Does A LLC/Corp Need A Dealer License To Sell?
My plan is to form a LLC and buy mobile homes at a deeply discounted price in the State of Texas. I plan to do owner financing and get into the business of holding the notes while selling the homes to eligible people.
Will I need a DEALER'S LICENSE to do this for my LLC? Just to buy the homes with my LLC holding the title to the mobile home and selling it while doing owner financing.
Any help is greatly appreciated! Thanks!
Sounds like you have read the book by Lonnie Scruggs, "Deals on Wheels"
You need to check with your state DMV and see what the requirements are for MH.
My guess is that yes is the answer, this is usally a minimal fee and some insurance or bonding requirements that they should be about to tell you about,
TEXAS
Any person who is engaged in the business of buying, selling or exchanging motor vehicles, motorcycles, travel trailers or trailers/semi‑trailers is required to obtain a dealer license. The Motor Vehicle Division assigns a current valid, general distinguishing number for locations in each city municipality. The main exception is for a person who sells fewer than 5 vehicles in a calendar year, provided the vehicles are titled and registered in such person's name.
New Franchise Dealer License Fees: $175.00 franchise fee plus $500.00 for each required general distinguishing number. Annual renewal fee is determined by number of cars sold in a calendar year
Used Car Dealer License Fees: $500.00 for the first year
$200.00 renewal fee per year
This is what I picked up off the web.
The facts are that th\ere are LOTS of MH investors doing exactly what you envision doing in TX, never getting any kind of license other than Drivers' License.
I sure would NOT recommend you go about getting licensed directly as Dealer, with Austin.
If you decide you prefer not to take any risks as unlicensed investor, then I'd advise you to find a friendly dealer and make arrangements to be an agent in that dealer's shop, under his bond and license. You'll have to share profits with him but you'll avoid the bond hassle, and be perfectly legal.
If you'll get active with the local REI group you'll meet others there who are already doing MH investing, probably 99% as unlicensed investors.
And as far as asking ANY state or fed regulator if a license is needed. what do you think they're going to say?
Do you think they'e EVER going to tell you no?
If so, do you also watch your chimney for Santa on Christmas Eve?
In California issues like this are discussed in the state codes - all of which are accesible on the internet. I would hope that Texas has their codes on the net also. Suggest you read the code - otherwise go to a public library and ask where the state codes are kept. Then you'll know exactly under what conditions a license is required. For example - in California a private lender can make any number of loans with his own money, but if he resells 8 or more per year then he must be licensed as a loan broker, etc. Tens of thousands of pags like this are at your internet touchj and call.
An old Yankee receipe for making rabbit stew starts, "First, catch one rabbit".
In your case, just start buying MHs. You'll see how successful and how much you like this endevor. By then, you will have met many confederates (notice that I mentioned both yankees and confederates) in the industry for further guidence.
One thing I have heard many times is that a Limited Partnership is the cheapest way to form an entity in Tejas.
Of course TX Statutes are online, as is true of ALLstate statutes and federal laws.
Just go to Google or another search engine and type in TX( or whatever state you wish) Statutes and you'll be looking at them.
OK guys here's the skinny!
If you are setting the MHs up on land and THEN selling them owner fin. you will not need an RBI.(retailer/installer liscense) It's perfectly legal to move and reset YOUR OWN PROPERTY.
However, IF YOU INTEND TO deliver, set, tie down, skirt, AC and steps AFTER THE SALE (now your messing with SOMEONE ELSE's PROPERTY) then you absolutely have to have an RBI.
P.S. I've been in the biz in Texas for many years.
If you do decide to get a license the bonding part is not that tough. I believe a few hundred will do the trick with an insurance agent. I almost open a car lot but did not have the money to get enough cars. I sold a few on the side of HWY 290 for a few months and did not set the world on fire. Let me know if I can help more
Hope this helps some
Ted Jr
The RBI is ez. You simply sign up to take the class in Austin. They give the class twice per year. Pay your $$ and take the class/test and get a bond.
Why anyone would want to get into the biz with the market being in the sitution that it's in, is beyond me.
Quote:
On 2003-11-25 11:01, DannyB wrote:
OK guys here's the skinny!
If you are setting the MHs up on land and THEN selling them owner fin. you will not need an RBI.(retailer/installer liscense) It's perfectly legal to move and reset YOUR OWN PROPERTY.
However, IF YOU INTEND TO deliver, set, tie down, skirt, AC and steps AFTER THE SALE (now your messing with SOMEONE ELSE's PROPERTY) then you absolutely have to have an RBI.
P.S. I've been in the biz in Texas for many years.
What I plan to do is do the type of deals like in "Deals on Wheels" where I buy them cheap, fix them up if needed and then owner finance them to people who have decent credit but cannot get a bank loan.
Will I need a license to do this?
Will my LLC or Corp. need a license to do this?
Thanks!
In my opinion I would think you would need a license to do it wether it's your name or a company/corporation. Some states require a dealers license because it's not considered real estate. Plus by offering seller financing is where you may have the problem if a license is required. If you were just renting it, that may be ok. I could be wrong....if I'm wrong can someone correct me.
Thanks
I just read another post where someone said that you can set the homes up in a trust and sell them that way, without needing a dealers license.
Quote:
On 2003-11-25 11:01, DannyB wrote:
OK guys here's the skinny!
If you are setting the MHs up on land and THEN selling them owner fin. you will not need an RBI.(retailer/installer liscense) It's perfectly legal to move and reset YOUR OWN PROPERTY.
However, IF YOU INTEND TO deliver, set, tie down, skirt, AC and steps AFTER THE SALE (now your messing with SOMEONE ELSE's PROPERTY) then you absolutely have to have an RBI.
P.S. I've been in the biz in Texas for many years.
Thank you Danny.
While this MIGHT be the law in TX I would NOT count on it being the law in other states.
As pointed out, the answer to the question is in the state statutes. It's usually advisable to test the waters a bit to see if it's something that you want to get into before you get the "license" After you have a few under the belt, get the license. Period. If you're going be in the business, play the game. LLC or Corp doesn't make much difference, the entity itself usually must have a license, and you as a member or employee usually must get a sales persons license. Big deal. Get it done if you decide to stay in the business. Good Luck