take the MH sub2 and get the land for free? - Posted by Shannon - TX

Posted by Bill Hicks on April 11, 2006 at 16:00:04:

Dear Shannon,
First, we use title companies in Texas to insure title. You need to do this for the land.
Second, please don’t call people who buy or own manufactured homes flaky. It’s very offensive.
My mother happens to have lived in a mh for 20 years because it allowed her lakeside living at a super low price.
Find our what the payments are on the mobile itself
and multiply that by the number of payments still left. If you feel the cash from your IRA would be well spent paying it off, then do so. If not, don’t. It’s as simple as that. Can you sell the
home and land for more than the remaining balance on just the mh or not? It’s a mh + land deal. You don’t need to reinvent the wheel.
My 2 cents.
Bill H. (TX)

take the MH sub2 and get the land for free? - Posted by Shannon - TX

Posted by Shannon - TX on April 11, 2006 at 09:22:51:

I had a motivated seller call from my ad. She is making payments on a very good condition 1993 16x80 that is sitting vacant. It rests on land that she owns free and clear. She is so upside down on the mobile that she will give me the land for free (beautiful view) if I just take over payments on the mobile. Here are the numbers

mobile home balance - 18000 (yikes)
payments 345 (which includes $60 of insurance?)
land value - 15,000 (comps show this number for unimproved lots, improved lots are worth more)

how do I proceed? can I just get her to warranty deed the land to me and then start making payments on the mobile? the TDHCA (keeps track of mobile titles/statement of ownership of location in Texas) won’t let MH ownership change if there is an existing lien, so it would probably have to stay in their name.
would you use a title company or lawyer? would you take the land in a land trust?
I appreciate any help!!

Re: take the MH sub2 and get the land for free? - Posted by Tony Colella

Posted by Tony Colella on April 11, 2006 at 10:04:24:

There are a variety of ways to approach this deal so long as you would have purchased the entire property for that price anyways.

The most important point is to get the deed.

You might approach the mobile home lender to either assume the loan (or qualify to assume the loan) or simply approach the entire land/home package as a purchase, providing cash at closing that pays off the mobile home loan and secures your new loan with the land and home.

You could get the land and simply start making payments on the home but too me that is too risky, even with power of attorney letters etc. On a deal like this I would prefer to get the deed and get the home while getting the seller entirely out of the picture.

I would still use a closing agent or attorney and approach the land purchase just as I would any other deal.


Re: take the MH sub2 and get the land for free? - Posted by Shannon

Posted by Shannon on April 11, 2006 at 11:17:46:

Thanks for responding! Unless I buy the mobile in my self-directed IRA, I do not have the 18k needed to pay off their loan. Thats why I was interested in assuming the loan and getting the deed to the land. I feel like the land is what I’m really paying for and therefore reduces the risk. Why do you feel that it is too risky? I am a newbie to mobiles, so just trying to learn something here. I was thinking I could have them fill out POAs, and the Statements of Ownership and Location (Texas equivalent of a title) so that I can send them in when the mobile is paid off.
These particular owners are not your standard flaky mobile home buyers. They have been faithfully making this payment for 3 years while the mobile was vacant. They have all the paperwork together and I think they would be willing to keep in touch over the remaining life of the loan, especially to make sure I am paying their note. Does any of this change your opinion?

Re: take the MH sub2 and get the land for free? - Posted by Phil-TX

Posted by Phil-TX on April 11, 2006 at 23:17:53:

I agree with Tony and Bill. Getting the seller out of the picture is the safest and best way in my opinion. My advice would be to submit a Texas Real Estate Comission 1-4 Family real estate contract (TREC No. 20-6) available to the public at http://www.trec.state.tx.us/. Be sure to include the make, model, label number, and serial number etc. of the home as being included in the purchase contract. Get the property tied up and do your due diligence, line up your financing and do your marketing. This sounds like a good deal and I would not let it slip away if I were in your situation. I would not waste time trying to do a creative financing technique such as buying subject to, etc. While you have the deal under contract you can decide if you want to flip, rent, do a Lonnie Deal and rent the land or whatever. And you will have time to decide whether you will use hard money, borrow from a friend, bank, mortgage company, or credit card etc. The contract provides the buyer with “out clauses” or option language you need. Let us know how it goes.

Re: take the MH sub2 and get the land for free? - Posted by Tony Colella

Posted by Tony Colella on April 11, 2006 at 16:47:37:

I would just prefer to have the seller entirely out of the deal and not have some office clerk at the lender accidently send the title to the current seller, leaving me to chase it down forever.

If you can get them out of the picture by qualifying and assuming then you are probably fine. There is no right or wrong, just what you are comfortable with.

Depending on the value of the land and home, and your tolerance for banking pain, you could very likely get a small, local bank to loan $18k on this type of deal but please read all the posts about just how important it is to get beyond the lady in the lobby to the actual decision maker sitting behind her desk in an office with a nice title on the door.