Taking over payments? - Posted by mike

Posted by mike on February 02, 2001 at 10:41:01:

Will look into that.

Taking over payments? - Posted by mike

Posted by mike on February 01, 2001 at 13:54:53:

Elderly lady has a 95’ mobile home. 14 X 80, Clean. Nice. Nice park. Near a huge lake. Lot rent is $250 per month. Her financing is about the same for the Home. (another $250 to the finance co’.)

All she wants is for someone to take over the payments, no money down. She just wants out. Problem is, the remaining balance is like $14 K.

The lot rent, IMHO is kinda’ on the high side. I can’t see anyone paying that much (or more) for the property. (maybe I need to take blinders off)

On the other hand, if I took the property, and used it for “rental”, I would need over $500 per month to make it cash flow.

I suppose I could agree to take the property, rent it out, and just let the rentee’s pay the mortgage. In a about 5 more years, I might have a MH worth doing something with. (sales wise for good profit- Possibly)

My question is: Is there another deal here that I am missing? Another creative way to profit on this property, that I don’t know about yet?

BTW, Assume the home can stay on site, and the PM is ok with what I want to do.

Re: Taking over payments? - Posted by Ernest Tew

Posted by Ernest Tew on February 02, 2001 at 07:50:22:

If, after checking it out, you still think the home is a good buy at $14,000 you might consider entering into a net lease with the owner and an option to buy.

The lease payments could consist of making the loan payments and covering maintenance and any other costs. The option price could be $50 plus the loan balance, which would entitle you to any loan reduction.

You could then find a “buyer” and enter into a Net Lease with an option to buy. The down payment (option money consideration) could be a part of your cash flow. If you can get more per month than the loan payments and lot rent, you would have a positive cash flow. But, if you collect less or have a vacancy you would have a negative cash flow.

Your buyer’s option price might be based on a higher interest rate than what you would be paying, giving you a spread on the interest. Or, it could be that your receivable could run longer than your payable, resulting in a build-up in equity.

This approach has worked well for us when we had residents in our park that were moving and we wanted to keep the home in the park.

If you decide to proceed and need the appropriate forms, please send me an e-mail and I will forward them to you.