Questions and Answers

Get some of the common questions asked answered today.

Questions and Answers

Is this investment suitable for a 1031 exchange?

Yes it is. Even though the unit is not a piece of real estate it can be registered with the state of Texas as real property and has successfully been used with a 1031 exchange.

Is this investment suitable for use in an IRA?

Yes it is. We have many clients who use this vehicle for their IRAs. We work with the financial institutions to provide them with monthly reporting and transfer of funds to the IRA each month.

What are my upfront costs when purchasing one of our manufactured homes?

The only cost upfront is the unit itself and a $200 closing fee of which $125 buys the maintenance warranty package.

Are there any other costs related to the purchase?

In the state of Texas each manufactured home has a unique label number issued by the state. This is similar to a vin number on a car and works similarly. There is a document we fill out and have you sign called a Statement of Location (SOL). This document transfers ownership from one party to another and includes the location the unit is currently residing. The filing fee is currently $55.00 and would be mailed in along with your signed SOL.

Is the land included in the sale?

The land is not included in the purchase. We currently have a long term lease with the park owners granting us a 15 year lease on the land which will renew automatically at the end of the lease.

How much is the lot rent?

Lot rents are paid by the tenant only. The agreement we have with the management company on the ground is that they collect lot rents from the tenants for which they are fully responsible to obtain and maintain.

Is there a closing or closing costs?

There is a closing cost of $200 per unit which covers the administration fees and buy in on the maintenance warranty package.

How long does it take to finalize a purchase?

In most cases we can prepare all of the documents within an hour. We upload them to an electronic platform where they are emailed to you for review and signature. As soon as you sign them and wire us the funds we are done. It takes 7 to 10 days for us to fully process your paperwork

What documents are involved?

There are five documents used in the transaction. First is a simple bill of sale stating the exact location, unit and label you are buying. Second is the Mobile Home Sales Agreement which outline the details of the sale itself. Third is a Management Agreement outlining the details of our responsibilities in managing the units. Fourth is the land lease and fifth is the maintenance warranty.

When can I expect to start making money on my income producing units?

Rents are collected within a calendar month. (April 1st to April 30th) Any rents collected within that period are run through our reporting system and funds become available usually by the 5th of the following month. April rents get paid out in May.

Funds are electronically transferred to your bank of choosing and a report is sent detailing income and expenses.

It happens that all documents get finalized somewhere within the month, say the 23rd. We would pro-rate the rent starting on the 23rd through the last day of the month.

It is hard for you to know what day your documents were finalized and when your rents start. It has been a source of upset when a client wires funds to us on the 15 and we finalize our documentation on the 23rd. They expect to be pro-rated from the wiring date however this is not possible as it does take a little time to transfer the ownership and no rents are collected for you until all internal transfers have been complete.

How is insurance handled and what does it cover?

The current insurance rate is $30 per unit. We are always working to reduce this cost. It covers Fire damage and general liability. You can always obtain additional insurance if you desire.

How do you handle repairs and maintenance?

We provide a maintenance warranty which covers all repairs on the home. Limitations are only on (Full replacement of air conditioning / heating unit and roof. Replacement of these items is not covered under the warranty.

For those who do not have the warranty repairs and maintenance are handled on site by our management teams at the rate of $20.00 per hour plus parts. They are authorized to do repairs up to $250.00 and are required to obtain written permission for any repairs above $250.00.

What fees do you take out of the rent?

4% of the rent collected, $30 for insurance, $38 for maintenance coverage.

Ready to get started?

For more information or to speak with one of our representatives for more information about how your can build your wealth through investing in Manufactured Homes.