normally sold to the note investing community, and the rates are much higher than hypothecating. But you can do these deals quicker. There are note buyers available that would purchase your partial. Some of them frequent this site. You can use the cash to go on to the next deal. Yes, you will give up some of your profits. But it does keep your business going with ready cash.


Second lien-holder on MH? - Posted by David (OH)

Posted by David (OH) on June 06, 2001 at 20:42:45:

Has anyone ever considered taking a “second position” on a mobile home? Here was the thought. If we sold a MH, say for $6k, and allowed a bank to loan the buyers say $2k and we took a note (in second position) for $4k, this might possibly help cash flow as far as replenishing our money into the MH. Would a bank be more willing to loan on a low LTV % as they are in stick built houses? It does sound risky because the bank would get the MH back in case of default and our interest would be gone, but we would know what the bank is owed by the buyer. We could use this info to buy the MH from the bank and then resell. Just wanted to know if the thought ever crossed anyone’s mind. Probably just easier to sell the partial. Any thoughts are appreciated.