It's a mobile home on 3 lots.

The land is fenced in and the mobile home is a single wide in a little less than fair shape, it needs some fixing to be nice.

Being like that there is not a bank in this world that will finance this deal and I don't blame them one bit.

How does this usually work? I'm figuring go to a title company and pay them, but I'd like to be armed so it doesn't cost us an arm and a leg.

Anyway it will be 35K with 6K down so that would be a 29K loan.

At 10% for 5 years that would make the payment to be $616 and at 12% that would be $645 a month for 5 years.

Then she would have to figure out a way to get insurance on the place. Only problem here is that I don't have a title to the mobile home and foremost probably won't cover it if there isn't a title to it... I'm thinking she could somehow designate it as peer&beam maybe? And get it insured at the value of said loan maybe? I don't know how this would work with me being a lein holder.

 

Obtaining bank financing should not be a problem with this deal, as long as you are getting real estate as part of the deal. The bank will more than likely look at this as unimproved property (just raw land), but will more than likely want to take the title on the mobile home as well, as extra collateral.

It would not hurt to talk to them about it, owner financing can be a bit risky most times, especially if the other party is not very well known by you, or even worse yet.......is family

 

I went through B of A for a deal like this. You will still need a title company, but the bank was very helpful and set up an account to process your loan for you and the seller. They even gave me a coupon book. Worked well for me, when in doubt, see a lawyer. Spend a few extra bucks now making sure it is done right can save you from some major headaches later if something should go wrong.

 

The Title company will clear the title, and fill out all the forms for you. It is up to you to have a clear and concise contract. You simply MUST have a contract. Do not do anything on a verbal agrement,and a handshake. This is real world. Basicaly the land and trailer are guaranteeing the loan. You are carrying the note, so you get the whole shebang back if they default. The remedy for default, and how long to default (30 days, 90 days?).
If you haven't done this before, and arent ready to be very strict about the conditions of the contract, you may want to have a lawyer draw up the contract for the first time.
Don't know what the insurance companies will say about covering. They each have slightly different standards, and payout history. Since you are carrying the note, you can decide if you want it insured, to protect your investment. it is actualy not required in my state. the finance companies only require it to pay them off if you burn accidently it down.

 

Get an attorney, and some earnest money down. You might give them a deed to only one acre until all 3 acers are clear. Or maybe a lease to purchase agreement, with all the lease money going to purchase. If they want you to hold the paper, then they most likely cant qualify for a conventional mortgage. My friend just repoed a very simular property.

 

If you're selling! don't touch an article of agreement! A lease with purchase option is the only thing you should consider.
With an article you are the bank and they are the owner. You must foreclose to get your property back.
With a lease if they don't pay you can haver them out quick.

 

Well, we made an agreement in writing. I'll finance with 6,000 down ON MY TERMS!!

The reason I was to rush is because she is buying it at a HUGE premium and she is agreeing that I'll finance it at my terms sold "AS IS"... So I have an out there because I can say.. 21%, 6 months... LOL if she gives me any guff.

The mobile home is a POS literally not worth more than 4 grand as it sits and the lots *might be worth 15,000. I've actually considered hauling it off it is such a POS and wouldn't be worth selling, no one would buy it.

I'm thinking 12% for 5 years.

I don't really want to do a lease to own because there is no money down on that and she wants to do improvments immediately... Which she wouldn't do on a lease to own. And the main reason would be that she could back out and it would be back on the market again... Especially since it sat on the market for 8 months already. I'd also want to do a triple net lease which would get too involved for her.

That's a good idea on the lawyer part. I'll have to get on that in the morning. I'm thinking put the value of the mobile home at $4,000 and slipping that into the paperwork somewhere incase they get lawyer crazy on me, never know.

And as for the bank, I've already talked to bankers and not a one would finance it because I would much prefer cash on this deal but after 8 months it is looking impossible. The mobile home doesn't have a title to it and it would be too hard to finance it and it is a huge POS.

 

Oh, and to clarify.. We're going to go to a title company to get it all sorted out and I'll probably get a lawyer in on it for piece of mind.

 

Good move with the lawyer....it's a big sell.....just protect yourself.

 

You ask for advice then don't even listen!
I hope she pays, if not foreclosure can take years. You can't just evict someone from there property!
You can write a lease with purchase option with the same terms as an article but the seller has 100% more protection. You can evict a tenant!
Maybe you should talk to a lawyer before you put anything in writing!

ps all trailers have a title! you can have it traced to the last owner and get a copy!

 

Yes that's why I put financing "on MY terms".

That's my out here, I can make them so difficult she won't be able to go through with it and get rid of her now.

 

I don't know if that will fly exactly. There are usery laws to be concerned with here. In residentail lending you cannot charge an "unusually high" interest rate over types of financing available to the borrower, or said borrower might have recourse against you......ie she might be able to sue for damages and get out of the financing. Just something to think about. And yes the 21% would be considered usery.

 

Definitly ask the lawyer. It can be a hassle to evict. My friend had to do it with a very simular parcel. It took 6 months and a lot of hassle.

 

Yeah, I know of usery laws.

And yes it's a big risk financing something like this, but I really don't need the cash flow and for what she is putting down that will cover the costs of what the trailer is worth.

I can stomach a foreclosure if I have to.

 

Good luck!