Buying new homes (possibly TruMH) with local bank financing

mobile home university
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Spoke briefly to the folks at Clayton and I know I’ll need a dealer’s license to go with their homes. I’m adding 5 lots on some open space in my park and the local small bank I have my loan with is willing to finance new homes, At 5%/5 year fixed and 25 year amortization I’d be nuts to say no.

I know I can get 700 a month all day long for a decent 2bd/2bath new home but the problem is I’m up in Montana and prices here are nuts. I know in the south and mid-west you can get a decent 90’s home for 10-12 grand but here that’s non-existent and you’re lucky to find 70’s junk in that range. Shipping costs from more affordable areas seem prohibitive. With median home prices around 200K where I’m at the demand is there and the numbers work but I’m having a heck of a time finding something affordable this far out.

So I was thinking of buying some Tru homes but the rep seemed to say the factory is in Indianapolis. Anyone ship them long distance? I’m gonna give them another call but I only need 4-5 homes and I know they’re looking for about 10. Hoping a simple cash direct purchase gets around that.

I’ve looked at some of their models, what are you guys paying for a 2bd/2bath? I can justify a premium for shipping if the price is right.

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You’ll do better with at least a 3BR home or 4BR if your lot size will allow it (Tru does make 3BRs, but not 4BR). All the affordable housing dynamics that make MHPs a great investment are ‘all the more so’ with 4BR homes. Larger families often can’t afford site-built 4BR homes, and there are virtually no 4BR apartments anywhere. Clayton makes 4BRs, as do many other manufacturers.

My bank gives me terms on MHs almost as good as yours. If you can borrow and pay cash to the factory, then there is no need to get your dealer’s license or go through the CASH program. Just order direct.

Fleetwood has a plant in Nampa, ID; Champion has a plant in Weiser, ID. Both are closer to you than Indianapolis.

Money talks. Order direct, pay cash, get as large of a home as your lot will allow.

To your continued success,

-Jefferson-

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Keep in mind the economics of the area dictate the sale price of homes. If stick built are at $200,000 range then manufactured homes should be comparable. This is similar to our numbers.
In my area, Ontario Canada, we buy from the US (Fairmont) delivered for around $75,000 and resell in the $95,000 range. Older homes in our community (mid 80s) resell for $60,000 - $70,000. Look at the resale values for manufactured homes in your area to establish a price for new homes.
We buy strictly 2bd/1-2 bath and restrict our tenant base to adult only. We are not interested in the difficulties associated with operating a family community.

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I would price out other manufacturers in the area: get final, confirmed quotes from everyone that include shipping.

When I priced out homes for my park in Michigan the Tru home was pretty far away and shipping was $3,000, but even with that shipping premium Tru was significantly cheaper than the competition for a 56’ home (for my small lots). I just placed my first order this week, keeping my fingers crossed and will see how the home works out.

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Jefferson, I agree a 3bd is preferable so I’d probably mix and match. My newer lots will fit about anything. I do have a fair amount of senior demand so 3 bds might be overkill for them. Problem I’ve seen with Fleetwood and Champion is that they don’t seem to have an affordable line with something like Tru or Legacy. I’ll dig in deeper though, perhaps I’m mistaken. Around these parts there are a lot of their luxury homes around.

Noel, so what are you paying before shipping?

Definitely going to price different manufacturers but I need to look into contact info for direct purchasing as dealers do me no good with retail or near retail pricing.

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@Jefferson , you wrote the following:
“If you can borrow and pay cash to the factory, then there is no need to get your dealer’s license or go through the CASH program. Just order direct.”

@Jefferson , what Factories are you buying direct from?

What are you paying for a singlewide 3 bedroom?

A year or so ago I contacted several Factories to see if we could purchase with cash without a Dealer’s License. They all said that we needed a Dealer’s License in order to purchase directly from them with cash.

We are located in South Carolina.

Thanks So Very Much!

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@George - 14x56 base price $13,795
Options (zone 3, vinyl windows, gas furnace+range) - $1470
Shipping - $3,000

However, we’ll see if I ever actually get the order placed. I’ve signed and sent the final quote they sent me, and sent multiple emails that I’m ready to move forward with the purchase, and no one has responded. It’s like they almost don’t want my money.

In Ohio I was unable to purchase cash directly from a manufacturer without a dealers license. Seems like a highly unnecessary layer of red tape, but that’s how things go sometimes.

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Wow, thanks Noel, seems like the question gets asked a lot but the answers tend to be indirect. So you’re buying direct, not using the CASH or CRP program? So 3K to ship from Indiana to OH? How many are you buying?

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That whole program seems to be very poorly managed. I’ve sent emails to the CASH program people with no response. I’ve even called 3 or 4 times. (Lance?) is NEVER available and does NOT return calls. Sorry the guy’s name escapes me at the moment but he’s the guy listed as the contact in the webinars.

I understand he may be busy, but can’t even return a call? Sorry but there’s just no excuse.

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@GeorgeNiko
I’m buying direct, no cash program, although it is my limited understanding that there is no markup for the CASH program. $3k shipping from I’m not sure where, I believe Indiana, to Grand Rapids, MI.

I was going to buy just 1 as a trial run. They said they don’t offer any discounts for multiple ordered.

As Coach said though they still haven’t respond to fill my order, it’s getting to the point where I might skip Tru and spend my time hunting more used homes instead of hassling them.

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@Noel_S
Thank you so very much for sharing your information!

We so greatly appreciate it!

Previously, all the Manufacturers that we had contacted said “You must have a Dealer’s License”.

Thus, it is nice that one Manufacturer does not require that.

However, the fact that they will not fill your order does not sound well.

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Have to agree, I got them on the phone once, tried since, e-mail… nothing. I’m guessing they’re simply swamped and unless you’re talking a large order you get in the B pile.

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They don’t know how many homes I might order because they won’t return my calls or emails. It’s really unprofessional. I doubt Warren Buffet would approve.

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@Noel_S As Coach said though they still haven’t respond to fill my order, it’s getting to the point where I might skip Tru and spend my time hunting more used homes instead of hassling them.

At least I’m not the only one.

Has anyone gotten decent service from any of them?

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Does anyone have a website for these guys. I’m in Indiana. Maybe I could go there and figure this out once and for all. We need a reasonable solution to finding homes to fill up parks. Get me any info you have.

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I have worked with Lance and 21st Mortgage/Clayton since the program first came out, and have ordered over 400 homes under the CASH program. I’m not sure what number you’re calling, but we get great service from them. That being said, they are rolling the program out nationwide and are extremely busy due to park owner demand. Every time I talk to Lance he’s in a different city, and he may just not have had a chance to call you back yet.

I don’t think some of the folks who have posted on this topic fully understand the CASH program. First of all, it’s the only financing source in the U.S. that allows you to go zero down on the cost of the home, the move, the set, the skirt and decks – everything. Any bank is going to finance maybe just the home itself, and with 20% or more down. Legacy, which has the only other home finance program, requires around $10,000 down on a $30,000 home deal. That’s $10,000 more than CASH. If you fill ten vacant lots, that’s $100,000 out of your pocket vs. -0- with CASH.

Another benefit of CASH is that they step into the lenders shoes, completely in-line with the SAFE Act, and make the loan direct to the buyer at an interest rate less than 5%. That’s the magic ingredient that makes the home affordable for the consumer. In addition, you are utilizing their ability to make mortgages, which you cannot do on your own under the SAFE Act unless you become licensed to do so. They do require you to get a dealer’s license, but only because they are trying to make sure that every transaction is 100% above-board. If you are selling homes, you need that dealer’s license to be free from risk of litigation.

A third benefit is that their TRU product is the lowest priced house in the U.S. in every size they make. Go to any mobile home show – such as Tunica and Louisville – and see for yourself.

It’s a free country, and everyone can buy homes from whomever they like, but I just wanted to get the accurate information out there for those who have not posted and are considering buying homes to fill vacant lots. We have around 2,000 vacant lots out of our 17,000 lots, and we intend on using the CASH program to fill all of those.

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I appreciate the reply Frank and I have no doubt that he returns your calls. But the fact is that I’ve left numerous messages over a one month period and no returned call. I’m quite sure I’m not the only one.

I don’t care how busy he is, someone should call back. That is just unprofessional.

As to what number I called, I called the number on the webinar and spoke to his assistant on at least 3 occasions. I always got the same statement from his assistant, “he’s in a meeting”.

If he’s truly that busy, then he needs to hire an assistant. There are 3 people here today alone that all say he does not return phone calls or emails.

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Coach62,

I am sorry that you have tried to reach us and have not had a response. While the benefits of our programs do not always align with the needs for prospective communities owners, we expect that someone from our team would respond to all inquiries in a timely manner. As you stated, a lack of response it never acceptable.

As we do not have records of your call attempts, please call us 800.955.0021, extension 2930 or reach out to us on email at CommunitiesTeam@21stMortgage.com and we will return your contact as soon as possible.

Again, I apologize for the delay in getting back to you. We look forward to discussing the CASH program in more detail and seeing if we can support your needs.

Thank you.

Lance Hull
lancehull@21stMortgage.com

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QUESTIONS:

  • @Noel_S & @Coach62, were either of you able to buy new Mobile Homes through the CASH Program?

  • If yes, what brand did you purchase (Tru or another), how much did it cost and are you happy with the Mobile Homes?

  • If no, what other avenue did you pursue?

Thanks in advance!

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Kristin,
We bought two small 14x56 homes through Tru. To get more flexibility we decided to purchase them all cash and then use financing through a 3rd party lender (PEP) rather than the CASH program. (note, if you buy the home through the CASH program you’re paying an 8% markup over the all cash price!)

My sample size is very small, but unfortunately our plan flopped. After a month we had 0 people seriously interested in the home. We may have just needed to give it more time, but we were in a high demand area and switched back to rent credit and had the homes filled within 1-2 weeks each.

These were the main challenges I think we faced with the 3rd party financing:
-The exact monthly payment will depend on the borrower, and you legally can’t advertise or tell people the monthly payment. This can be understandably frustrating for interested applicants.
-The third party financing is very expensive, so expect high monthly payments
-The process is complicated
-The underwriting tends to be fairly strict (not necessarily a bad thing!)

We switched back to rent credit, but took a few hints from the 3rd party financing and increased our deposit and tightened our entry criteria.

I feel like trying to finance new small homes is a very challenging combination - it’s a small house with a high monthly payment. Our demand tends to be much higher for used small homes with a lower monthly payment than the new small homes with higher payments.

We’re going to try 3rd party financing again soon, but this time on a 3 bedroom home and see how the results compare.

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