Can I lease out the lot rent on a separate rental agreement, Lease out the mobile home on a separate rental agreement (no violation of Safe Act here), and in the mobile home lease indicate that at the end of 3 years tenant has the option to continue renting it, move out, or buy the home for $1000 cash? Is this legit?
After three years if the home is worth $1k, what is it worth today?
Not sure exactly, but might be anywhere from $5000-$10000 in value. It’s a 3 bedroom single wide from the 90s.
So why do you want to sell it for cheap? Why not rent it for three years and see where you are? This is a real question.
To put the same question in a different light, what’s the option fee cost? (The down payment?)
If your answer is $0 (or huh?) then no, you can’t do what you’re proposing legally. It’s a disguised mortgage if you’re renting the house for (say) $300 plus lot rent and then with final $1000 payment (IF they’re in good standing and IF they’ve been good tenants) you give them the house. That’s just a credit purchase from the get go. Except without the standard protections of home purchases and credit consumers for three years. You can see why it’s illegal and considered predatory. I hope.
The problem is when you get a dud renter and want to evict, you have to be ready to face real lawyers.
I understand. So may be what I’ll do is just write up a strictly straight up rental agreement. I will not indicate in there that we will be doing anything in particular after 3 years. Then after 3 years I can offer them an option to buy they home, if they say yes, then rip up the old agreement and make a new lot rental agreement, and transfer the MH title over to them.
How does that sound?
That sounds reasonable. You can’t predict the future.
For your POHs what are you doing to sell them or off load them?