Welcome back,

Throughout your mobile home investing career you will almost certainly be presented with an option to purchase multiple mobile homes from a specific community that you may or may not already be working within. Some immediate pros and cons to consider are:

✔ Purchasing multiple properties may likely lead to multiple profit streams.

✔ Making the park owner’s life easier by outsourcing some rehabs and sales to you is a good thing.

✔ Building more of a relationship with a local mobile home community to be their go-to investor connection.

✔ Purchasing multiple properties will likely require a fair amount of time, energy, and money to repair, market, and resell.

✔ Potentially biting off more than you can chew (and losing money) when it comes to repairs, holding cost, and/or experience.

In this article we’ll be discussing some of the steps needed when considering buying multiple mobile homes directly from a mobile home park.

Disclaimer: In this article we will be discussing purchasing mobile homes directly from the mobile home community itself, with the intention of fixing and keeping the homes inside the park. In this article we will not be talking much about purchasing multiple mobile homes directly from another investor or private seller. Both these situations ideally require a bit of a different mindset and will be discussed in a future article/video.

First things first, how would you find an opportunity with multiple mobile homes for sale from a park?

As an active mobile home investor do not expect there to be parks regularly selling multiple mobile homes at any given time in your area. This is not reality. Only seldom will parks have multiple properties for sale due to a variety of reasons. In these situations the park owner or management may directly reach out to you if you are already investing in mobile homes within the community. You may also be able to find multiple mobile homes for sale on classified sites (local and nationwide), see the example below from Craigslist.

Pro Tip: The homes in the advertisement above are likely not worth the $500 the owner is asking. However that doesn’t mean a deal isn’t possible. Do not take on more than you can handle. In the beginning of your investing career it may be wise to focus on the quality of homes and not the quantity. Additionally, aim to purchase and resell at least one mobile home in a community before investing in multiple within the same community.

Steps when buying multiple mobile homes directly from a mobile home park.

1. Aim to quickly understand what responsibilities the park owner/managers want from you?

This step should not take longer than 30-90 seconds when first speaking with the mobile home park manager/owner that has multiple properties for sale. A few common scenarios you may run into are…

• Scenario A: The mobile home park requires all (or some) of the homes in question to be purchased by you, rehabbed to your liking, and resold (or rented) to park approved residents that keep their homes in the community. These managers also expect lot rent to be paid on time monthly without excuses.
• Scenario B: The mobile home park manager requires all the homes in question to be purchased by you and removed from the park at your expense.
• Scenario C: The mobile home park is interested in working with you in another way depending on the park’s specific homes, needs, wants, and goals.

Disclaimer: This article is not discussing situations where a park is simply selling multiple mobile homes at retail prices by an unmotivated park owner. This article is discussing purchasing multiple mobile homes from a park at discounted prices because the homes likely need some rehab, the park needs help and wants to work with a proactive, low-risk, and serious investor that has the same vision to clean/fix homes, pay lot rent, and resell them to park approved buyers.

2. Which homes does the park want to sell? Choose one or two very realistic and profitable exit strategies?

Once you understand how/if you may help the mobile home park, and if you want to, it is important to understand exactly what the mobile home park has for sale. If you have not seen the homes for sale in person or via pictures, it is important to have the park manager/owner verbally tell you more about the mobile homes for sale, ages, sizes, repairs needed, time vacant, experience in the area, etc.

Before going any further we want to understand if this is an opportunity we should put more time and energy into. Consider asking over the phone…

• How big are these homes?
• How many bedrooms do they have?
• How many homes are included?
• Roughly how old are these homes?
• Roughly how many repairs are needed?
• Are they vacant? How long have they been vacant?
• Are you able to keep the homes in the park or do they have to be removed?
• How much can you rent and/or resell each of these mobile homes for via cash or payments?
• What is the current lot rent in the park?
• What are park rules and criteria?
• What is the local demand in the area? How much are renters and buyers realistically paying?

Disclaimer: As an active mobile home investor it is one of your goals to understand your marketplace and know what all shapes and sizes of mobile homes sell and rent for in and around your local market.

Moving forward? If you feel there is substantial profit to be made then proceed forward building a relationship and learning more about these homes in order to make purchase offers soon.

3. Inspect all the mobile homes for sale & crunch the data.

In this step of the process you will ideally be physically inspecting all of the mobile homes for sale as well as thoroughly going through the local marketplace to confirm your desired exit strategy. While walking through these properties aim to:

✔ Thoroughly walk through every mobile home you are interested in making an offer on with a flashlight. Take many pictures or videos to help you further understand repairs needed.

✔ Speak with other mobile home owners in the community if possible to understand if residents are happy with the park/management, or if there are hidden problems with the community.

✔ Ask the park owner or management if there are any requirements or suggested fixes they see needed to the outside or inside of each home in question. Be aware that a very picky and/or overbearing park manager may not likely be the ideal relationship to get involved with.

Pro Tip: If you have not purchased and resold a mobile home inside this community already, then you are simply trusting that the park management/owner will not change their attitude after you purchase the home and make it difficult for you to rent or resell the property. For this reason it may be wise to only purchase multiple mobile homes from parks you have already successfully purchased and resold at least 1 mobile home within.

Related article: Inspecting a Used Mobile Home – What to look for?

Crunching the numbers?

It is important to first understand the resale price/terms for each home when you resell, and the profit you wish to create with each of these mobile homes. How much profit is needed for each deal to be worth your time? This will be different for each investor reading these words. For this author concerning most mobile homes, I want to make sure I recoup my invested capital within 6-12 months or less, create a net cash flow of $300+ per month, and sell for at least 60 months of incoming payments. Your financial goals inside parks may be different.

Once you understand the resale value and your desired profit, then you can work our way backwards to determine your maximum allowable offer for these multiple mobile homes. While working backwards from our desired expected profit, things we want to consider are:

• Rehab costs? (Which repairs should be made?)
• Holding costs? (Are there any? Which may be reduced or eliminated?)
• The mobile home park’s application process for new residents.
• Permits needed?
• Inspections needed?
• Time of the year.
• Verify local buyer demand for these sizes and ages of mobile homes.
• What else is currently for sale in the community? And for what price/terms?
• Is discounted or free lot rent available moving forward?
• Will the owner of the park allow you to have any equitable ownership interest in the park?
• Can the homes stay in the community or do I need to move them?
• Do you trust this community and owner?
• Will future homes be available to fix up and continue helping the community?
• Is moving in future additional homes a benefit to this community?
• Does the state offer any incentive or repair programs to fix up or improve these homes or the community?
• Communicating with city officials to understand parks status within the community and the local crime rate.
• Plus, likely much more depending on the specific opportunity and homes available.

As you are going through the bullet points above you are acting as a detective. We are aiming to uncover various scenarios and situations that could be harmful to us and make sure we position ourselves 100% safe after proper due diligence.

Expenses (there are many, some flexible some not) – Income (all-cash or payments) = Profit

Pro Tip: Aim to offset every 1 unique risk with 1 precaution offsetting that unique risk. See examples below.

The Pro Tip above is insinuating that for every expense or cost an investor is going to have into a mobile home, there should be an equal profit or reward the investor is going to receive upon selling the mobile home. Here are 3 examples.

Disclaimer: If/when you have questions make sure to get clarity sooner rather than later. Aim to really know your numbers and have clarity in every transaction. One simple mistake can be very costly and stressful in the near future. Have questions, ask questions.

Maximum allowable offer

Definition: The highest price/terms you are comfortably willing to purchase an investment property for while intending to make a specific desired profit.

Depending on each investor the maximum allowable offer for a specific mobile home inside of a mobile home community will vary. What should not vary is to almost always begin making your purchase offers well below this maximum allowable offer limit and go up from there.

4. Discuss your comfortable purchase prices and terms with the park manager/owner

In this step of the transaction you’ll be having a heart-to-heart discussion with the park representative you have been dealing with. In some cases you may be dealing directly with the mobile home park owner himself or herself. In other cases you may be dealing with the local mobile home park manager(s) or regional manager in charge of multiple mobile home parks in the area.

Your purchase offers

These offers may be verbal, in writing, or sent via email. At first we will simply call the park representative you have been talking with and explain exactly how we can help over the phone. Make sure you know what you are going to say and your ideal attitude prior to calling to make any offers. Make sure you know your value, worth, and what you are bringing to the table to help this community. Before making your purchase-offers aim to mentally place yourself in the shoes of the park to understand how these offers may sound.

What will happen next: Once you make these verbal purchase offers/terms there may likely be a back and forth dialog with counteroffers and counteroffers. Remember your worth. Do not feel rushed to make a decision. Remember you are bringing a lot of value to this community/relationship. Once you fix these homes and begin to pay lot rent you’ll be adding thousands of dollars of revenue and value to the community monthly. Aim to not exceed or come anywhere close to your maximum allowable offer.

Real world: Ideally the park representative(s) you are dealing with understands your value and wants to work with you moving forward. Ideally the park is somewhat flexible and understands the definition of a win-win transaction. However do keep in mind that some park owners or park managers think almost only about their profits and their best interests. If an opportunity is simply too skinny or risky feel comfortable in being patient and politely passing on the opportunity. Keep in touch with the park moving forward to see what changes and for future mobile homes for sale.

Pro Tip: Do not take on more than you can handle. In the beginning of your investing career it may be wise to focus on the quality of homes and not the quantity. Additionally, aim to purchase and resell at least one mobile home in a community before investing in multiple within the same community.

Moving forward? Once a satisfactory win-win purchase offer has been made, thank the seller for this opportunity to work together and help increase the revenue of their community. Look forward to potentially owning multiple properties within this park.

5. More mobile home due diligence, creating paperwork (preclosing process)

Congratulations! Assuming your purchase offers are accepted there is additional due diligence steps to perform prior to closing. Since you will be purchasing multiple homes it may be important to double check:

• Who shows as owner of record?
• Are there any active liens present?
• Are these homes the best use of your time?
• Are all taxes up to date? If applicable.
• Is the park actually in possession of the title(s)?
• Know all park requirements and demands from applicants and of homes?
• Become park approved.
• What else is for sale in the park and nearby?
• Double check repair estimates. What repairs are needed to resell?
• What specific repairs does the park want completed inside and/or outside of the mobile homes?
• Have you asked all needed questions?
• Re-Verifying local buyer demand.
• Almost always more items depending on the specific situation.

Closing paperwork and title transfer may likely be prepared directly by the mobile home park when purchasing mobile homes directly from a mobile home community. However after agreeing to win-win purchase offer(s) verify with the park if they would prefer you or themselves to prepare the closing documents.

6. Close to obtain ownership and/or title(s)

Be prepared for closing. Call ahead to confirm. Walk through all properties to verify condition prior to closing. Confirm all closing documents are accurate before you sign them. At closing you will typically 1.) sign ownership paperwork to own the mobile homes, 2.) sign lease agreements, and 3.) sign park rules and regulations. Closing may likely take place directly at the mobile home community office.

Pro Tip: This is a repeat from the tip above. There no cookie-cutter type group-mobile home deals. Due to different scenarios, park managers, owners, homes, areas, and situations – unique circumstances and questions will arise for you specifically. Ask questions below, email us directly, or work with a local seasoned mobile home investor to help gain more clarity on specific deals you are working.

7. Mobile home rehab, rent/sell, & manage

As investors we aim to purchase and rehab our mobile home investments with our end-users in mind. These future end-users are the families and residents we’ll be renting and/or selling to in the coming months/years. These future mobile home owners will ideally love and cherish their properties for many years to come.

Once you own the mobile home(s), now is the time to implement your specific repair and resale strategy. This is the strategy you crafted before making your original purchase offers. It may be wise to only repair what is needed in order to successfully rent/resell your investment mobile homes to a high-quality residents for a win-win prices and terms.

Related article: Which Mobile Home Repairs Give The Highest Return?

Whether you are selling your mobile home for payments or renting the property, it is always important to very thoroughly screen all adult residents coming into your investment home. You would not simply turn over the keys to your car without thoroughly knowing who these borrowers are.

Management: Minimal. When reselling for monthly payments your low-risk tenant-buyers are responsible for all payments, fees, updates, upgrades, maintenance and repairs moving forward.

In conclusion, there are no cookie-cutter mobile home deals when purchasing a package of mobile homes from a park. You will almost always have many questions along the way. You are encouraged to ask any questions below or email us directly at the email address below. Aim to always understand your opportunities, real-world expenses, potential expenses, and hidden expenses, while having a very realistic outlook on potential profit.

Remember that without the actual mobile home parks and the residents we would not be able to help anyone. We are here to help and make people’s lives easier. The more value we can create with other people the more value we will create for ourselves. Aim to help others daily and continually let people know what you do and how you may help.

Love what you do daily,
John Fedro
support@mobilehomeinvesting.net

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