- Welcome back guys, hi, it's Clint Coons here.
And in this video we're gonna discuss
mobile home investing
or that is how to structure it.
All right, let's get started.
(exciting music)
Okay so, mobile home investing,
what are we gonna do with that type of investment?
Do you need a corporation?
Do you need a limited liability company?
What does it take?
Does it take a land trust?
I mean, there's lots of questions
that oftentimes surround this type of investing.
I know I've received a lot of emails recently
from individuals interested in mobile homes
'cause let's face it, those are like mini ATM's.
When you invest in mobile homes
they just start throwing off cash flow.
I actually was able to take down
my first mobile home park this year
and now that I've got a taste for it,
it's something that I wanna keep doing
because it's a great way to generate income.
However, how are we gonna structure that?
Because with mobile homes there is some liability.
Now keep in mind when I talk about mobile homes,
I'm not referring to, you know, the manufactured homes
or the modular homes, where they come in,
you put it down on a foundation,
we're talking about the traditional mobile home park here.
How would you go about structuring that?
Well, first off, you understand that
many times when you're buying a park,
there are two different components to it.
You could get the land, the pads themselves,
and the trailers are gonna be owned by the residents,
or maybe you're actually picking up
a few trailers in that as well.
So, you're gonna own the trailers,
so not only are you renting the pads,
you've got the trailers you can rent to people,
or better yet like I've done,
entering into an installment sale
and sell the trailer to the individual
and rent them the pads.
So, as you can see,
there's a lot of ways to make money
and really good money off of mobile homes.
But structurings got to be really important
because there can be some liability
depending on if you own the trailers
that you're renting to the individual
or you're selling to the individual,
who you have managing the property.
So what we want to do is take an approach
where we can minimize our overall risk exposure
to this particular type of investment.
So, how do we set it up?
Well first off, if you're just buying the land
with the pads, then I would create
a limited liability company right here,
like you've seen many times be discussed in my videos
and its at this LLC up in the state
where the park is located.
So here's my park, I got all my pads right here.
It's all owned by this one LLC.
Now, if you want anonymity,
remember I talk about anonymity
that you can set up your LLCs
if you use a Wyoming holding company
to own this limited liability company.
So what you might consider doing
before you actually set up the park,
is you set up that Wyoming LLC down here
and this is, oh this pen's kind of dying here,
Wyoming, go back to this one,
Wyoming LLC, that's going to own 100% of that park.
So, this is my Wyoming limited liability company here
and it's gonna own 100% of the LLC
that's gonna own my park.
So this will give you the anonymity
and I got plenty of videos discussing this strategy.
So I'm not gonna go any more detail than that.
Be sure to check those out
if you wanna know how to create a structure
so that no one knows that you're actually owning this LLC.
All right so, we've got my LLC set up to own the pads.
Now, let's assume that you get the trailers,
you get a few trailers with it.
You have 15, 20 trailers.
What are you gonna do with them?
What I like to do in that situation,
is I wanna separate them out.
I don't want the trailers to be owned
by the same limited liability company
that owns the actual property and the pads itself.
Because if I'm renting those to people
or I'm selling them, lease option,
whatever you're doing with those trailers,
who knows what kind of bugs and stuff are coming with them.
So, I'd hate to have that claim brought against my LLC
that owns my valuable asset because a trailer
happens to have some mold issues on it
that I didn't know about,
that now I'm renting to someone
and they say they have respiratory issues.
So with the trailers, what you could consider doing
is setting up a separate LLC.
So this is a separate LLC
that will hold the actual mobile homes itself.
Now, in this case, what you're gonna do
is you're gonna have a tenant that comes along here.
So, let's say this is an individual here.
This LLC is going to rent them the trailer.
This LLC is gonna rent them the pad.
See what happens here?
You've got an LLC renting the trailer,
LLC renting them the pad.
So, you could structure it where
they have to make two payments.
One to the LLC that rents them the trailer,
a second to the LLC that rents them the pad.
Or maybe you do this.
Maybe you just have one LLC agreement
between this LLC, trailer LLC, and the tenant,
and then you have a sub agreement here between these two.
Either one, whatever's more comfortable for you.
What do I mean by sub agreement?
That this LLC here is renting the pad from LLC,
let's call this one LLC number one.
So, LLC number two, rents the pad from LLC number one,
puts a trailer on it, and then it rents it
as a package to the tenant.
So now the tenant has a claim against this company,
not against LLC number one,
should something go wrong with that.
How about on the sales side?
Same thing here.
So, let's assume that you're selling
the mobile to the actual tenant that's there.
They're gonna be the homeowner.
In that case, if you're selling it to them,
then you're gonna want to sell from LLC number two
and you're not gonna have this rental agreement here.
They're gonna buy the trailer, put it on a pad,
and then they're going to pay rent to LLC number one.
So now, you're collecting the sale proceeds
of that trailer on your, typically these are done
on installments with a little bit down.
You're collecting the sale proceeds through LLC number two,
but that tenant is paying a rental fee
to LLC number one for the pad.
I hope this makes sense.
I know there's kind of few moving pieces here
that take place with this.
Now, there's maybe one other component
you might want to consider.
If you have an onsite manager,
maybe you set up, depending on the size of the park
that you're getting into, maybe you have a separate
entity set up over here for saying, this is my Corp.
And maybe it is the onsite manager
for this mobile home park.
And that's where if you're going to employ someone,
you would employ them through that corporation
to deal with all the individual
residents that are inside of your park.
So anyways, when it comes to setting up mobile homes,
you can see they can be complicated, or can be simple.
It could be as easy as just setting up
one limited liability company to own
the property and the pads.
If you're getting the trailers,
maybe it's two limited liability companies.
And, oh by the way, don't forget about the Wyoming
if you want the anonymity.
And if it's a little larger
and you're gonna be onsite management,
taking care of everything,
then possibly look at setting up a corporation
to handle all of that.
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make sure you subscribe, throw a like up there.
If you've got any comments,
put them down below, any questions,
I like to monitor it and make sure
that you're getting your questions answered,
so you can move your real estate investing forward.
Take care.
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