MH: dealer's license; rent vs carry note vs L/O


#1

I am looking to get out of the full time job by investing in MH. I have had a few stick built rentals that have had some LL headaches. I live near Asheville, NC. I read Lonnies two books, worked the financial calculator and became interested in MH investing. I have a fair amount of cash in money market, 403B, and mutual funds.

Options I see:

  1. Buy and hold (renting with a property manager)I can keep full time job until I get enough passive income with property manager, but renters are more transient and destructive than owners.

  2. Lonnie deals (carry note) but need dealer’s license in NC after selling more than two per year. Any legal way around getting license or is it worth to get license as Part-time investor?

  3. L/O eliminate some renter problems, but I will still probably have to carry the note.

Buying in park and renting the dirt puts control in PM’s hands

I know all investment options have risks, any suggestions?


#2

There are several NC park owners and Lonnie dealers that post on this web site and I am one of them. Here is my take in my opinion. I have done many rent to own and lease to own contracts and have never had a dealers license ( very grey area ) and not really legal according to NC Department of Motor Vehicles. I am being required to get a license now after applying to purchase new homes factory direct at a mobile home park developers price. If you want to be totally legal and not have problems get the license. I cant answer all of your other questions about doing deals in other peoples parks because I do all my deals in my own park and prefer to have my $$ in my control in my park period. Why dont you buy a small park? If I can help in any way let me know.

Best of Luck

Rick Ewens


#3

I personally prefer Lonnie Deals over L/O, even L/O that converts to a note after a year or two. While L/O is better from tax and state licensing standpoints, you are liable as a landlord. Regardless of what is in the lease or option agreements, you are still the landlord on the home and liable as one. I have neither the time nor the desire to spend the time landlording on a mobile home takes (as opposed to landlording on the dirt), much less accepting the liability. For example: I am involved in buying a park of very good terms right now…part of the reason we are getting very good terms is that the owner had a rented MH burn with three people in it. While the legal outcome will likely be a “win” for him, the stress is killing him. Mobile home dwellers tend to be careless (leading to problems for them), litigious & quick to lay blame elsewhere (leading to problems for you) and treated as victims by simpering liberals (leading to more problems for you, the evil landlord). In short, I do not think that the benefits of L/O outweigh the liability.

John Hyre