Financing a small Mobile Home Park - Posted by Gillett

Posted by Gillett on April 25, 2006 at 14:20:54:

There is no exam to become a licensed Mobile Home Dealer in Texas. You do, however, have to attend the class given in Austin (it’s about 3 days and I think the cost was about $275.00). After the class, you get a certificate that says you have, in fact, attended the required class. After that, you pay an anual fee of about $250.00 and you have to be bonded for $10,000.00.

After that, you are in business. You will have to have an office for the Bond (a physical location in Texas whereby the Bond is applied) but if you bought a park, the office would be that location.

Learn everything you want about Texas Manufactured Housing law at
http://www.tdhca.state.tx.us/mh/industry-info.htm

Good luck,
Gillett

Financing a small Mobile Home Park - Posted by Gillett

Posted by Gillett on May 19, 2005 at 13:02:14:

I found a small park for sale and I want to purchase it. I can see that with a little work, this park can be very profitable. The park has a little over 20 lots and needs attention but has all the city utilities. My problem…it seems that banks don’t want to get involved because it relates to Mobile Homes. One bank I spoke with will loan 65% LTV but only on the land (and MAY even want all the improvements removed!). I can buy the park for about 180K but I’m new to the investing business and don’t have a lot of contacts or company history.

Anybody have any bright ideas? I would hate to loose this opportunity because I haven’t been creative enough.

The way it’s being offered now, owner wants $70K and will carry the rest or if I can get financing I can probably get it for a little less. I just don’t have $70K laying around. Any comments welcome!
Thanks,
Gillett

Re: Financing a small Mobile Home Park - Posted by Don Dion

Posted by Don Dion on May 19, 2005 at 14:34:49:

What state is it in?

Re: Financing a small Mobile Home Park - Posted by Gillett

Posted by Gillett on May 19, 2005 at 14:55:37:

Sorry for not providing a bit more information. This park is in Texas. It is located in a rural community outside of Dallas with a population of about 23 thousand people. About 45% of the population makes less than 35K annually. 33.8% are renters according to the demographic statistics that the city and county give.

This park has historically been used for rentors but could easliy be set up to sell homes to people on notes and have them pay lot rent indefinately. Either way, it will make good money. The current owners husband passed away and the park has fallen into disrepair, with most of the homes needing to be trashed.

I am new to investing but I don’t go in blind. I am about to get a retailers license from the state so I will be able to re-sale if I want and I will be bonded as well for 50K. I believe this is a fabulous opportunity. I would eventually like to purchase several of these types of parks as they come available.
Gillett

Re: Financing a small Mobile Home Park - Posted by JC

Posted by JC on April 15, 2006 at 15:52:16:

Gillett,

Any update on this?

I am also looking for my first small park in CA and maybe TX.

Re: Financing a small Mobile Home Park - Posted by Don Dion

Posted by Don Dion on May 19, 2005 at 15:17:55:

Now I can see why your having problems with the local banks. With MHP deals the lenders dont like to see the homes be older then around 1995 for the current deals. The defered maintence would also be an issue which they would do what is called a hold back for the funds needed to be held by the title company and paid out as the work is complete. This might be a good deal but not for someone with limited capital. The 65% ltv on the land is prob going to be your best bet here since the units will more then likely have substantial if not total depreciation on their value.

Re: Financing a small Mobile Home Park - Posted by Gillett

Posted by Gillett on April 15, 2006 at 21:01:40:

Turns out the lady that owned it was unrealistic about her price. I gave my offers for price and terms and that was the end of that. One of the offers was based on her holding the note with a cash down payment but she wanted too much cash down in my opinion based on the amount of work needed to get the park up to zoning regs.

Long story short, didn’t do the deal and never lost a moments sleep over it. That could have been a nice little park for us if everything had been a little different but I wasn’t going to buy it at any cost.

Gillett

Re: Financing a small Mobile Home Park - Posted by JC(CA)

Posted by JC(CA) on April 25, 2006 at 13:38:08:

Do you really need to have license to do Lonnie’s deal in Texas?

Maybe call her in 3 months. If it is sold yet, she might change her mind.

Continue looking…me too

Re: Financing a small Mobile Home Park - Posted by Gillett

Posted by Gillett on April 25, 2006 at 14:03:24:

You absolutely DO have to be licensed to sell mobile homes in Texas. It doesn’t matter if you are doing Lonnie deals or selling new homes. You can sell ONE home per 12 month period without a license but if you want to do more business than that you need to take the required class in Austin and jump through the hoops to get the license. I took the class. It would not be worth the fines to forgo the licensing requirements, all your profits on Lonnie Deals would end up going to the State Agency that will definately fine you.

Of course, you could choose to title skip and not get the titles (actually in Texas it’s called a SOL - Statement of Ownership and Location) put into your name, but that is against the law and you will eventually get into trouble. Not worth it.

If I ever get my own park, or find one that is really open to letting me do Lonnie deals (and doesn’t expect me to pay lot rents while I’m getting homes fixed up and sold for them, increasing their bottom line in the long run), I will get a dealers license and make some money. I sold a home Lonnie style and my wife also sold one in an ARC park. I won’t make that mistake again! The park manager seems to have a policy of harassment and I am one of the people that always does what I say I’m going to do and pay on time. She acted friendly toward me at first.

Long story short, the answer to your question is YES you do have to be licensed in Texas to sell more than one home. I am not an attorney but I absolutely recommend that you do your business legally in Texas.

Gillett

Re: Financing a small Mobile Home Park - Posted by JC

Posted by JC on April 25, 2006 at 14:09:51:

Hi Gillett,

Thank for valuable advise. Well this is kind of a challenge to me living in So CA and have a f/t job. I am actively looking in TX and other Southern states for my 1st park. No I don’t want to violate any law.

How much work is it to pass the exam for out-of-state, can I do it on-line?
Do GA, FL, AL have the same requirement? I guess they probably do to protect consumers.