Posted by Steve-WA on September 14, 2004 at 17:35:32:
good to see you again P
Lease options - Posted by jay
Posted by jay on September 13, 2004 at 12:31:31:
Is it feaseable to do lease options with mobile homes or taking over the payments for the seller and if so can i use the same documents as you would use if purchasing a home any help would be appreciated
Re: Lease options - Posted by Gregory (VA)
Posted by Gregory (VA) on September 14, 2004 at 08:37:20:
Sure, it’s feasible, but you wouldn’t catch me doing that, at least not with a MH set up in a park. Maybe someone with more experience can chime in on the subject and educate us both, but from my point of view I wouldn’t do it [lease option] because most trailers are upside down in their loan - and, unlike houses, which appreciate, trailers depreciate (like your car).
What this means is that trailers pretty much stay upside down until the day you pay it off. When you do lease option with a house, you can usually expect two forms of appreciation: forced and natural (my word). Forced appreciation is the paying down of the mortgage. Even if house prices remain stable, by paying the mortgage down you are creating equity. Natural appreciation is the rise in value of the house over time. Obviously, the better your option price on the house, the better you will do in the end.
If you were to lease option a current model trailer (something sold in the last 5-10 years), it is most likely upside down in the loan. More is owed then it is even worth. In this case you would only have the forced appreciation part. However, the house will probably lose more value over time, than you can pay off through the mortgage. Trailers are also difficult to get financing for, so it would be unlikely that your lease option buyer would be able to cash you out.
Probably the best trailer deals are to find motivated sellers of older homes (10+ years old) that have their mortgages paid off. You can get these home for a few thousand, do some minor fix up (if any) and can re-sell them on a note for a nice profit.
Lastly, before you consider doing a lease option in a park MH, make sure you talk to you PM and let her know what you would be planning on doing. Most parks don’t even allow rentals, so make sure yours does before you try to do a lease option deal.
Good luck. 
Re: Lease options - Posted by Ellen Brenn
Posted by Ellen Brenn on September 13, 2004 at 13:30:15:
Check out www.ErnestTew.com. All the forms you need are there, I believe.
Do good deals, not bad deals - Posted by Karl (Oh)
Posted by Karl (Oh) on September 14, 2004 at 10:54:43:
Greg,
Do you ever run across sellers who are asking full retail for their homes? I?m sure that most of the sellers in your area are demanding more cash than you?re willing to pay. Does that lead you to the assumption that you can?t make money buying and selling mobile homes? Of course not. That?s ridiculous. There?s plenty of trailers for sale at terrific prices. You simply establish your buying guidelines, and only work with motivated sellers. You wouldn?t buy a trailer just because it?s for sale. You would only do the deals that make sense.
Now check out what you wrote in your post about lease/options. You say that you won?t do them because most sellers are upside down on their loan. You wrote several paragraphs on the pitfalls of taking over a loan that?s upside down. I agree completely. Don?t do bad deals. Just like Lonnie Deals, you establish your buying guidelines, and only work with motivated sellers when looking at lease/options.
I only consider taking over a loan if there?s at least 50% equity in the home. I want to be able to lease/option out the home for at least twice the loan balance. So that means working with homes that are probably 10 years old or older. These sellers have paid off more of their loan than the seller of a newer home. If their loan balance is low enough, I?ll offer to simply take over their payments. If they?re motivated, they?ll eventually agree.
If you do them right, lease/option deals can be terrific no money down deals. If course, just like anything, if you do them wrong…
Karl Kleiner
butbutbut - Posted by Steve-WA
Posted by Steve-WA on September 14, 2004 at 14:16:53:
simply take over payments . . . like sub2? What contracts? What’s your security? Or does the lender allow the assumpion?
I want to talk to you in Atlanta about this . . . I’ll buy.
Re: butbutbut - Posted by Lyal
Posted by Lyal on September 14, 2004 at 19:29:25:
>What contracts?
Whatever you usually use.
>What’s your security?
A home that’s worth twice what the loan balance is.
>Or does the lender allow the assumpion?
Not something you advertise to them. Believe me with all the homes they have coming back, they just want the payments.
All the best, Lyal
Then I want to pick Steve’s brain - Posted by Philip
Posted by Philip on September 14, 2004 at 17:23:30:
Because this is a new “corner”.
Philip