Many of our PAPER SOURCE subscribers do “Lonnie deals” (named after Lonnie Scruggs who pioneered the concept) — they buy used mobile homes at a discount for cash and sell them to owner-occupants at higher prices on easy terms.
If you do Lonnie deals, or plan to, you need to know that the Dodd-Frank regulations that went into effect on Jan. 10, 2014, apply to you just as much as they apply to someone selling a single family house to an owner-occupant. (If the buyer will not live in the mobile home, the rules do not apply.)
I confirmed this with my go-to guy on all things Dodd-Frank; Ric Thom, president of Security Escrow, Inc. He says:
“In Reg Z in TILA a “dwelling” is defined as a residential structure that contains one to four units, whether or not that structure is attached to real property. That includes mobile homes. If you use seller financing to sell mobile homes that are attached or not attached you fall under the same rules as selling a site built stick house using seller financing.”
For an explanation of those rules, see Ric’s post at https://papersourceonline.com/dodd-frank-note-business-explained/ (which was first published in the Sept., 2013 PAPER SOURCE JOURNAL).
Ric Thom will be teaching at The Paper Source Note Symposium in Las Vegas April 24-26. For information visit http://papersourceseminars.com/seminars/the-paper-source-note-symposium-cash-flow-profits/ or call 800-542-2270.
