What form to use if I have a private investor? - Posted by Laura

Posted by Marty (MO) on June 04, 2007 at 22:17:54:

control your deal. Uness the investor has contracts he wants used, use
paperwork that makes YOU comfortable. We use a simple promissory
note, like the one in DOW.

I don’t think you should tie the home to the deal. It complicates
repossessions… Also, it unnecessarily ties someone into your business.
“But that’s the home I invested in, I think it should get Moen faucets
and hardwood floors…”

Your lien is plenty.

If you don’t have an accounting background, buy John Hyre’s KISS
system. It’ll give you a great business model to deal with taxes and it’ll
give you airtight documentation to show your investors. As investors
get confident in you, you’ll find even more money’s available.

Also, I can’t recommend Jimmy Napier’s Invest in Debt enough. It’ll
teach you how to tweak both your mobile home notes and your
investor notes. You will be an expert. This is the guy who taught
Lonnie how to create notes…

Finding deals is the tough part. Finding money is the second toughest
thing. You’ve already got the book smarts and the money, so you’re
ready to rock!

Good luck-


What form to use if I have a private investor? - Posted by Laura

Posted by Laura on June 04, 2007 at 21:38:23:

I am pretty new to MH. I really have enjoyed reading all your posts for months now. Yes, I have bought and read ALL the books you guys have recommended and then some.

My question is this - Let’s say I buy a MH for a total of $1000. When it is “sold”, I would get a loan from a private investor for $1000 @ 15% for one year so that I can lather,rinse,repeat. I have all that in place already, MH and investor. BUT I can’t figure out what dang form to use for the investor. I want to somehow tie the loan into the MH as collateral, but I don’t think that I can have 2 liens against the MH (one, buyer and two, investor).

Can somebody please give me a little guidance? TIA

Sell the note, don’t get loan - Posted by John Merchant

Posted by John Merchant on June 08, 2007 at 16:15:24:

When you sell the MH, if you’re using Lonnie system, you’ll be taking a down pmt and a note from the buyer/occupant…which is secured by a lien on the MH.

So why would you be wanting a loan?

Why not just sell the note (or part of it, via a “partial” or the front end of the note, to the investor at whatever discount you & he agree on?

Then you’d take your cash from that sale and do it again and you’d not have a loan to repay.

Re: What form to use if I have a private investor? - Posted by Anne_ND

Posted by Anne_ND on June 05, 2007 at 07:21:03:


I agree with Marty. Use a promissory note. I will secure my investor with the cashflow from the underlying MH note, or, in some cases, with the MH (not with a lien, just on the P note), although I’ve moved away from that.

I suggest writing your own note that has the info you want in it (i.e., no prepayment penalty), and then have your attorney check it out.


PS- The amount you borrow from your investor has no relationship to the amount you PAID for the MH. It has a relationship to the amount you sold it for and the terms you got from your buyer.

Also, I usually season the note for a few months- even though my investor is secured by full recourse, they like to know that the cashflow is stable so that I don’t get in a pinch when I have to pay them.