In today’s Mobile Home Investing Lesson Podcast episode #29, I’m proud to welcome back to the show a mobile home investor and brand-new restaurant owner, Robin. In today’s 43-minute podcast episode we discuss how, where, and why Robin was able to sell 13+ of her mobile home notes to fund a dream restaurant.
Robin is gracious enough to share what she has learned assigning her mobile home notes and growing her business moving forward. Learn from our mistakes and successes when it comes to helping sellers, buyers, and creating value with local mobile homes.
In this mobile home investing podcast episode below, we cover:
- 1:06 Why are you on today’s podcast?
- 2:20 How much capital did you need to raise to make your dream restaurant a reality?
- 4:40 How did you find your note buyer?
- 8:03 Finding more homes for this note buyer moving forward.
- 8:50 Personally guaranteeing for the first 6 months.
- 11:04 Thinking outside the box.
- 12:50 Are you worried about this note buyer purchasing future mobile homes in parks you’re already inside of?
- 17:00 What due diligence did the note buyer perform on you and the homes prior to purchasing the notes?
- 20:14 How did the note buyer actually take control of these notes and payments?
- 20:40 Did you get any push-back from your existing tenant-buyers?
- 20:38 Did you guarantee the note payments to the note buyer?
- 25:30 Did your mobile home note buyer have to get approved in the mobile home parks your homes were inside of?
- 30:40 How much did you discount each note to the note buyer?
- 35:05 Know your worst-case scenarios.
A special Thank You to Robin for sharing her story and journey with us.
Throughout today’s podcast we are really not discussing Robin’s acquisition techniques, profit figures, repair costs, management concerns, etc. We are mainly discussing selling the mobile home notes you worked hard to obtain. Below are some bullet points from the podcast episode below.
Negotiating
In today’s podcast episode Robin admits it took multiple phone calls with the note buyer before arriving at a win-win purchase contract. This is not uncommon when dealing with logical and rational note buyers that wants to do their due diligence and understand just what they are buying.
Although Robin very much wanted this note buyer to purchase her mobile home notes, there were a few times she was quick to negotiate for the best deal. These times include what price to sell each note, guarantees made after the sale, closing dates, and more.
Guaranteed mobile home payments and default.
There are no cookie-cutter type situations when it comes to most real estate investments. This author has been apart of deals where the note buyers purchased only partial note payments, or the first 20 note payments only, or a specific dollar amount of the note (at which point the note payments revert back to the original investor or someone else). Likewise, there are no cookie-cutter guarantees unless we make them this way.
In the podcast below, once Robin’s note buyer took possession of these notes, Robin agreed to:
✔ 3 months guarantee that all the payments would arrive on-time to the note buyer for the first three months. If these payments were not made by the tenant-buyers, Robin would make these payments to the note buyer herself.
✔ 6 months guarantee that Robin would also assist the note buyer with filling any vacant mobile home, should they become vacant again or were currently vacant.
Since 2 of the mobile homes were empty at the time of sale, this guarantee helps make the note buyer feel more comfortable and protected while the homes are filled and notes are seasoning with low-risk payment buyers.
Selling future mobile homes to your note buyer.
In today’s podcast Robin negotiates purchasing future mobile homes for this note buyer for a fee. These negotiations should end with a win-win arrangement both parties are happy with, however you should especially be happy as the investor doing most of the legwork/action. Robin’s example is a great reminder to continually be asking, how we may help the buyers, sellers, other investors, Realtors, park managers, etc that we come across daily.
Due diligence from the note buyer.
Robin discusses that the note buyer wanted to view her state ID, license, previous closing paperwork and more. The note buyer also wanted to inspect the properties once a purchase contract was drawn up and earnest money deposit. The note buyer would not have been interested to perform his due diligence unless his projected ROI wasn’t substantial.
Pro Tip: Whether you are the note buyer or note seller, if unsure of your next actions, obtain the help of a real estate attorney in your area when selling/buying notes.
Due diligence from the mobile home investor.
Robin was eager to get this deal closed. With that said she did not want to waste any time with someone that was not serious. Once a price was agreed upon Robin requested a Purchase and Sale Contract be signed and earnest money of $10,000 be deposited quickly. Once this was done Robin felt much more safe and secure that the note buyer was serious and moving forward.
Pro Tip: Aim to under-promise and over-deliver when it comes to your note buyers. Be available via phone for this person before, during, and after your deals are done.
Paperwork & Procedures: This specific podcast lesson does not discuss the specific processes, procedures, or paperwork while reselling a mobile home for monthly payments and/or selling notes. Depending on your specific state and exit-strategy there are likely laws and procedures before, during, and after closing that should be followed.
