Posted by Dr. Craig Whisler CA NV on September 06, 2003 at 21:40:17:
…arrange hard money loans for your downstream buyer. You should be able to find one in the yellow pages under loan brokers. A broker is slightly different from a regular lender in that he deals with dozens of lenders and can match you up with a lender who will make the kind of loan you seek. He generally knows a lot of private investors who are willing to take on a little more risk in exchange for more interest. A hard money broker is a little like an insurance broker who sells different types of specialized insurance policies from many different insurance companies. They try to find the insurance company or lender who is best suited to your particular needs. You will probably only get a short loan of between 3 and 5 years but that should be long enough to get your place sold. You should expect to pay much higher points and interest and be restricted to about a 65%-70% loan to value ratio, BUT, such brokers can usually arrange for a loan of the type of transaction that you seek. Another advantage of hard money loans is that usually No credit is necessary but your buyer will likely need about 30%-35% down if he is to to cash you out. In the alternative, you could carry back a note for the amount that exceeds the combination of the broker’s loan and your buyer’s downpayment. You may have to accept a very low downstroke compared to when you are selling on a conventional single family house because of the lower LTVs of hard money brokers and the fact that it isn’t common to be able to get as large a downpayment with mobiles as you can with a sfh. Mobile buyers are generally buying mobiles because they have less cash, less income, and poorer credit. This usually translates to a lower downpayment for you. You can sometimes find someone with a larger downpayument. It will likely be someone who is selling their larger single family house and retiring. A real estate broker may be helpful if you are trying to find a buyer with a large downpayment. They often have someone with more downpayment money who just can’t quite qualify for a house, that they may be able to move into a mobile on private land, especially if it is set up on a low profile foundation and is otherwise a nice home.
If you care to go to the time and expense of putting a permanent foundation under your mobile home, you may be able to get conventional financing. This may be preferable if you have the time and patience, and seriously want to cash out completely upon resale. If you want to go this route, I recommend that you consult with your prospective lender IN ADVANCE to see if they will finance the year and make of mobile that you have, and well as to determine what their foundation specifications and requirements are. With such financing and a small downpayment you should be able to cash out. One drawback to consider is that with such conventional loans your buyer will have to be able to qualify, creditwise, for the loan. With hard money, no qualifying is the norm. Another advantage of a conventional loan is that much lower payments are required as you can generally get 15-30 year loans.
I would recommend you read all of the mobile home investing books available on this website as well as any others you can find. A few hundred dollars invested in mobile home investment books should result in many thousands of dollars of profits for you over time.