This is a strategy I have been using in my area

Hey everyone!

I hope you all are doing well and getting off to a great 2010. I posted this originally at a creative financing site and then copied and pasted to CRE and I wanted to send it over here too.

I have already done quite a few deals this way in the past few months and I expect to do 5-10 more before the deadline. I wanted to see if anyone is doing this OR see if anyone can profit from it. Good luck!

I have been doing some deals in the last few months with great success. It involves mobile homes on land and I don’t hear other investors talking about this strategy. I wanted to share it, break it down, make it better- perhaps, and hopefully by doing so others here can profit from it.

First, I have been investing in mobile homes on land now for about four years. Actually, 90% of the deals I have done have been mobiles. Back when FHA loans were still somewhat easy to qualify for we were selling homes to our retail buyers with the program. With gift funds through Ameridream(etc), lower qualifying scores, and affordable rates we had a decent system going.

It’s no secret mortgages are much harder to qualify for now. But, IMHO, I think qualifying mobile homes on land is EVEN tougher. Banks are moving far away from these things for many different reasons(different disscusion).

So, for the last year I have been learning and practicing different techniques like lease/options, sub2, wraps, etc. I was able to pick up some really nice deals Subject to the mortgage with nothing down with NO competition. I am still talking about mobile homes on land.

After a direct mailing campaign of STRICTLY mobiles I was flooded with sellers who were desperate to sell. I am talking about homes on the market for 1,2, or 3 years with NO activity. I mean NICE homes. These homes typically were selling for $100-120k two years ago in my market and are now listed around $80-100k. Listed right around payoff amount.

Obviously as an investor we could NEVER buy these properties and make money on them.

With this IRS credit currently in place I have been selling a few of my rental land/home properties on wraps. I am seeeing a TON of interested buyers for seller financed deals! Not to long ago my mobile home broker was telling me has had 700+ credit score applicants denied for mobile home loans because of varying reasons. So, there are GOOD potential buyers out there.

The technique I have been using with success has been to wholesale or “wholetail” these high priced deals. I am contracting with seller to purchase their property. Then finding qualified first-time buyer with a few thousand dollars and assigning them my contract for $8-10K. The IRS credit is pretty much my fee for helping them buy the house the couldn’t qualify for.

All parties have been extremly happy.

By “qualified buyer” from above I mean I am still actually doing credit, reference, employment check. Depending on the preference of the seller, I am actually presenting my potential buyer’s information to them and getting their approval before we close with title company.

That is a basic outline of the process I am using. I tried to keep it as basic as possible. So, is anyone doing anything similar to this? Do you see a way to improve upon it?

I have been meaning to share this and get some feedback. Any constructive criticism would be appreciated. I hope some of you are able to profit off of this!

Cole Haynes

We’ve been trying to sell a home for cash using the government credit in the ad as follows:

RECEIVE $4500 down payment (first time or current home buyer) towards this absolutely beautiful 3 bedroom, 2 1/2 bath home with 1850 square feet, ceramic tile countertops, very large fenced yard. Pets welcome. $44,900.

No luck. We are doing this in our own park and have flexibility with the lot rent we can charge.

What does your ad look like and where are you advertising?



You mentioned you are trying to sell this place for cash. Have you had success in your market doing this for a while? In my market it is TOUGH to find a cash buyer. Well, for the type of properties I am selling anyway. You also own the park so you have a ton of flexibility here.

You are trying to sell it for $44,900 all cash (if I understand correctly). Right now the home is sitting empty drawing no lot rent at X/month.

If that is the cash price then the high retail price would be what you could charge with owner financing. Let’s use $60k. Is that unreasonable?

If you could get someone with $4k or $5k out-of-pocket AND take their $6k for financing them the deal you would have $10k+ upfront. A nice payment on your home and a performing lot.

I would make sure to let the buyers know that if they stop paying on the home or sell it within the first 36 month period that owe that $6k back to the government.

I am advertising these properties just like any other land/home deal.

Bad Credit Ok! 3/2 double wide on 1 acre!! Will Finance!

Payment is just $XX/month Only $4,000 out-of-pocket!


When they call or come see the house I explain we take the IRS credit to payoff on the loan on top of the $4k to help them qualify for the house they otherwise wouldn’t be able to buy.

Would that work for you, Mike?


No we have almost never sold one cash to a new loan; maybe one in 2003. But this home was so nice, private, large fenced back yard on a 7000 foot lot that we thought we would try it with the governments help. We just lowered the price today and will try a while longer. Then we will switch to your program and probably raise the price. We will try to get a small down and get the government credit and we will carry the paper.

“I would make sure to let the buyers know that if they stop paying on the home or sell it within the first 36 month period that owe that $6k back to the government.” I did not know that and we will need to let our buyers know the consequences of backing out.

I like your ad thanks for sharing.

All of sudden this week end buyers are making a lot of calls and management sold a 1996, 14X66, 3/2 for $15000 with $1000 down to a lease option.

And so on goes the battle.



Your program is for homes WITH the land, correct? These are much more desirable than homes in parks.

Pardon my denseness but is this correct?

  1. You put a contract to buy on a seller’s house basically at payoff plus $2-4000.

  2. Then you find a qualified buyer willing to “pay” that same amount for the seller’s home.

3)You sell your contract to buy to the new buyer for the buyer’s first-time home buyer credit amount (10% or $7500)

4)The new buyer brings $2-4000 to closing to give to the seller.

5)New buyer makes payments to whom?

  1. You collect your money. HOW and WHEN?

  2. Deed changes from seller to new buyer, mortgage stays the same.

I know sub2s are done all the time but it amazes me that the recorder’s office never raises a red flag when an encumbered property changes ownership with no mortgage change.


Hey Steve,

You’re right these deals I have done are on land. Steps 1-3 are correct. At step four, the money brought to the table pays closing costs of buyer. Remaining amount of funds and what to do with them varies deal-to-deal. The first deal I did the buyers brought $3,500 to closing. That covered all closing costs, title work, buyers first month payment, and around $500 to seller.

The new buyer is given a Limited power of attorney at closing from seller for property. The buyer pays the bank directly. Gets an insurance policy in their own name.

I collect my assignment fee once the IRS check comes in. I have a signed promissory note with buyers and co-signer for $x amount. I also get some collateral. Last deal I closed I have a lein on a very nice car. I have a friend who is having his buyers file with a CPA that can direct the money to a specific account(make it payable and mailed to me). I haven’t done this but will on the next one.

On the Sub2 closing, the deed transfers and mortgage stays the same. On the Contract for deed, it remains in the sellers name.

That actually seems like a lot of work when I type it out. But, I am already marketing and direct mailing for the GOOD deals to buy and hold for myself. So, when these leads come in it isn’t much additional effort to do the deal.

If someone considers doing this make sure you work with title company who handles Sub2 transactions and get legal advice. I am not a lawyer, accountant, etc…