How Buyers Are Getting $0 Down Manufactured Homes Using Land Equity (FHA Explained)

Hunter Nall (00:00)
I would relate our product to, you know, as most investors are rent and repeat kind of guys. So they get in a habit of doing the same type of deal, the same type of investment over and over and over. And the investment has to equal one or two things: ROI, you’re looking for cash flow, you’re looking for money back. So that that’s why the investment exists. When we bring our option to the table, it’s like these guys have been eating the same meal over and over, except now they have something that costs substantially less, they can get it way faster. They just didn’t know it existed—

Dylan Silver (02:06)
Hey folks, welcome back to the show. Today we’re joined by Hunter Nall in Abilene, Texas, a real estate investor and housing professional with Titan Factory Direct, where he focuses on helping families access affordable housing solutions across the state with experience spanning investing, new construction, BRRRR projects, fix and flip, and rental properties. Hunter combines real-world investing experience with a passion for creating affordable homeownership opportunities. Hunter, thanks for joining us here today.

Hunter Nall (02:37)
Thanks for having me, Dylan

Dylan Silver (02:38)
Now, there’s still a lot of mystery surrounding land ownership, land home packages, mobile home ownership, and the financing that’s involved. And this comes not just from the general public, but also from real estate agents and professionals in tangent segments. So I’d like to start there. You know, for folks who are looking at potentially mobile home ownership versus you know, maybe a single family home or a tiny home. What’s the process like for purchasing a mobile home?

Hunter Nall (03:11)
That’s great question. And and I think that’s kind of the the main question that majority of our clients come to with is like where do we start? And you know, with our company, I I think we’ve done a really good job of being able to answer that. That question and provide services that can take you from the the starting point all the way to the finish line. So I would say that the main starting point would be identifying where we’re going. You know, the the key piece to the puzzle for our our business model is the land. Who— the man who has the land is the man who succeeds. And so our clients will come to us most of them with land and they will have a piece of property, whether it’s family property, whether it’s land they’ve inherited, whether it’s land that they’ve owned or they’ve bought or own or finance land. They’ll bring that land to us and then we will take them through our traditional process of of informing them of what services we offer, what models we offer, what type of financing offers that we can give them and so we just we build a package for them. And then there are the clients, of course, who come in who don’t have the land. And so depending on the area that the customer is needing that, here being in West Texas, land is actually very affordable still, which is not common across the state of Texas. but here in the Abilene, West Texas area, land is affordable. And so we have subdivisions that we can take clients. we have, you know, half acre to acre, 10-acre parcels where we can actually put that land under contract for them, bundle it all together, do a— an FHA loan or a conventional style mortgage or owner finance the land and do what’s called a chattel loan, home only loan on on the on the home itself. There’s a lot of ways that we can skin the cat in our business. And so there’s— there’s a lot of options when it comes to home placement. And then of course there’s there’s most towns, most places in Texas, they have communities, mobile home communities. And you know, it’s there are still this some out there that of course are like you know, grandma’s trailer park is we like to refer to. and there are still some of those out there. However, most clients that we work with, they want to go to a higher end style community. And here in Abilene, we have some of those. We’re in the process of developing some of those. We have locations in Austin, Georgetown, San Antonio, Elmendorf, Oklahoma City, Willis so we— and New Braunfels so in most of those communities, there are some higher end developments that these clients will come to us and they don’t want to buy the land or they— they have a specific price point that they want to be within. And so we’re able to place them in those communities as well. So no matter who’s coming to us, whether you need the land, you have the land, or you don’t want to buy the land and you want something just plain and simple, just the home per se, we have a solution for those people.

Dylan Silver (06:49)
Like to dive in for the folks who need the land, right? Because this can be sometimes trickier. And let’s say I’m going to some dealer who may not have that capacity. You may feel like, okay, well, the dealer doesn’t have the connection here, so I’m kind of up a creek without a paddle because I need a place to put the the land on. For folks who are in this situation, needing the land. You mentioned FHA, this is surprising to me. They can go FHA with a mobile home.

Hunter Nall (07:20)
Yes. So you you can do an FHA style mortgage. The site needs to be developed to FHA guidelines. But we do FHA all the time, especially in our San Antonio locations, Austin location, where land becomes a little bit more expensive, then you get a larger loan amount. the the loan amounts are getting larger, so the down payment criteria is it get becomes higher if you’re staying conventional. So 3.5% on FHA keeps a smaller down payment option on the table for some of these clients, even in a larger loan amount. So it’s a really popular loan product that we offer. But as long as the— the property can be built to the site improvements to FHA compliancy, there’s— there’s no issues with with FHA. It has its own obstacles to overcome as the retailer. But if you know you’re working with a professional and you’re working with a company that knows what they’re doing and has experience in that, it’s actually a very beneficial loan product.

Dylan Silver (08:19)
Now when we talk about what’s necessary in order to get the ball across the finish line there, it’s gotta be affix to the land, you know, you’ve got to own the underlying land. Walk us through that process ’cause for folks myself and for folks listening, that seems like a hurdle.

Hunter Nall (08:35)
Yeah, so you know, if you own the land, basically you you use the land as collateral as in the transaction. So even if it’s an FHA loan, you know, if it’s three and a half percent down, if you take you know, a three hundred thousand or a four hundred thousand dollar loan amount, you know, I can I can math that just say your loan amount’s four hundred thousand times three point five percent, you know, just rough math. let’s see, what does that come out to times three and a half percent? 14,000. So $14,000 down payment would be the down payment call. Now, if they already own the land, if the land appraises for more than $14,000, then they can use that equity of the land to cover for the down payment. So in reality, it actually ends up becoming a zero down loan. as long as the land appraises for the loan amount. So that— that’s one way that we we help a lot of people. One of the clients that that comes to us often is let’s say a traditional family that they you know, mom or dad or grandma, grandpa, they had a piece of property that they owned, they never really did anything with it, and then they pass, and then this the family inherits it. Well, it they don’t really know what to do with it. And so, but it’s own free and clear. So as long as they have the correct documentation, we take them through the traditional titling process and things like that. they can— they have their down payment right there equity sitting in the land. So it’s a big benefit for those people. Now, of course, there are the clients that come that don’t have the land. if you’re working with a dealer or retailer that has access to property, then the right dealer would have subdivisions that that they could use where they would take those clients, they would find a property that makes sense for them, and then they would they would basically bundle everything together into one one mortgage. They’ll put the land under contract. We’ll bid out all of the site work that needs to be done for the water electric septic. And then of course we we get those numbers and make sure that fits within side the confines of the the loan approval or the loan program that we have them approved for.

Dylan Silver (11:15)
Now, for folks are who are in that situation, the latter, where they don’t own the land, does the mobile home have to be affixed first, effectively, before they can apply? How does that work? Because in my mind, I’m thinking, well, the lenders are gonna look at this and say it’s not affixed to the land. We’re not gonna loan on it. How do you get around that hurdle?

Hunter Nall (11:35)
Great question. So let’s say you have a home that’s already on the property. It’s not affixed to the land. It’s personal property. to get an FHA come— you can get an FHA approval on it by using what’s called a retrofit. a retrofit is kind of a loophole for FHA. In most— with most lenders and most manufactured home lenders. If you have the home there that’s not affixed, you get the retrofit done in the eyes of the— of the taxes and the eyes of the bank, it now becomes real property. It’s a small cost. It’s— it’s anywhere from thirty five hundred dollars to four grand sometimes. But once it’s done, it basically affixes that home to the property, and now that mobile home can be considered for FHA or VA compliance. There’s some other things and inspections and things like that that are associated with it, but in the grand scheme of things, that that would be the something that is an option. That also prevents you from let’s just say, let’s say you you want to buy a home, you don’t want to go through the FHA process up front, it saves you $30,000 in site work, which at that time of your life would have been, wouldn’t have made sense, could have moved forward. So you you just bought the home by itself and you spent less money on it. Well, three or four years down the road, when you’re ready to sell, you can have that retrofit done. So you still have that option to have that home listed as an FHA compliant home. So you have more potential buyers that could come in and buy that home. You’re not necessarily shooting yourself in the foot up front because you bought it without FHA.

Dylan Silver (13:02)
I know this is gonna be tough to say, and so you might not be able to give me a granule answer here, maybe a range, but for for folks who have good credit, let’s say seven hundred and above, and they don’t own the land and they’re looking at, you know, a land home package realistically between installation and purchasing the land, how much money down are they gonna have to be bringing to that situation? Is it gonna be three and a half percent? Does it vary? What’s it look like?

Hunter Nall (13:29)
Great, great question. If you’re a 700 borrower in our industry, you’re looking at the lowest down payment call in the market, which is either going to be three and a half percent on FHA, or it’s gonna be five percent conventional in the other route for land home. There is another option if you go chattel, which is a home only loan, which let’s say I’ll run the scenario your wife buys the land, okay, wife owner finances or leases per se the land to that, to the husband. That guy can have a 700 credit score in a perfect world. He— he actually get a zero down call. So he wouldn’t have to put any money down. So most borrowers, I would say, that have good credit, you’re gonna be getting the lowest down payment call, which would range from 5% at the most, 3.5% at the second to potentially zero down. So, you know, I would say most lent— depending on the land area that you’re looking at in our area here in Abilene. I would say a land home bar— or land home package like baseline would probably be about two hundred thousand. So if you’re thinking about a down payment call at two hundred thousand, you take your two hundred thousand times five percent and you’re looking at 10 grand down. So, you know, that’s a good rule of thumb for people is if you’ve got 10k in a lower land priced market, that should be a really good place to start. You should be able to get get into a home using that.

Dylan Silver (14:55)
Now I know for FHA you have to make a certain amount more multiple of the mortgage payment. For folks who may not be able to meet those FHA guidelines, are they unable to proceed or are there other options for them if they have the income but just not, you know, multiples of that debt payment?

Hunter Nall (15:56)
Sure. I’ll tell you this. I believe our our company, they they roughly did over fifteen hundred, maybe close to fifteen hundred homes last year. Of those homes that we delivered, I would tell you probably less than five percent of them were FHA. So that’s just because there’s so many more beneficial loan programs out there than FHA in our market. If you’re buying a traditional home and you’re in the site belt realm, which is this the differentiation between where people kind of like think blending products on site built versus what we offer. There’s a lot of differences. And so when you’re built buying a home FHA or even VA on a site built, it’s substantially easier because the project is already completed. As long as it passes inspection and appraisal, things are good. On our side, you’re basically doing a new construction style loan. So you’re adhering to the compliances, you’re adhering to all the inspections. You’re— the timeline can be different. So there’s a lot of hoops and obstacles to jump through. Jump through. Most of our clients come to us because they want affordability and they have a timeline that they want to hit. Our clients don’t want to wait, you know, seven to eight months to get into their home. So we have these conventional products or these channel products that expedite the— the whole move in process and the loan program substantially faster. FHA, I would say you’re looking at, and there are some faster FHA programs now. I would say you’re probably looking at anywhere from maybe 60 days to 90 days close, somewhere in there. On our conventional style mortgages, we can get clients closed as fast as 30 days. sometimes even faster than that. On a chattel mortgage, a customer can come in, they can give us their their deposit or their down payment on a Monday, and I can have them at the closing table within typically 48 to 72 hours in a perfect world. So that is the other benefit of working with us in our option, is that closing happens substantially faster. Delivery move in process is substantially faster.

Dylan Silver (17:52)
And delivery move in, you know, installation, is this something that can be financed or is this have to, you know, come out of pocket for those services?

Hunter Nall (18:02)
We do have a lot of creative financing options, but most of all the all the the cost out of pocket, the way we— the way we structure our business model, majority of the cost out of pocket will only come from the down payment. There won’t necessarily be a whole lot of additional expenses that the customer has to pay during the moving process or during that that process. Majority of every cost that they’re gonna have that would come out of pocket would come from the down payment.

Dylan Silver (18:31)
Now, when you’re putting any type of home on land, of course there’s gonna be issues potentially surrounding, you know, getting a septic out there, you know, water and electric lines. There— these are effectively challenges related to construction. How do you handle those difficulties? And also, you know, is this something that is incumbent upon buyers to educate themselves, or will you really handhold people through this process?

Hunter Nall (18:59)
We’re definitely a handhold business model. you know, I I work with single mothers, I work with first-time home buyers, I work with real estate investors, I work with all walks of life. And one thing that I’ve figured out and one thing that we we really let people know is that our goal is to take the stress off of this project and put it onto our shoulders. And that’s really where our company sets us sets the tone for what what can be done in this industry. And so as far as the construction is concerned, I would say if anything, that’s probably the the least hurdle that we have to to jump through just because our process is so streamlined, we’ve done it so many times. You know, and we would send people out to the property to bid all of the items that need to be done up front. So water, electric, septic, foundation, connections, all of those things. So we know what those costs are up front prior to the customer closing. So the process is the customer orders a side evaluation. They get their bids in our market, that’s roughly anywhere from 25 to 30,000. We can add some meters in there occasionally if we need to. So the customer agrees to that cost. Then we move on to the home price. If they’re good with the home, they have that home price. You combine those two together. So you have bids, home, and then now you have your full turnkey cost if they already own the land. If they don’t have the land, then you take the land as the last hard cost. Add those three together and that’s your totality that we would bid or that we would finance and things like that.

Dylan Silver (20:26)
Pivoting here, I do want to ask you about these products, modular homes, mobile homes, tiny homes for investors. And I think that there is a massive need for affordable housing really everywhere. and in a state like Texas, where there’s lots of land, this presents an opportunity for folks to make use of vacant land for an ADU or really just any additional dwelling unit to cash flow. Are you seeing investors now becoming more interested, not just at scale at buying, you know, mobile home parks, but also on an individual level, folks taking advantage of vacant land that they have?

Hunter Nall (21:06)
Absolutely. I would relate our product to, you know, as most investors are rent and repeat kind of guys. So they get in a habit of doing the same type of deal, the same type of investment over and over and over. And the investment has to equal one or two things: ROI, you’re looking for cash flow, you’re looking for money back. So that that’s why the investment exists. When we bring our option to the table, it’s like these guys have been eating the same meal over and over, except now they have something that costs substantially less, they can get it way faster. They just didn’t know it it— And so once they know it exists, and then they run the numbers and they see, the cash flow is even more because if you take traditional, you know, site-built realm, you’re taking a square footage cost of 200 or $250 a square foot, where my product is less than $100 a square foot. You know, 60, $70 a square foot. You do that math, cash flow can be exponential, especially here in my market. Right now, Abilene with the data center influx, it’s— it’s pretty crazy. We have anywhere from three to five X the rental market that we had year over year. We have a five-bedroom unit here locally in Abilene that’s being rented out to some of these workers for $10,000 a month. So that unit that they bought though, I think they paid roughly anywhere from like 350 to 400,000 for a site bill. Well, here’s the crazy part. I have a five-bedroom unit that I deliver for $145,000. I have a six-bedroom unit that I deliver for roughly $150,000. Yes, we got to have a place to put it. Yes, we got to have the connections and things like that. But turnkey, if we can still stay around $200 or $200, something in that realm, when you do that cash flow math, it’s gonna be exponentially. Higher than what you would find out at— in traditional investment markets. So I’m actually today I am working with some investors from Japan and San Diego looking to invest a hundred to purchase a hundred homes where they will be renting to some of the data center workers. And you know we’re talking millions and millions of dollars investment because they know how good the market is. We have some of these oil fill companies, or excuse me, these data center companies that will buy some of the oil filled units that we have or some of the larger homes that we have and they’re using it for the employee housing. Well, we’re— we’re looking at 200, 250, 300 homes that are being purchased because they know that they can buy it at a substantially lower price point and they can rent it out to their workers for a much, much higher cost than it would cost them to to build you know, traditional site built or— or something along those lines. So as an investor, if you’re looking for cash flow, if you’re looking for something that you’re gonna make your money back, our market is great, number one, but two, our product is fantastic because price per square foot can be three times less than traditional lender— traditional site-built products.

Dylan Silver (24:12)
Now I wanna ask you about the long term appreciation and equity building in these deals and maybe play a little bit of dev— devil’s advocate here, Hunter. You know, for folks who are looking at this and saying, “Well, you know, I— I can’t right now either qualify or afford for whatever reason a stick built home with one of the national builders, we all know their names.” And I’m looking at mobile homes. I don’t know if this is gonna be an investment over time where I’ll be able to, you know, get out of if I want to sell in five years or six years or what have you. And whereas I might be able to do that with a stick built home. Is there any truth to that? And then also what feedback would you have for those folks who are running through that arithmetic?

Hunter Nall (24:56)
You know, here with it being twenty twenty six, one of the things that we have really worked hard as a company in an industry to do is to overcome some of the stigmas associated with manufactured mobile homes. And that unfortunately is a common stigma that we hear often is that, you know, my equity position or my depreciation is is going to hurt me over the long run. And when— though that can be truthful in some cases, 90% of it, it’s not. And let me— let me explain. If you were to buy a single-wide, right? And let’s say you put it out there for a hundred thousand, and in five years you were ready to exit from that home. Well, if you sold the home by itself. It’s— it’s a personal property, it’s a depreciating asset. You’re going to lose a little bit of money, but as long as you purchase from a manufacturer like Champion and Titan, then it’s gonna hold its most amount of value because of the quality construction, things like that. So you will lose a little bit of money. However, majority of people don’t buy a manufactured home by itself and sell the home by itself. They buy a home, they put it on the property, and then when they’re ready to sell, they sell it with the property. And there’s one thing that they’re not making any more of, and that’s the land. So as long as you take that home and you put it on the land, you’re gonna have the same appreciating— the same appreciating values that you would if you were to buy a traditional site bill. If you— if you build a modular home, which is built a state and local code versus the HUD code, then it can be comp this exact same way as a traditional site bill. So that’s a common product that we build as well. But even if you weren’t to build a modular home, you were just going to build a manufactured home and you put it on the property in our market, especially, we don’t see a depreciation at all. We see a massive appreciation. So as long as you structure the deal correctly, as long as you’re working with a retailer who puts you in not just a great home, but a great loan product where you’re not spending 18 or 20% on an interest rate so that when you are ready to sell, you’re not behind the eight ball. Then you’re gonna be looking at an equity position opposed to a depreciating asset.

Dylan Silver (27:12)
We are coming up on time here, Hunter. Any new projects that you’re working on, and then also anything you’d like to mention directly to our audience.

Hunter Nall (27:20)
Here in Abilene, we’ve— we’re doing some incredible affordable housing development. So we’re focusing on first-time home buyers, the data center workers, anybody that’s looking for workforce housing. we have a product. We have tiny homes, one bedroom, one bath. I just got my brand new one in this week. It’s $49,000 delivered within 50 miles of Abilene. So naming one product that’s a one-bedroom unit that’s less than $49,000. It’s affordable housing and we are selling them like hotcakes. So that product is incredible. I’ve got the cheapest models from you know double wides that range just shy of a hundred thousand all the way up to products that range that are completely custom to 350 close to 400,000. So we have a product for every single person that that’s in the market, whether you’re an investor, first-time homebuyer. Most people come to us because they want to be on the land and we have a product that can get you on property and also get you into a home where you’re not feeling like you’re living in a traditional mobile home. As far as the developments, like I said, we’re— great things happening here in Abilene, but we work all through the state. We specialize in mobile home park developments, subdivision developments. We work with investors all over the state of Texas, including New Mexico and Oklahoma. And so if anybody that’s listening is looking for a cash flowing option or they’re looking for a new investment portfolio and you want to make you want to 3x, 5x your money, our industry is where you need to go. If I had a million dollars today to put in any industry that I would know that I could maximize my cash flow, I would 100% put it into manufactured housing and the affordable housing solution that we provide.