Posted by lynette Murrell on October 05, 2001 at 12:16:48:
i would like to know about this option. However my MH manager stated it was not legal to lease option. How could this be true.
Owner Financing - Posted by Rich_Ga
Posted by Rich_Ga on January 01, 2001 at 20:16:25:
I purchased 11 mobile homes for an older gentleman who wants to retire from the trade. He sold them as a pretty good package deal with zero financing. 7 of them are rented and all are interested in purchasing the ones there in. I want to create a Note, but wondering what other paperwork is involved. Can I get by with just an installment Note and an Addendum, or do I need some sort of Bill of Sale, or some other type of Property Transfer form? Taking advantage of tax returns coming in for down payments so I need to know quick. Any ideas?
Thanks
Rich
Re: Owner Financing - Posted by Ernest Tew
Posted by Ernest Tew on January 03, 2001 at 06:49:29:
Assuming your cost isn’t above market, getting seller financing without interest is a very good deal. If you were to sell the homes at cost but charge a fairly high interest rate (about 14%), you could earn a good profit and pay income taxes as the interest is received.
However, if you have a large markup in price, you could have a tax problem. As a dealer (for income tax purposes), both the interest and all the gain on the sales would be taxed in the year of sale.
My book explains in detail how to avoid these problems by entering into a net lease with an option to buy. You can even take depreciation deductions to offset some of the income each year.
If you would like to receive a copy of the Net Lease and Option agreements we use, please send me an e-mail.
Good luck,
Ernest Tew
Re: Owner Financing - Posted by Tim (Atlanta)
Posted by Tim (Atlanta) on January 02, 2001 at 07:59:12:
Do you have Lonnie’s books? The standard Promissory note in the book should be sufficient. As far as transferring ownership, you would title the home in the name of the buyer. Or if you are doing a lease/purchase plan, the buyer will need to sign a lease/purchase agreement.