Investor will bring homes in - how to structure deal

Guy wants to bring some homes in the park. He will purchase the home, cover the cost of bringing it, repair and refurbish himself. He has the carpentry skills and financial acumen. Home would likely be rented with an option to purchase.

How can we structure a deal that benefits and protects us both?

  • Park buys the home from him, pays on a note secured by the home?
  • Personal property trust?
  • Partnership?

Example: Cost of home including move and set up is $8000. Park agrees to buy for $12,500 to be paid $2500/yr over 5 years. At end of 5 years, option to purchase tenant gets home (or park retains), investor has a 9% return.

Some tenants will leave and the home will require repairs. Need to provide for that.


I would make an agreement to allow him to do one and see how it goes. I would have him sign a lease and have him pay rent on the lot until such time the home is sold by him to a new owner that you screen and approve. I would make it very clear he is not allowed to rent out the home it must be sold and until there is a new owner he is your tenant.
I would not agree to any form of ownership of the home myself. His money his risk his responsibility.
If the first one is successful go one at a time after that but do not agree to take on any of the risk yourself.
Tell him up front that you have high standards and will be thoroughly screening all of his potential buyers and that you will likely refuse some, he needs to be prepared to find only quality buyers not just someone with a pulse. You also need to screen him as a tenant.
This is the process I have successfully used and reduces my risk to almost zero.

In this area, people don’t have the money to buy a home outright. So, he would have to sell the home and take payments. Dodd Frank kicks in. Has to foreclose if the buyer stops paying. See any way around this?

Avoiding risk for myself is a good point. To avoid risk, suppose I own the home, making payments to him with Stipulations: no payments when the home is not rented and he is responsible for repairs during the payment period? Or a portion of the payment is held back for repairs. Bottom line, I’m trying to rent the home and give him some of the proceeds.

This is the reason you want him to be the seller to the end owner not you. If you buy it and make payments it is no different for him than to sell to end buyer. What you are trying to do is make it more attractive for him and in doing so are getting involved in a unnecessary triangle that puts you at risk and removes all risk from him. This is not a good business plan simply to fill lots. This will have you saddled with POHs and renters which you do not want in this business. Avoid having POHs and renters at all cost.

Good advice from Greg. As to Dodd frank i wonder if there’s a way a rent credit could be constructed.