Welcome back,
Mobile homes and manufactured homes offer investors a great deal of flexibility and affordability when it comes to generating profits and creating value between buyers and seller. In this week’s article we will be focusing on some of the benefits to touring your city’s local manufactured home builders, dealer showrooms, and mobile home repossession lots.
Let’s first understand the difference between a mobile home builder, dealer showroom, and mobile home repo lot. In this article the terms mobile home and manufactured home will be used interchangeably.
- Mobile home builder: This is the factory and typically distribution center for a particular brand/maker of manufactured home. These builders and showrooms are typically warehouse sized buildings that only offer one brand of mobile home. Examples: Clayton, Skyline, Fleetwood, Jacobson, etc.
- Dealer showroom: This is a local dealer that owns a “lot” (parcel of land) with homes for the public to walk through. These homes may be brand new from the factory or pre-owned used homes. If any mobile homes are used they may be there due to a trade-in from a previous customer who upgraded to a newer home.
- Mobile home repo lot: This is a local dealer that specializes in selling used mobile homes. Much of the inventory may be mobile homes which were repossesses from defaulted buyers. Some homes may be clean and rehabbed, while other homes may be sold as handyman specials. Look for the word “Repo” on the entrance sign or business card to identify these dealers.
Investor Tip: Over the past 10+ years investing in mobile homes I have managed to never purchase from a dealer. Dealers are middlemen between the owner-occupant seller and you, the investor. Dealers can provide you with some help however for the best deals aim to purchase all your mobile homes from owner-occupants themselves. Exception: HUD and bank owned homes.
What You Can Accomplish While Visiting with Local Dealers
Now that you have a basic understanding of where we can go to explore and walk-through some mobile homes, let’s discuss what you can accomplish while visiting with local dealers.
- Know your product: Know what you sell. Although we are not investing in these specific mobile homes, we can learn much from them. Especially if you are newer to the manufactured housing niche, I highly recommend walking, touching, smelling, and looking inside and out of these new and used homes.
- Network with dealers and ask questions: While you are walking throughout each home ask general or specific questions from the salesman about each home to better know the product, construction, financing, and features. Whether learning about their builder, local moving laws, their company, price specials, specific home questions – knowledge is power.
- Get excited about the new amenities modern manufactured homes have: As an investor the average mobile home I invest in is roughly 10-15 years old. While these homes oftentimes have walk-in closets, skylights, kitchen islands, garden tubs, and even his and her bathroom sinks, these decade old homes pale in comparison to brand new manufactured homes, floor plans, and new amenities.
- Get to know local movers: Dealers use mobile home movers all the time. Sometimes these movers work solely for the dealer and other times these movers are available for you to hire. Get to know what movers and handyman local dealers use and ask for reviews. In the future it may be wise for you to have these numbers in your Rolodex.
- How mobile home dealers can work with you? Dealers often work with vacant land owners. Whether you have a vacant unimproved parcel of land, or a piece of land with utilities connected that’s ready for a mobile home, you have a valuable piece of property for the right buyer. Dealers often keep lists of land owners for sale in case qualified mobile home buyers need a vacant lot for their new manufactured home. Being open to selling your land with owner financing for a qualified buyer may help sell your land quicker than an all cash or bank financed sale.
Investor Tip: You likely do not have vacant land for sale right now. If you become an active investor that is well-known in your market you will inevitably find great deals on vacant land you decide not to pass up.
- What can you sell to a dealer? Dealers are in a business to buy low, and sell high. If you can sell a dealer a mobile home for an attractive price many dealers will act quickly. While in the office find out from this dealer what homes they will purchase from you. Age? Size? Location? Price? Aim to speak with the manager in charge.
Give them permission to pass your number around: While I have never purchased a mobile home from a dealer I have profited from my relationships with dealers simply by being well known. Build rapport with local dealers and find out if they ever pass on purchasing homes for any reason. They will! If any mobile homes do not fit their purchase criteria, have the seller call you immediately. Encourage all dealers and their salesmen to pass along your name and number to any mobile home seller they do not help.
Love what you do daily,
John Fedro
Related Videos
4 Comments
Jose Rodriguez
November 16, 2014Thanks for this video. I just found the site through biggerpockets and am loving it so far. Really enjoy your motto to help others and the community. Do most people sell for these types fo prices? As investors do we sell for these same high prices?
Thanks in advance,
Jose
John Fedro
November 17, 2014Hi Jose,
Thanks for stopping by and commenting. This business is all about listening to people, buyers and sellers, and aiming to give them what they want. We are only in business to help and serve others. Concerning your questions here are my thoughts below.
1. These are mobile home dealers so the prices are for new homes and they are high. So, in short, no most sellers are reasonable and ask $30,000 or less for their used MHs for sale. This of course varies by state with highs ranging over 1,000,000 for a mobile home in a park to very low $1,000 for homes needing rehab.
2. No, not even close to those prices. These homes you see on this video will take 15 years or more to pay off. Again we sell nice homes for much much lower prices to our end users.
I hope this helps and makes sense. If you have any other questions don’t hesitate to reach back out.
Talk soon,
John
Carolyn
November 22, 2014Hi John, same as Jose, got to your website from biggerpockets. Thank you for the info. On MHs. I am thinking about this niche in my real estate investing as I own two MHs (renting out) and thinking about buying more. I own a home on 5 1/2 acres next door to a mobile home on 3/4 of an acre, 2 separate deeds. I would like to put another MH on the 3/4 of an acre but sewer inspector says I do not have enough room on my 3/4 acre for larger septic. (Property is on river and septic has to be a certain distance away) I am thinking about “merging the deeds” so I can use the 5 acre property for septic. My question is if this is a good idea or not. Thanks in advance, you are a big help for newbies and I love the fact you love what you do.
John Fedro
November 24, 2014Hi Carolyn,
Thanks for stopping by and commenting. Glad to hear you are considering investing in a few local mobile homes. Most parks will not allow you to own the home and rent it out. Most parks will require that you resell the home. If this is not your experience then by all means you may consider renting. I would advise you to be extra careful when filling these MHs up with renters and check on them monthly to make sure everything is safe and in order. This is why I love selling versus renting.
Is this 5 acres plot of land where the first 2 Mhs are going that you may be renting out? If this is the case then by all means renting is possible. However, you could still sell the homes and rent the land. This is the best of both worlds, and minimal upkeep needed.
As far as a good idea or not, you seem like you already have a good sense of what needs to be done moving forward with regards to your land. I will mention again I am not a fan at all of renting mobile homes, but if you are right there anywhere it can be a great income source. Plus thousands of other people rent out MHs without issue, so why can’t you as long as zoning permits it. Keep in touch if you decide to move forward and if you have any other issues don’t hesitate to reach out.
Hope this helps.
Talk soon,
John Fedro
Leave A Response