Wow, to think that asking about the NADA guide two months ago caused such a firestorm. What a long way we have come here!
THe NADA website does not list mh values. That’s because the NADA Manufactured Housing Appraisal Guide (it’s official name) is designed for the trade only. The info on their site is oriented for the general public.
The NADA guide is avalible at www.nadaguides.com. It’s about $150, with three annual updates. I won’t debate the merits of it, but suffice it to say many successful mh investors use it regularly. Also, if you try to sell a mh note to an institutional investor, they want to know the NADA value of the home secured by the note.
Posted by John Laine on March 06, 2000 at 22:17:09:
I’ve got a question and I’m trying to figure out the pros and cons, any insight would be very helpful.
I’ve done one “Lonnie” deal and it turned out very well. The only thing stopping me from jumping in is one concern. The MH I bought and sold is a 1972. In my area (AZ) no park can accept a MH older than 1976. I had a good relationship with the PM, and was assured if I ever had to reposses I would not have to move the home, but the park has been sold and new management says that if it is ever repossesed I will have to pull it. So if I ever get this home back, I can’t keep it where it is and I’ll have no place to move it, very bad thing. Now all is going well with the buyer and I don’t forsee a problem, but I would like to prevent something like this happeneing in the future.
So my question is this, what would be the pros and cons of putting my name on the park lease with the buyer? Would this eliminate the problem? Since I am on the lease, would the home be allowed to stay ? I was also thinking of collecting the mortgage payment and lot rent and paying the park myself, this way I know that all is well and on time.
I see lots of opportunities around here and I’m eager to jump in, but I need to find a way around this.
Finance it with Conseco (or any outside funding source.) If the home is repo’d, you are out of the picture with cash in hand. Let them worry about having to move it, etc.
Another obvious solution to me is to be careful to whom you sell. DOn’t just sell to anyone, in the excitement of getting a deal done. Be cautious and do your homework. It would seem to me that your chances of reposessing a home are much less.
Anyway, I am out of my deals at closing, so I’m not an expert on repossesing mh’s, nor do I ever want to be.
I personally don’t like putting my name on anything with someone else, especially one of these buyers. I am not sure it is worth it. I would not want to even open myself up to the possibility of being liable for my buyers breaking lot rent rules somehow and me getting zinged for having the deeper pockets. Just a thought, perhaps I am overly nervous.
Since the park has already said you can’t keep the home there if you repossess, I am not certain that they will approve your new buyer anyway. I am not sure if you would really be gaining anything by co-signing the lease. As the lien holder, you are likely to be held responsible for lot rent once you are notified by the park that the rent is delinquent. Here in VA, you are not legally responsible for back due rent, but let’s face it…the park is not going to let you repo the home and keep it in the park without someone paying the back lot rent. So they have you between a rock and a hard place here.
As for you collecting the lot rent and sending it in. Many investors do this so as to better monitor these deals. I have only done this on one deal, and only for 6 months at the PM’s request. This decision would be up to you.
You are fortunate that for now, you only have one home in harms way. Future buys will be homes of 1976 or better so you should not be placed in this predicament in the future.
Additionally, One of the park managers that I have been working with over the past week has told me that if the MH is vacant they can demand that the trailer be moved.
I don’t think you would gain anything by putting your name on the lease. Unless you plan on living in the trailer.
Yes. They finance as old as 1970, and have nationwide for years.
They will finance the lesser of either 145% of the BASE NADA value or 95% of the appraisal. However, mh appraisals tend to vary a great deal depending on who does them (more than stick-built.)
Now, here’s a little more info. Units from 1979-1970 are financed at 17.5%. Otherwise, the standard rate is 14.25% Also, add about 6-7 points into the loan for fees etc.
Any loan amounts over $10,000 are at a 15 year term, with less than $10,000 at either 8 or 10 years. THe buyer does have the option to do any loan at 8 years if they desire (they never do, go figure.)
My formula has been to get the buyer approved by the park first. I have found that if they qualify for the park, they’ll usually qualify for Conseco.
That’s the best rundown I can give. Call Justin Miller at 1-800-884-8424 #151 for more info. (DISCLAIMER I am not affiliated with Conseco in any way, nor do I get a “finder’s fee” for referring their products.)
Does NADA list book values of MHs? I looked at their web site and it did not have MH values. Sure would be nice if there was a way to find MH values easily. I have been studying the market (listings and sales that I can find out about), but don’t have a broader measure.