because maybe Louisiana law is a little bit different. I would make a marketing suggestion to you, if the law allows it. There are a couple of statements in your posting that would be cleared up by a slight change in your marketing.
“I’m not about to start handling over titles.” My suggestion would be that you should hand over the title. If you have that “Act of Immobiloization” available to you, use that as a selling point! In the process of the sale, state your selling price — and make sure your down payment goes in your pocket.
Tell the new “owners” that the total required money is your down payment plus any taxes and registration fees AND TITLE FEES. Now when the sale is concluded, you get a new title for the MH in THEIR name with you as the secured leinholder. Tell the new owners that you will hold the title in a secure place until the loan is satisfied. (Once you have the title in their name, give them a copy of it for their “feelgood security.”
In the process of the “paperwork,” have them sign a quitclaim deed back to you. What will this accomplish?
It shows they are the owners (which releases you from a tremendous amount of liability!) You are listed as the secured leinholder (which protects your economic interests.) If they “disappear” without paying, you have the signed quitclaim deed vesting ownership in the MH back to you. When you resell the MH to the next couple, you make the change in ownership to the new couple at the same time as you clear the title.
I am a mobile home dealer in Louisiana. I do a decent business in used mobile homes on a small lot, but I have extremely high traffic and referrals. Unfortunately, I have to turn away many good “payment” buyers because they don’t have the “A or B” type credit that is required by many lenders today. As you can see I have a huge opportunity staring me in the face- so let’s cut to the chase.
My question is about taxes. Being a dealer, I don’t have to pay taxes when I buy a house, but I am required to submit a tax report every month to the state on who I have sold to and there method of tax payment. I want to ‘owner finance’ these homes on location, but I would rather be putting their down payments in my pocket instead of paying approximately the same amount to the state. There is a vote on the house floor right now to eliminate this, but for now we still have to pay those taxes. Is there any way that I can get around this? I just hate the idea of financing in taxes on a note. I know that I could take their down payment money and pay their taxes without any money out of my pocket and still make good money on the notes, but that is not nearly as lucrative as this could be. We do have what is called an “Act of Immobilization” in Louisiana, which is kind of like a homestead exemption for a mobile home, but the only way that the customer can use this method is if they hold the title-- and I’m not about to start handing over titles. The only other alternative that I can see is to “rent to own” these houses which is another thing that I’m not crazy about. My main objective ,as you can see, is to put money in my pocket now ;as well as, over a period of time. I do not know where you are from or if these laws apply to you in your area, but if you have any advice or suggestions I sure would appreciate it.
I wish I knew a legal way to avoid paying taxes, but unfortunately I don’t. Paying taxes on money you haven’t collected, and in some cases, may never collected, sends my blood way up, but it’s part of doing business. Maybe somebody can shed some light on how to do this. Since a dealer can’t benefit from an installment sale method, all taxes are due in the year of sale.
Doing a “rent to own” or L/O might be the next best thing, but I’m like you?I don’t want tenants. But here’s what I did with some of my houses when I was in the rental business. I put a tenant in on a L/O and made them responsible for all maintenance and repairs. If they couldn’t afford any needed repairs during the L/O period, then of course I would be obligated as a landlord to make the repairs. But I structured my L/O agreement so that any money I spent on the house during the L/O period would be added to the purchase price.
This cut out most of the trouble calls, which was really what my goal was all along. So I didn’t really care whether they excised the option, or not, I just didn’t want tenants calling me about a problem. Their payments was structured so that I was compensated for insurance and taxes.
There are many ways to structure a L/O or “rent to own” and this worked very well for me.