Posted by David Butler on March 22, 2006 at 14:07:14:
And you are right on here in large part. I hastily gave the best answer for working with real estate notes :-(, rather than the more appropriate ground you covered here (glad to say I rememberd to cover it in the Appendix of Tin Can Alley a bit though ;-)…).
I’ll use the time of night, and my ongoing recovery from heart surgery (reduced oxygen to the brain) as my primary excuse.
But as I mentioned previously, as is almost always the case, careful reading of the statutes usually reveals the exceptions - and that applies here too.
For some reason, you hopped over Sec. 520.02 (15) “Motor vehicle retail installment seller” or “seller” means a person engaged in the business of selling motor vehicles to retail buyers in retail installment transactions.
Applying that with in the context of the other definitions and discussion above, puts things back in proper perspective, and context. Too many folks make mistake of taking the law in vacuous parts, rather than in the full context of what makes regulations what they are (many state officials routinely do this too:-(…)
In any event, you are correct in that regularly purchasing “retail installment contracts” from “…persons ENGAGED IN THE BUSINESS OF selling motor vehicles to retail buyers in retail installment transactions. …” would limit you to only acting as a “finder” under the common law “finder’s exception” doctrine, when working with retail dealers (and possibly "Lonnie dealers too under certain circumstances) to buy that paper. Or, you could elect to obtain a license.
But two things - first, it is NOT clear that [all] mobile home notes are “retail installment contracts” as defined under full scope of the Statutes at Sec. 520 described above. Second, it IS clear, also by definition under Sec. 520 - that private sales, per se, are not covered.
Subsequently, if I purchase notes from private sellers, (NOT persons ENGAGED IN THE BUSINESS OF selling motor vehicles to retail buyers in retail installment transactions), I can go on about my business. And this is where a lot of the note investing (for your own account) starts out for smaller, and/or beginning investors. We also purchase notes from Park owners who aren’t regularly engaged in the business of retail sales transactions, but merely took back a home for delinqeunt space rent or abandonment, resold it and carried the paper. (Some park owners ARE engaged in the business of retail sales transactions, but less than 30% in my experience).
Hopefully that will clarify further and also help insure that nobody simply excludes themselves from taking advantage of what they CAN do - by not fully understanding what THAT is. And thanks Bob for forcing us to explain this better!
Best of success and Many Happy Returns to you and David!
David P. Butler