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I have a mobile home deal that I am trying to do an option on. The owner is motivated and is leaving the home in 3 days. I spoke with the park manager and told her what I was planning on doing but she said I couldn’t have a contract between me and the owner because I would have to get approved by the park. I guess the park manager thinks that I am purchasing the mobile home. All I am trying to do is get the seller to agree on a price($4500) and then flip the contract(option) to a new buyer for ($7k) who would get approved at the park. If anyone has any ideas on how to structure this please let me know on here or email me at [email protected]
Thanks
The park I used for my Lonnie Deal was the same way. They wouldn’t let me buy it without being approved. I went along with it, although I didn’t like it. I would think you could convince them that since you aren’t going to live there it’s not the same. But, you do have 3 days. Find a buyer FAST and you won’t have to worry about it.
Chris, it is very important to have a good relationship with the park manager but I find when I try to explain to them what I’m actually doing they don’t get it. They immediately assume you are buying a home to try and rent it out. In reality they really can’t prevent you from having a contract with the seller and or actually buying the home. They can prevent you from living in but not buying it. I usually tell the manager that I’m trying to help someone, usually a friend, get into their park and buy the home. I always reiterate multiple times that I understand that the buyer who is going to be living in the park must absolutely qualify with them before they can do so. For most park managers this is usually the most important position they have ever had and I find it very advantageous to stroke their ego as much as I can without being blatantly obvious. In structuring the transaction I find it easiest to be a principal in that I am buying a home at one price from the seller and reselling it at a higher price to the buyer. I find that many buyers and sellers at this price point are intimidated / confused by assignments of options and assignments of contracts but they do understand a simple purchase and sale contract. I often find the essence of the phrase I heard from Peter Fortunato very helpful to remember ?you can show different pictures of the transaction to different people but try not to show them the whole movie?.
Tim King
Hi Tim,
In this situation it looks like I have to do an option contract because I don’t have the money and don’t want to risk the money for a traditional buy and sell deal. Does that mean I get an assignment fee from the new buyer, is that how I get paid and how does that work? I have never done this before so this is all new to me. I am going to explain to the seller that it is my intention to sell the home to my buyer and that the new buyer will be approved by the park manager. The only thing I am afraid of is when the park manager sees my option contract between me and the seller she is going to get upset and tell me that I am not allowed to be on any contract like she told me over the phone unless I personally get approved by the park. So it just seems like a hard deal to do because the people that I am working with don’t seem to understand what I am doing like you said.
So here’s how I see doing this.
1. Get a option contract from the seller for $4k.
2. Show my potential buyers the home tell them they can have the home for a total of $6500.
3. Have the new buyer pay me an assignment fee for $2500 and then I assign the contract of $4k to them and they pay the seller $4k and move into the home.If anyone has done this before or has any advice that would be greatly appreciated.
Thanks,
ChrisChris
It is very unlikely that your buyer will have $6500 cash so you should explain to the seller that this is how you will need to structure the deal:
You get an option and marketing consulting agreement with the seller to market the home for $7500
explain to the seller that when you find the buyer, you will help the seller create a note to sell the mobile home with seller financing. You’ll need to get at least $500 of the down payment for your marketing consulting fee and you will instantly BUY THE NOTE so the seller will get the amount of money they need to move on and you get the “yield” you need to make the deal worth your time. ( You might add that you are taking all the risks that the buyer may default after a month or two so you need to get a discount on the face amount on the note)Let’s assume that you collect $1000 as a down payment. ( $500 to you and $500 to the seller)
But they want $4000 for the home so that leave $3500 that is owed them)So, you will buy the $6500 note from the seller for total of $3500 ( which you can borrow from your Dad or from a private lender)
Then you are just a NOTE BUYER and not a buyer so you don’t need to qualify at the park.
The seller just wants their money and they don’t care how they get it.
You’ll do all the leg work to find a buyer, create the note, etc.
Another advantage in doing it this way, is you have no capital gains taxes due on your profit and you completely avoided the SAFE act rules.
There is ALWAYS A WAY!
Chris,
I agree with Jackie 100%. You may be looking for months for that cash buyer (other than another investor). Create some “paper” (Lonnie Deal). If you need any help let me know. I have done dozens of these.
Don Wede
[email protected]
Cell 815-252-3808
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