I have done a good amount of seller financing on single family homes in the past, and would like to do some on mobile homes as well. The SAFE act of course put a damper on that plan. I know there are companies that you can hire for around $700 per transaction to have them handle the “loan origination”, which supposedly would be OK. I have also heard that going that route has not been tested yet. The Rent credit option I think is a good way to go, except for the fact that its still a rental, therefore subject to tenant landlord state laws, which many states will not let you make the tenant be responsible for any of the repairs. They require that the Landlord provide safe housing, and must maintain the property. Then you also still have the liability of a rental as well.
Has anyone looked into the process of actually getting licensed to do seller financing? What would the process be? What license would be required?
@krachut, I think you bring up a very interesting idea. I hope someone with experience can chime in.
@CaseyHomer, Casey, can you offer some advice please?
I looked into it, and came to the conclusion that it was not worth it unless you’re doing several high value deals (e.g. does not make sense for unloading $5K trailers) each year because there are a whole slew of other regulations you have to comply with in order to do it properly, such as becoming a state-registered lender, putting in place anti-money laundering processes, etc on top of getting your Mortgage Loan Origination license. Basically lots of paperwork and CYA for the government to show you’re doing business as a relatively honest and fair person.
Ken @RishelConsultingGroup offers packages to do this based on your needs. Would recommend you look up his website and give him or Diane a call to see if it makes sense for you.
For Rent Credit you can stipulate that you will make repairs, but that amount is capitalized to the value of the home, so they pay for much of it and are incentivized to only ask for repairs on critical items. If they are calling you for easy-to-repair items then are they really the type of home owner you want in the community? Sounds like a good reason to non-renew and find another tenant who will have pride of ownership behavior.
Rent Credit has not been tested in the courts and lots of people are doing it, and on the other side only those blatantly ripping people off are being brought to court for Dodd Frank violations (think payday lenders). As time passes there will be better guidance and testing of these - for now the onus is on you to decide what makes sense and to the extent you should comply.