Article Title:		TIN CAN ALLEY - The Stairway To Heaven?
	Author:		David Butler
	Website:		www.notenetwork.com
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Do you feel like it is impossible to find good notes? Does it seem like you are competing against hundreds of other brokers every time you make an offer to a noteholder?

All of us dream of the opportunity to buy good notes, earning great yields, with almost no competition....

Well, dream no longer! There is a very nice little niche in the private paper industry where you can purchase a heaping helping of all the good notes you can handle, without fighting for your place in the bread line - and that niche is...

... mobilehome paper!

"But those aren't real estate notes!", you say. So what! Actually, some mobilehome notes are real estate notes too, but it really doesn't matter. There are enough similarities to make the crossover easy for any broker, and they are an excellent fit. And consider this - right now, today, there are note brokers who are funding anywhere from 10 to 300+ mobilehome notes each year, and making $6,000 to $100,000 or more in doing so.

At the same time, their investors are happily digesting well secured 13% to 40% average yields on these notes... and some are occasionally hitting up to 70% or more on their returns through restructuring, partial purchases, and distress sale situations...WITH VERY LITTLE RISK!!!

Now Consider This...

The truth is, about 5,000 people go through note broker classes of some sort, every year. Yet only 2,000 or so individual note brokers, in total, are doing any note deals at all, and it is estimated that approximately only 500 to 700 of them are making any kind of a living from it.

Many of these folks are lured by the promise of easy riches, which really aren't so easy. Others find out that dealing in financial markets just isn't their cup of tea. A great many aspirants take the courses, but don't take the time to find out how the note business really works. A large portion I suspect really aren't that comfortable dealing with people, or the negotiation process that the business requires. And then, there are those who just can't, or won't, do their homework - so their deals don't close and they give up. But for too many of us, the problem is finding the notes!

Does the idea of having a crack at 43,000 or more notes each year (that hardly anyone else is looking for) - appeal to you?!?

Bounce this thought around inside your head for a minute - roughly 900,000 used mobilehomes are being resold every year, in a market with limited financing. Although I haven't seen any research to verify it, I believe it is safe to assume that at least forty percent of those resales can be attributed to used mobilehomes in parks.

And you thought the notes weren't out there anymore? Or do you think there are too many brokers now, out shaking the same tree for business?

The mobilehome note arena is a marketplace that is vastly overlooked and somewhat mysterious for most note brokers, and investors too for that matter! And when I speak of mobilehome paper, I am primarily talking about notes that are secured by mobilehomes located in mobilehome parks. These notes are not real estate notes per se, but they are negotiable cash flow contracts secured by residences, so they do have a very common bond with real estate paper.

"But it's not real estate!", you say. Well, while mobilehomes have traditionally remained personal property (not permanently affixed to and owned together with land), they exhibit many of the characteristics of real property. They are year-round, single-family dwellings. They have long remaining physical life spans similar to site built structures. More often than not, they are never moved from an original delivery site. The major difference is that there is no land title involved.

Strangely enough, what little difference there really is makes for a big difference in the profit structure - averaging more than double the returns available for similar real estate deals. And if bought right, these notes are no riskier than any of the other types of notes you are used to purchasing!

Mobilehome notes are bought and sold with very similar analytical procedures and title transfer protocols as real estate paper, with only slight variation. Lien perfection, recordation, orderly foreclosure processes, assignments of interest, insurance coverage, lender in possession, etc., all run along the same lines as the more traditional real estate notes to some degree, so experienced note brokers should be able to do both kinds of note transactions fairly easily.

Advantages

The most notable difference for note brokers? Competition!! There are not many major players in the mobilehome note field, either as investors or as brokers. The broker that knows how to get in there and deal with buying and selling these mobilehome notes will have virtually the whole market to himself in any given community.

Not only can the used mobilehome note niche make a huge difference in the success of your note business, you will find that it can be a very lucrative specialty all by itself. And it offers the added advantage of giving you more deals to close. Never overlook this power of momentum. Besides putting meat on the table, closing deals is what we live for. Each closing builds on itself, reinforcing our spirits and our desire, stoking our competitive fires to move forward toward closing more deals!

Having a steady diet of mobilehome notes to work with can give you a never ending series of small victories... and occasionally you will have the opportunity to work on larger portfolios of these notes - which can generate huge profits. In fact, the gentleman who got me into this part of the note industry just recently made $76,000 on a mobilehome portfolio transaction, and two years ago, he had the good fortune of picking up a $64,000 A paper note on a double wide mobilehome, for only $5,000! Hmmm.... I wonder what he had to pay in taxes?!?

And even as I am putting the finishing touches on this manual here in December, a close friend and associate of mine is just completing the closing of a 25 note mobilehome portfolio for $1.1 million dollars!! This is a multi-broker deal, and represents at least the third good sized portfolio that my friend has done during the past three years! I am not privy to the commissions lying on the table, but I am willing to bet those guys are splitting somewhere between $25,000 and $75,000 on that deal alone!

I've not had that kind of huge success, but I am happy to take the nice steady flow of business that mobilehome notes have brought my way!

What are some of the other advantages of working notes on mobilehomes in parks? The real biggie, in my mind, is that you have three extra layers of protection for the notes:

• free park management that is keeping an eye on things for you everyday, whether they know it or not
• less isolation than most mobilehomes on land, so less chance for vandalism or owner waste to the property
• parks want monthly lot rent, and this will usually keep you more up to date on default situations, than private 2nd real estate mortgages, so you can move faster to protect your interests.

  There is a whole plate full of other advantages as well:

• a lot more notes available proportionately in mobilehome areas because there are not many lenders financing this kind of loan, particularly for older manufactured homes
• captive markets in the form of mobilehome dealers and park managers who also have a vested interest in the ability to obtain mobilehome financing to protect their own businesses and cash flow
• significantly larger yields on invested funds due to the limited playing field, and due to the higher degree of perceived risk by both the public and the institutional lending markets
• ability to enhance yields due to more opportunity for restructuring note payment rates to speed up the receipt of the discounted yield spread premium; or through partial purchase, split funding options
• high frequency of early payoffs, providing further opportunity for overall yield enhancement through quicker receipt of discounted yield spread premium
• many smaller notes to work with which allows you to spread your risk over a broader base, and makes them easier to resell to private investors
• less expense in titling, escrow, recordation, transferring, and repossessing the security.
• More geographic concentration of notes and noteholders, so you have an easier job of marketing to get the notes to work with in the first place.

They say that "Money doesn't grow on trees" - and they are right.

But if you look closely enough, you'll discover that there sure is an awful lot of it hiding in the bushes!

If a fellow made up his mind to get out and shake the bushes a little bit, does it seem sensible to conclude that he would find there are likely to be at least another 350,000 private notes coming into the marketplace every year, in the form of used mobilehome financing? Can a reasonable man conclude that the odds are high that at least 1 in 8 of those notes are available for sale at any given time, or at least would be if the potential note seller knew he could sell them? So I'll put the question to you again:

Does the idea of having a crack at 43,000 or more notes each year (that hardly anyone else is looking for) - appeal to you?!?

My guess is, that if you put your mind to it, you would soon discover that there aren't 300 note brokers in the whole country seriously out there scrounging up used mobilehome notes. Given those kinds of odds, does it seem reasonable to you that a guy who focuses on this little niche could harvest 15 to 50 note deals every year, just from this one resource?

The notes are there - but you have to get out there and find them! And if you want to take the easy road first, TIN CAN ALLEY is the route to take.

For more great articles or to order Tin Can Alley - The Complete Guide to Making Money In Mobilehome Notes , visit America's Note Network at www.notenetwork.com

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