Mobile Homes & Tax Sales

Transcript:
Hey there it’s Casey Denman from Tax Sale Academy.com and welcome to this week’s quick tip.

Today I want to talk about mobile homes available through tax sales. This is a topic that comes up from time to time and it’s important to understand that you must approach your mobile home investments with caution.

Now I have nothing whatsoever against mobile homes as an investment. In fact, if you’ve read my book, and specifically the back cover, you might know that my very first investment was an 840 square foot single wide mobile home. So I’m all for them. But there are some things that you must keep in mind.

Now, before we continue, I want to discuss two types of property: we have real property and personal property.

Real property is simply real estate. When you buy anything at a tax sale you’re buying the legally described real estate. You’re buying the dirt. It might have a home that sits on top of it, but you are buying the land. That’s real property when it comes to tax sales.

Then we have personal property – these are things that can be moved. Clothes, jewelry, cars, that kind of thing. These are not sold at tax sales. They are not selling you the old nasty furniture that was left in that house you purchased at a tax sale. They’ll sell you the real property, the real estate, but not the personal property.

The issue comes into play when we discuss mobile homes. Mobile Homes are moveable, they’re mobile. And they could be considered personal property. They could also be real property. For example, if you go to a mobile home dealer and buy a mobile home, it’s considered personal property. Now, once that mobile home is permanently attached to the ground it is considered real property. It varies just a tad from state to state, but in Florida for example the law says A mobile home is to be considered real property only when the owner of the mobile home is also the owner of the land on which the mobile home is situated and said mobile home is permanently affixed thereto.

Essentially, the owner of the mobile must permanately affix the mobile to the land. This could mean you have to remove axles, trailer tongues and you’ll likely apply to get that mobile to be considered real property, as one with the land that it sits on.

Now, when you’re purchasing a property with a mobile home on the open market it’s very easy to go through the proper steps. Everything will usually be verified by the title company, including the fact that the mobile is considered real property, along with all of the other requirements. If something goes wrong, you and your seller can work through the issues.

When it comes to tax sales, however, it’s a little bit more difficult. The seller is the county and they are simply selling whatever it was that they foreclosed on – and they might not even know if there was a mobile on that property or not.

You have two primary issues here to watch out for:

First off, and this I’ve seen a number of times is, that mobile home you see on the property or saw in a picture of the property from last year might not be there after you win the bid. Mobile homes, especially the more mobile park type models can get hauled off the land. And, in most states, as long as it’s done prior to the auction, it’s legal. Imagine driving up to your land only to realize that your home had been towed away!

Another issue is if the mobile home was NEVER permanently attached to the land. They could’ve moved it in without permits and without going through the steps to attach it to the land – so it’s still considered personal property. So you might see a nice single or doublewide on the property, but you don’t own it. You own the property that it sits on, the real property, but not the mobile home as it’s still considered personal property.

So how can we combat these issues? The answer is through proper research and even then, there are no guarantees.

With most research you can start online. Review the property assessor’s report and all other county data you can on the property and the mobile. Learn when the mobile was moved onto the property. If it doesn’t mention a mobile home in the county docs, but you see one on the land, that’s probably a red flag for you that it won’t belong to you should you buy the property. I’d also recommend calling the county to ask what the steps are when it comes to installing a mobile home and ask them how you can verify those steps were properly followed. This will, at least, give you a way to verify that the mobile is considered real property and not personal property.

As far as the mobile home being removed from the property prior to auction, this will require you or a scout driving by the property and I’d recommend you do this as close to the auction as possible. You can generally tell if a mobile is ready to be removed. Look for signs like skirting removed, decks and steps moved, unhooked pipes, trailer tongues, axles, tires, that kind of thing. These are all signs that can help you determine if it’s being prepared to be removed from the property. Now, there is not definitive way to know whether someone will work through the night and have a truck there the morning of the auction to haul it away. But if you drive by as close to the auction as possible, the better your chances are of it being there after your purchase.

Mobile homes can be solid and wonderful investments. As tax sale investors we aren’t provided with the same guarantees of those sold on the open market. So this means we have to put forth a little more diligence on our end and that’s perfectly ok. Just understand this going into it, use caution when it comes to mobile homes, due proper diligence and you’ll see success in no time.

I truly hope you’ve enjoyed today’s tip and you’ve found it helpful. If so, do me a favor and click that thumbs up button and be sure to subscribe to my channel so you don’t miss out on future tax sale training videos.

And if you’re looking for more information and trainings on tax sale investing, just head on over to TaxSaleAcademy.com. If you enjoy these training videos on YouTube, you’ll love our comprehensive and step by step training videos we offer through the academy.

Take care and make it a successful day.