Re: An Educational Challenge - Posted by DougO
Posted by DougO on April 26, 2000 at 10:31:30:
The first place to start no matter where you live is in your State Statutes, or “The Law” In New Mexico, there are several places one must be aware of. The Manufactured Housing Act is where we find out that if we engage of the sale of more than one MH in a 12 month period we are a dealer and must pay homage to the great state coffers and get a license. This is also the act that spells out everything we need in New Mexico regarding Dealers, Brokers, Salespersons, Installers, etc. There is also the Mobile Home Park Act, which governs Community Operations and sometimes the LandLord Tenant Act comes into play. NOW, even if one is dealing strictly as a principle, buying and selling for their own account, the state here says GET A LICENSE. Can one get away not doing it. Probably, if you are not doing much volume. But it is not in ones best interest. To get the license, you need to take a test, (cost $50) where you can show how well you memorize facts, figures and statistics. Then you provide 3 reference letters, a Bond(Cost $50 premium for a $5,000 Bond which is in the works to go up to $25,000 shortly), Certified Financials, proof of obtaining your State Tax ID and a State Police Background Check. you also fill out their application which states you must have a “physical” office location among many many other things, and then of course you get to pay the “fee”, currently $250. If you should happen to think you might sell houses for others, then you need a trust account as well. If you are doing business as a Corporation (not a sole proprietor) you also need to take the Sales Persons Test and get a Sales Persons License to work for the Corporate dealer, (another $50 test and annual fee) After you are checked out you should be ready to rock! Now you must think over a few things. 1. How do i get my inventory (Debt or Equity finance) 2. How do I protect that inventory (Probably need to call up the insurance agent) 3. How do I finance the sale of the inventory (Cash out or seller finance) It is generally agreed that in this case if we are selling inventory we own with owner finance, one does not need a loan company license, however, best to check on that where you live. In anycase, you best be aware of the truth in lending act, and your states usuary laws and make sure you comply. You will need to have some sort of purchase agreement to buy your inventory, and a method of promising to repay and secure any funds borrowed to obtain the inventory. You will need to have paperwork to sell the inventory, secure the collateral as well as the buyers promise to pay. At this point I would say that Title to MH in New Mexico is handled by the Motor Vehicle Division of the State Tax & Revenue Department, this is where we go to file change of ownership as well as lien info. Lets see…oh yes, there is probably a little matter of checking with your city or county to obtain their “blessing” to be in business and pay homage to their coffers by getting their license. Establish your mail location, phone & fax numbers, email & website, marketing plan, generate a database of all the parks, dealers and MH Brokers in the area, investors, and you should be ready to get out there and be in the MH Dealer Business.
Granted some of my comments here may be tongue in cheek, but most are as straight on as I know how to be. Sometimes I think the Gov. discourages folks from going into business, but not ME. I say fight on and you will be that much MORE ahead of the crowd.
I am returning from south of the border next week and can expand when i have more time if you have questions, but now she who must be obeyed calls and I must away to eat !