We have a double-wide that we are trying to sell. It does not qualify for a conventional mortgage, because it has been moved. We paid for it in cash, but we are finding that there aren’t many cash buyers interested in this area. Two options are for us to carry the mortgage or to just rent it.
Thoughts?
By carry the mortgage, I assume you mean you basically lend the money to a buyer under a contract. Back in 1980 we did that for a house we owned. That was when mortgage interest rates were in double digits, and the housing market where we lived crashed.
It worked for us. They guy who bought the house was super responsible, and even express mailed a check when he was late. We were renting where we moved, by choice. The contract said that he had to refinance when the interest rate dropped below 12%. (Yes, that was low then.) But we were lucky. We even made money on the deal.
Are you ready to get a lawyer to write up a tight contract? Do you understand what you’d have to go through to evict him if he stops paying? Would you be able to do a credit check? Can you get enough interest to make it a good investment?
If you rent, is there an agent who handles rentals near you who might handle the rental for a cut?
Why does the buyer have to pay cash directly - couldn’t they get a loan and pay you cash while having a standard mortgage?
Thanks for the tips.
For some baffling reason, once a mobile home has been “sited,” it doesn’t qualify for a mortgage if it’s moved again. VA will do it, but nobody else.
Same questions whether renting or carrying the note.
Didn’t know that. So you might be stuck forever.
Some states make evictions very, very difficult. When we bought a house in NJ, the people in it couldn’t move, because their house being built in town was late. That was fine with us since we lived in an apartment with a month to month lease only a few blocks away. We bought the house, but with a very complicated contract drawn up by our lawyer where they did not rent from us, but reimbursed us for our mortgage, and had a “rent” increase that was disguised as a penalty for them being late in moving out, which they were fine with. It worked out fine since their son was in our daughter’s class in school, but it was quite complex. The reason for this rigamarole was that if we established a landlord/tenant relationship we’d never be able to kick them out if it came to that. The way we did it made it possible.
For some reason we’ve never had an easy house purchase or sale.
Another question - what is the market like in your neck of the woods? In a lot of places a relatively inexpensive mobile home might be very desirable. I know you said there aren’t a lot of buyers interested, but do realtors in your area list such things? You might get lucky, but if you need the cash flow from the rent/mortgage and they stop paying you might get squeezed.
The area where we have the house is popular with hunters and outdoor enthusiasts of all kinds. It’s much cooler than Phoenix, so it’s a popular area for 2nd homes. That said, it’s fairly amenity-free, so whoever buys it needs to make their own entertainment. It’s outside of the town of Williams, AZ, which is nothing but bars, bad restaurants, and motels (at least according to my wife). There has been a fair amount of interest in it, but the mortgage thing is really gumming up the works.
You might consider a rent to buy type of deal to give the buyer an incentive to pay off the trailer and maintain it.
That sounds like a great idea.
I did consider this as an option while renting out a house I owned. I think I’d put a large part of a monthly rent toward ownership if they pay the off remaining balance in a fer years. Something like 3-5 years depending. After that less of their rent would go toward a purchase.
Banks make money on the interest they charge. I’d rather recover the value of the property as quickly as possible. I don’t know what this trailer is worth but I’d try to put someone in the position where they could own it outright by paying off the balance with a credit card or simple loan. I’m sure a lawyer who could draw up a private mortgage contract could do this also.
It’s probably too much money for that.
We have it paid off, and are listing it for $325K. It sits on 1.3 acres. It’s 1,800 sq. ft. 3 bed /2 ba.
Yeah, that’s a tough load to carry. What kind of rent do you think you can for it? Will you have to hire people to do maintenance, and is it far from you so you might need to hire a local manager?
I honestly don’t know. We haven’t done a lot of research on renting it, so I don’t know what the comps are. It’s a couple of hours away, so we would probably have a local management firm handle it (I had to drive up and light the pilot light one time when my wife let a friend use it - that’s 5 hours round-trip for 10 minutes of work).
if you talk about the pilot light of the flow-through-waterheater (calefont in some places) … ours is pilot-less and has a piezo element making the sparky-sparky part.
There is no battery for the piezo element, it is powered by a tiny turbine in the waterflow that creates the energy for the spark. Works like a charm for 14+ years now …
just throwing that in, as it was by no means expensive (150-200ish at that time) … heck, saving you 2 trips might recoup the investment (let alone the loss of time)
The house has propane forced-air heating. The furnace is quite old, and uses a pilot light to ignite the propane. I’ve looked at upgrading it to electronic ignition, but I’m clearly not going to bother with it at this point.
I guess I’d talk to realtors in the area. They may handle rentals also. At least you’ll get some ideas of rents and sale prices. Hopefully mortgage rates will drop soon and make the property more attractive.
Don’t really know what this means. In your case it’s real estate, a home on developed property. Just curious about this. Why wouldn’t it qualify for a mortgage?
I have no idea why.
Gateway to the Grand Canyon! I’ve stayed there a couple of times on my way to the same (after a 14 hour drive from CA). Yeah, the town itself is nothing to write home about, but as a vacation rental it might seem a lot more attractive than a cheap hotel. You’d probably want a local property manager, buy you might be able to make at least a seasonal profit as a VRBO/Airbnb set-up.
Is there a potential dodge available by ostensibly selling the 1.3 acres as part of a land loan (land equivalent of a mortgage) and just throwing in the double-wide as part of the sale as an “improved lot” at a similar cost?
That’s interesting. I’ll have to look into that.
ETA: This is what I like about this area. I took this just down the street from the house:
Stunning!
I remember when I was kid the night sky used to have all those white things in it.
It looks like the ‘moved more than once’ thing purports to be a matter of public interest. It assumes the structure was properly installed and inspected the first time it was moved from the factory to a site. If it’s moved again there may be no way to determine it’s actual history and compliance with state and federal laws concerning homes and mortgage laws. A rat’s nest of regulations state by state make this difficult to generalize however I did see companies in Arizona offering mortgages and other forms of loans on manufactured homes even if moved more than once.