Mobile Home Note/ Paper Question
Ok,
New to this. Here is my question. A freind (and investor) wants to sell me his mobile.
His cost to me: 7000.00
He has a note with current lesee for $8400
The terms:
THe lesee pays $610 per month. Of that $300 per month is for the mobile. $310 is lot rent.
Of the $300 only 100 goes to principal. The rest is interest!
That is roughly 40% interest annually!!!
Could I take the note which effectively is $25200, and sell that? What should I expect from a 40% note.
By the way she has been renting/leasing for the last 40 months....
Thanks,
Clint
You could sell the note. But mobiles with out land attached are a harder sale because it is looked at as a car loan. Also take into consideration the age and size of the mobile as well, and what an appraiser would appraise it at. These are the factors that a note buyer will look at before purchasing the note. Depending on these factors and the credit score of the buyer, is what you will get for the note.
One other thing you may want to look atr is the document itself, is it truly a mortgage document? at 40% interest that pretty much throws all laws I know of out the door, unless its a lease or rent to own, in which case it isnt a mortgage.
Sounds like its a good long term investment purchase, but not an easily resalable item.
Good Luck,
Kyle
Thanks Kyle,
Yes it is a lease/option rent to own purchase.. Thanks for the heads up.
Clint
I would check your states laws on "usury" the maximum allowable interest.
In some areas this won't apply. Also keep in mind that a mobile is a car for all intents and purposes and that there are different rules.
Generally if it isn't on a foundation since it is not "real" property it is easier to boot out a non paying buyer/tennant in many states.
IF she has been paying for 40 months that is a seasoned loan.
Depending on what the value of the trailer is who wouldn't be interested in a note that paid even 20% interest per year secured by reasonable value.
At 40% you should have a lot of takers, heck I would jump on it if it pencils as you say and it were closer to me.
Luck!
[addsig]
ANother thought!
I charge 30% on late payments in my construction company and have had no problem. Simply because I have a contract that they customner signs and agrees to.,..