Cash Flow With Joe

Why you need a bill of sale at closing

by | Oct 21, 2021 | Mobile Homes | 0 comments

Why you need a bill of sale at closing


We recently bought a land home deal, which is a mobile home being sold with land. We call it a land home deal because you can buy just the trailer and not the land. This takes place in a mobile community or somewhere else where you own the home but rent the lot it sits on.


Buying a mobile home on a rented lot was something we used to do all the time when we were doing a deal structure called a Lonnie Deal. That’s where you buy the home on a rented lot for cash and then sell it with owner financing. Back then, our typical deal was a purchase price of $5,000. We would do no work to the home but sell it with a $1,000 down payment and then accept monthly payments of $350 for 3.5 years. We would get all of our initial investment back in the first year, and the remainder was pure profit.


This was a great strategy for us. Lonnie Deals have a low entry cost, an amazing cash-on-cash return (Remember, you get all your money back in a year!) and they create great cash flow per unit. Doing Lonnie Deals is what allowed us to get out of the rat race — meaning those trailers generated enough money to pay for our monthly expenses without us having to work for it. And it only took a few years.


Now, I love Lonnie Deals. But they have a downside. They eventually pay off, and that cash flow disappears. Because of that fact, we began investing in land home deals.


The reason for that is land home deals have a lower entry cost than other forms of real estate, especially if the home is not on a permanent foundation. They are taxed lower and have cheaper insurance costs. And in our area, our land home deals rent for about the same as our stick-built houses.


This makes it an attractive investment.


So, in case you do decide to buy one, I thought I would share some things with you will need to know for closing.


First, because real estate is involved, you will be closing a land home deal at an attorney’s office. By contrast, mobile homes are personal property, so, Lonnie Deals do not require an attorney closing. But when you add land, an attorney is needed to make sure the title is clear and to prepare the deeds.


Now, before you get to the attorney, you need to ask your seller if they have the title to the mobile. This is important. As mentioned before, mobile homes are personal property and not real property. That is the reason they can be moved from place to place. But they can become “fixed” to real property. Once this happens, the home can no longer be moved and is always conveyed with the real property.


If the sellers have a DMV type title, the home is not fixed to the property. This isn’t a bad thing, especially if you plan on keeping the property forever. But if you plan on selling the land home deal anytime in the future with FHA or VA financing, the title will need to be retired and the home fixed to the property.


Many times, when I ask my sellers if they have a title to the mobile home, they produce the deed they got when they bought the house instead of something from the DMV. A good rule of thumb is to look at the legal description on the deed and see if it mentions the mobile home. This is normally at the bottom and gives the make, model, and serial or VIN number.



But even if the mobile home is mentioned, that doesn’t mean the title has been retired and the home is permanently fixed. The only way to find out for sure is to have your attorney look for either an affidavit of affixation or a T-234 (which is the document adopted by the state in 2003 to say a home is permanently fixed) when they run the title.


Either way, go ahead and get a bill of sale for the mobile home prepared for closing. If there is no title and no T-234, you will need a bill of sale to get a title bond to then go through the process of getting a new mobile home title issued.


Joe and Ashley English buy houses and mobile homes in Northwest Georgia. For more information or to ask a question, go to or call Joe at 678-986-6813.


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