Taking a mobile back...(long) - Posted by jp

Posted by jp on October 24, 2003 at 16:31:57:

It is not cost prohibitive in South Carolina either. It’s the other statutes that apply to dealers that make it distasteful to me. Like:

-I have to maintain a lot with an inventory of 5 mobiles at all times
-I am obligated to inspect and certify every mobile and provide a warranty to the buyer
-I’ve got to apply for a special permit to “show” each and every mobile home that is not on my “lot”
-I must be bonded

It’s also not as easy as just paying the money and receiving the license. I’d have to take classes, pass exams, provide a statement of my net worth, have good credit, etc, etc.

Taking a mobile back…(long) - Posted by jp

Posted by jp on October 24, 2003 at 16:09:52:

I’ve read the discussion the last few weeks on how the laws should practically apply to doing Lonnie deals. I’ve pretty much decided to operate on the “down low” and stay away from the whole “dealer” issue. My question is this:

Let’s say I sell and finance a mh to someone. Despite all my efforts to pre-qualify them, they stop paying on the note. I go down to the courthouse or wherever to begin the eviction/repossession process. For whatever reason I end up in front of a judge and explain that Mr. Buyer hasn’t been paying as agreed. What if Mr Judge says, “What!? You mean you’ve been dealing in manufactured housing without a license? You’ve got no recourse against this buyer. Mr Buyer you do not have to pay him a dime. And by the way, as soon as we’re done here I’m going to call the Manufactured Housing Board (South Carolina) and report you.”

The fine (SC) is $500 for each transaction. What if the MHB starts digging into my records and finds out I’ve done 100 of these deals in the last 10 years. Now they slap me with a big fat fine of 50,000 bucks, plus possible jail time. What if they require me to pay back all the interest I’ve ever received from my dealings?

This is a long and paranoid scenario. The bottomline question that I have is, how do you hide your technically “illegal” dealer behavior from a judge when you’ve got to take a MH back??? Are most judges ignorant of this sort of thing or do they not care?

don’t forget to dress properly… - Posted by Greg Meade

Posted by Greg Meade on October 26, 2003 at 07:43:13:

3 piece suit, shined shoes, colorful tie, and matching briefcase…then call a qualified attorney and have her appear and get title back. In my state, less than 500 bucks!
seriously, had one come back (total invested 4267) and it went like this. Joey, the pm called me 2 weeks ago and told me my second deal in his park missed a rent payment. Drove ove paid 160 and used screwdriver to open back door as elec was off and home empty.Fridge gone a big mess but brand new janitrol central a/c and heat unit. Spent 270 with my handy ladies cleaninf and painting, carpet cleaning and dump fees. 125 for rebuilt fridge. Total outlay less than 700 including electric turn on. Got 1500 down when sold and they made 2 payments of 255.With the new a/c will sell for 2k down 300 per month 40 months no interest. I just love move outs …so will you. I will start ad on Mon to resell and will move new owners in prior to getting old owner’s name removed from title…perfectly legal if this is disclosed to prospective buyer and the sale is subject to clear title. They will revert to tenants if clead title is not delivered in 60 days. Court will have the old owner’s name off title in 30 days. I am listed as lien holder and i retained title. Regards…Greg

Step Away From Your TV - Posted by Tony-VA/NC

Posted by Tony-VA/NC on October 24, 2003 at 17:09:23:

Let me begin by saying that I agree with the other posts that when reasonable, dealer licensing is preferable. But that aside, let’s look at the reality of the small claims court system and the concerns you raised.

You walk into a courtroom that is filled to the gills with landlords and tenants (if the tenants actually show up which I have found to be rare). My Lonnie buyers rarely showed up in court and when they did, all that the judge asked was how much they owed. I responded. The judge then asked the tenant if that was correct. They would say yes. Case closed. Although it never happened, should they say they didn’t owe me the money, the judge would have set another court date and we would have gone to trial. In the meantime, I would have met them in the hallway and negotiated for them to simply walk away and in return I would drop the suit.

The courts are typically over loaded with cases and the judge does not have time to play detective nor should they. They should try the facts and go onto the next case.

Most if not all of the licensing agencies have little understanding of the mobile home licensing laws. The judge is likely to be totally unaware of the rules and could care less. What buyer of a Lonnie deal would think about licensing as a defense? They are looking at you as someone who owner financed them when no one else would.

Let’s not forget that you are not in court as a dealer. You are in court as the lien holder. The dealer issue has no relevance. You, as the lien holder, are repossessing the home, not conducting a dealer transaction. Were this a dispute over the purchase agreement, that may have some relevance. In the repossession process, you are submitting to the court the promissory note and security agreement.

Could all of those worse case scenarios that you mention occur. Yes, I suppose in a perfect world they could. Now how about reality?

As investors we must look at our risk tolerance and level of exposure. If you go out and hammer people, treat them like Chuck does others here, or take unfair advantage of folks, well then you should bet someone will wait for an opportunity to effect revenge.

I think that if you treat people fairly, you will find that you rarely need to go to court. This does not mean you should not file and begin the process to ensure you buyer leaves, but the reality of going to trial has been very, very slim in my experience. Court yes, trial no.

Best Wishes,


Re: Taking a mobile back…(long) - Posted by Broadway

Posted by Broadway on October 24, 2003 at 16:14:15:

I am curious why everyone seems to want to avoid the MH dealer status? Is there a reason why anyone would’t just file for a license? It is only $200 in my state. I am new but do not understand the issue at this point.

Re: Step Away From Your TV - Posted by Philip

Posted by Philip on October 25, 2003 at 18:24:31:

Tony, I wanted to say thanks for this great post. As usual, it is clear as a bell and well thought out. I haven’t worried about this issue, but if I was this was a great post for the answer.

Music to my ears. - Posted by jp

Posted by jp on October 24, 2003 at 17:39:43:

Thanks Tony. I’m glad I got to hear from someone who’s “been there, done that”.