Mobile Home Note/ Paper Question - Posted by Clint

Posted by George-WA on October 26, 2003 at 14:43:54:

You do not have a note for (effectively $25,200). All you have is a note for $8,400. The interest rate is 40.16%, if all of your numbers are correct. If this note was in the state of Washington, I would consider paying you $8400 for this note, you would make $1400 almost instantly and then you could go on to the next deal. With recourse, of course!!!

Mobile Home Note/ Paper Question - Posted by Clint

Posted by Clint on October 26, 2003 at 13:32:50:

Ok,

New to this. Here is my question. A freind (and investor) wants to sell me his mobile/ note.

His cost to me: 7000.00

He has a note with current lesee for $8400

The terms:

THe lesee pays $610 per month. Of that $300 per month is for the mobile. $310 is lot rent. For the Next 84 Months (7 years)

Of the $300 the lessee/purchaser only 100 goes to principal. The rest is interest!

That is roughly 40% interest annually!!!

Could I take the note which effectively is $25200, and sell that? What should I expect from a 40% note.

By the way she has been renting/leasing for the last 40 months… no lates, etc.

Thanks,

Clint

Re: Mobile Home Note/ Paper Question - Posted by jeff

Posted by jeff on October 27, 2003 at 20:58:30:

hmmmm, well i almost agree with the one post about the lease/option. ALMOST. the term lesee and such kinda imply lease, but interest on a lease, not any that ive seen. i think it is a note with just some bad terminology.

but besides that, do i want any part of a note with 40% interest? not in my state i dont. can anybody say USURY? thats a great return, but it violates our usury laws, 19% is our limit here. i have heard some states dont have usury laws on mobile homes, i dont know. if this is one of those states, id have cash in that dudes hand before he got away. but where i live, i want no part of it, UNLESS, i was able to restructure the note with the borrower to give him maybe a discont on the total price but bring everything back within law. if you give this guy a big enough discount to make it worth his time to refinance the usury note with a better termed legal note, and still come out way ahead in the long run (maybe up the purchase price or lengthen the payments to still get your higher return rate, while still giving him a cheaper total pay-out or monthly rate discount) it would be worth my time.

Re: Mobile Home Note/ Paper Question - Posted by NoteDude

Posted by NoteDude on October 26, 2003 at 19:43:04:

“He has a note with current leasee for $8400. The leasee pays $610 per month. Of that $300 per month is for the mobile, $310 is lot rent, for the next 84 months. Of the $300 the leasee/purchaser only 100 goes to principal. The rest is interest!”

It’s not a note, it a lease/option contract.