Manufactured or Mobile Home Notes
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Manufactured or Mobile Home Notes - Unusual Investing
Notes secured by manufactured or mobile homes are a high risk high reward adventure. As I write this, the big commercial lenders have packed their bags and pulled out of this market. The losses were large and they go through cycles. In a few years the commercial guys will have new staffs who haven't learned the painful lesson that Mobile home lending is dangerous. Then the cycle will start all over again.
In the meantime private investors who know how to play this game can profit. Right now someone with a used mobile home will find it almost impossible to borrow against it. The home will be difficult or impossible to sell because the new buyer won't be able to get financed. Dealers will still be able to finance buyers of new homes through their captive finance companies, but this puts further downward pressure on the used home market.
Folks that went for the nothing down deal in the last five years probably have no equity and may have an extremely difficult time selling. Private lenders who are willing to learn how to protect themselves in this environment can make all the loans they can afford at favorable rates.
The time is right for private lenders to facilitate sales by distressed owners by offering to buy owner financed notes at closing. If this doesn't make sense to you, you can read more about the ins and outs of owner financing here.
Never forget that mobile homes have wheels! Even if they are on a permanent foundation they have been known to move overnight. They are also much more fragile than site built houses. Water is especially damaging. If the occupants don't pay attention and spot leaks quickly the water can destroy floors in a matter of hours. Some of the risk in buying these notes is the value which can dissapear while the note holder waits for the courts to foreclose and evict.
