Reap profits as a middleman: the Used Trailer market is red-hot
Updated: Feb 9, 2019
Play instead of pass Motorhomes for sale or the ones which can be obtained for free that you pass on may be worth reconsidering. I'm talking about those units that are in fair to good condition and have certain issues that many buyers will fear:
out of state title and plates
incomplete or missing title
expired registration and smog requirements (California).
Let’s consider why you would consider these deals instead of pass on them.
When you tow around a travel trailer or 5th wheel trailer that has no title or the paperwork is questionable, it’s not that big of a deal. When you drive an RV (motorhome) with no title, well, then it becomes a big deal. There is a lot more on the line when you get pulled over by police or if something breaks on it or if you have to get it towed.
To venture into these murky waters requires a little knowledge and gumption. I am the first to tell you that I stayed far and wide from these deals for some time.
However, I would routinely find these deals for pennies on the dollar or I would be asked to take them, for free. I kept thinking about them. Then, one day it all came into focus. The issue became how to eliminate the risk.
I am always thinking of how to improve my income, well, why not just facilitate the deal; be a quasi-broker or quasi-wholesaler? By "quasi," I mean using these terms to define the position to take when you facilitate a deal for a seller and a buyer; when a seller is looking to sell their motorhome and you assist. Treading where others dare to go can provide great returns.
Does brokering or wholesaling require a license? Most of the time if you operate as a broker (for vehicles or real property) a license will be required. Wholesaling doesn’t require a license, by way of taking possession (https://www.biggerpockets.com/forums/93/topics/52409-the-difference-between-wholesaler-and-broker-).
Operate as a middleman If a seller comes to you and offers you a free or extremely cheap, satisfactorily or acceptably running motorhome, simply consider using tools from each—a broker and a wholesaler—to facilitate the deal. But, you still complete the deal as a buyer and a seller, technically, neither being a broker or a wholesaler.
A broker won’t put his/her money on the line to facilitate a deal, but a wholesaler may. As a middleman, simply make sure the seller knows that you will move the unit for him/her only if you have a buyer who will buy it, absolutely.
Once you have found a buyer for the unit, complete a transaction with the donor or seller including filling out legal and appropriate paperwork and issue any money. Then, very soon after do the same with your new buyer, at an increased price, providing a profit.
The deal was arranged by you; you found the new buyer and made the sale. You operated as a middleman, but you were a part of two back-to-back sales with appropriate paperwork separating both. Best of all, you took a profit. You pay your taxes on the deals and income you make. You make sure that the motorhome is to be used for permanent housing and it will not be used as a vehicle to be driven, otherwise you are acting as a Dealer. You have conducted legal business and made a profit where few others will go.
Why would someone buy an RV with paperwork problems? Simply, there will always be buyers for affordable housing solutions. More and more, across America, motorhomes and other types of RVs are being used for satisfactory temporary and long term housing.
Just because there is an out of state license plate and a smog certificate required before title can be transferred on the motorhome, it does not deter those who know the value of the motorhome as a home. That motorhome, after being driven away, may be parked and never driven and registered again. There may be a host of reasons why the seller cannot or chooses not to sell the unit. That is where you can step in and help the seller rid themselves of their troubles and capitalize handsomely on being a middleman.
It is good practice to obtain the identification and current address for the new buyer to use for filling out the Transfer and Release of Liability forms you submit and to keep for your records.
Now, get out there and grab some of these overlooked pots of gold!!