Texas-Based MH'ers - Posted by Steve C., Houston

Real Estate Investing Mobile Homes & Mobile Home Parks
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Posted by David Alexander on May 30, 2000 at 12:39:02:

Just make sure you count the costs. Depending on how your using that RE license it could be costing you money.

Lot of money to be made in MH’s.

David Alexander

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Texas-Based MH’ers - Posted by Steve C., Houston

Posted by Steve C., Houston on May 27, 2000 at 14:46:19:

I would appreciate any information those of you based in Texas can provide on the following:

  1. At what point do you become a “dealer”?

  2. How does that affect you?

  3. Can it be avoided, legally?

  4. How does my being a real estate agent help or hinder me?

Thanks in advance for the info!

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Re: Texas-Based MH’ers - Posted by Joe Ponce San Antonio

Posted by Joe Ponce San Antonio on May 30, 2000 at 21:16:44:

Hi Steve,
The law says anything greater than 1 mobile home requires a “retailers” license in Texas. Texas has several categories of licenses most of which require carrying insurance and posting a surety bond to the state.

A real estate license will not help or hurt you. The law is different for manufactured housing so the rules of TREC (Texas Real Estate Commission) do not apply.

Suggest attending the quarterly classes conducted in Austin. (20 hours on 3 days) Cost $125. I just went and met several other people in the business. You will be amazed at the number of different niches in this market. Texas is number one in many of the categories of manufactured housing, and probably one of the most comprehensive in its laws.

After having done a number of deals under different names, Corporate, Wife, ?? etc. I am thinking that the broker?s license offers the most flexibility here as opposed to the “retailers” license. The reason stems from the fact that Texas requires the sale to take place from your registered place business i.e. your dealer lot or the place you show the homes from. To do it from a MH park requires you to change the address on your license and bond with the state to that park you are trying to sell in. (A major inconvenience if you are working a number of parks).

The broker’s license is much less regulated allowing title to be transferred between two parties without the location requirement.

Here are some thoughts: Is there any reason your corporation cannot buy the note (at a substantial discount) from the sellers who offered to owner finance the transaction? Why couldn’t you include a heftily brokerage commission in for yourself and finance that into the transaction?

These are some of the ideas going through my head at this point. Comments Welcome…

This information comes from director from administration for manufactured housing in Texas. (Believe me, I beat him up thoroughly on this issue, looking for loopholes or ways to make this happen).

The bottom line is that the law was not written to address the individual investor seeking to do Lonnie deals.

Should this stop you?

Take a look at a couple of Lonnie’s articles on the subject.

Me? I’m just gonna drive on…

Give me a call after June 5 at 210-481-7396 to talk more.

Best Wishes

Joe Ponce

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Re: Texas-Based MH’ers - Posted by David Alexander

Posted by David Alexander on May 29, 2000 at 13:03:50:

Contact TDHCA (Texas Department of Housing and Community Affairs)

  1. “YOU” can only buy/sell 2 (I believe, check for sure) Mh’s a year.

  2. You have to pay the taxes all in one year, not installment sale. You should have a Corp be the dealer.

  3. Absolutely, there is always a way. Immediate thoughts Friends/Partners/Trusts/Multiple entities. It all depends on how active you are at buying them.

  4. Being a RE agent couldnt tell you.

David Alexander

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Let me get this straight… - Posted by Brad-TX

Posted by Brad-TX on May 31, 2000 at 13:15:30:

I can take the class, but I won’t get a Brokers license unless I carry the proper insurance and post bond. As a “Lonnie-type” investor, I see no reason for the insurance or the bond, but the laws weren’t designed with the “Lonnie” investor in mind. so, regardless, I need to purchase the insurance and the bond to get the license. Is this correct???

PS: What’s the cost for insurance and posting bond?

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Re: Texas-Based MH’ers - Posted by David Alexander

Posted by David Alexander on May 31, 2000 at 04:15:05:

Joe,

You just hit the nail on the head. As long as Dealers, other Mh park owners etc, dont see you as competition, they wont feel threatened and therefore you wont be harming anyone. This law was made to regulate the dealers themselves, not Investors. Just stay low key until your ready to make a big go at it. That’s easily enough accomplished by doing just what you said in buying them, only add trusts to your arsenal.

Just some thoughts.

David Alexander

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Re: Texas-Based MH’ers - Posted by Steve C., Houston

Posted by Steve C., Houston on May 30, 2000 at 09:15:44:

David,

I read through the regs and the limit is two MH per year. The exception is if the MH is sold with land, making it a real estate transaction.

To be safe, it would appear I will need to get a Broker or Retailer’s license, or work with an existing broker or retailer to get a Salesperson’s license.

Starting to look complicated, but I’ll continue to look into it. If I were not a RE agent, it could be a lot less complicated, but I do need to protect my license.

Thank you for the info.

Steve Connelly