Welcome back,
How does each unique investor know when to pass or buy each unique mobile home opportunity? The answer, it depends.
If you ask 100 different mobile home investors to specifically outline what mobile home criteria/situations they will and will not invest in, you will likely get 100 different answers if we are specific enough.
While there are some things most of us can agree on: We do not want to do skinny deals, We want to follow the law, We want to help others, Etc. There are likely many pros/cons to each opportunity and each pro/con should be accounted for before making purchase offers.
Understanding mobile home deal-breakers in your business.
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The mobile home deal breakers in my business will be a bit different from the mobile home deal breakers in your business. This will be due to our different experience levels, comfort levels, capital, time, goals, knowledge of the market, locations, team in place, exit strategies, and much more. Before getting started is better to have more clarity rather than less clarity. Make sure to understand…
A. Understanding your mobile home investing goals.
Mobile home investing is not a get rich quick real estate niche, at least not without a great deal of hard work. In some markets selling mobile homes for cash or bank financing is easier than in other areas. If selling for monthly payments it may be wise to aim for recouping all of your invested capital back within 6-12 months or less with a decent down payment and monthly cash flow from your low-risk tenant buyer.
Related video: Mobile home ROI inside of MHPs?
This business involves working with people on a daily basis. While you should aim to have your mobile homes resold or rented within 30 days of placing them on the market, it may take 3-12+ months to start generating a profit.
Pro Tip: When possible, structuring seller held financing is a great way to allow your mobile home to pay for itself. This requires giving the seller payments for the equity of their manufactured home.
B. Understanding your starting capital.
Mobile home investing does not take much capital to get started with, however it does take some. Any side capital over $15,000 may be wise to pretend that you do not have. Just because you have the money, does not mean that you have to spend it.
In the event you have less than $10,000 to begin investing in mobile homes, it may be wise to aim for an all-cash buyer when selling your first few mobile homes inside of preexisting parks. This is because you will need to sell more mobile homes for all-cash to then reinvest back into more mobile homes to hold long-term. When selling homes for cash it may be wise to aim to double or triple your invested money.
Related video: How much money do I need to get started?
Pro Tip: For your first few years investing expect to reinvest 100% of your profits back into more mobile homes.
C. Understanding your market/territory.
In this investor’s opinion, your market/territory for individual mobile homes does not need to be any larger than a 90-minute radius around your home. Perhaps two hours at most if you are comfortable going out this way regularly and it is a very fruitful area with more opportunities. In almost every area around the country: demand, prices, times on the market, ideal repairs to make, selling strategy, and more will differ from location to location.
Related video: Mobile homes near you?
Before purchasing any mobile home in an area you are unfamiliar with, make sure you absolutely understand your realistic resale price/terms, strategy, repairs, and selling procedure moving forward. In other words, know what people want and are willing to pay.
D. Understanding your free time.
Eventually many daily tasks can be outsourced to others and/or done by telephone. However, in the beginning of your mobile home investing business it is important to begin making a name for yourself and grow rapidly/safely. This is done by physically going to each separate mobile home community to introduce yourself, explaining your goals, looking for homes, describing the benefits you bring to the community, advertising, and more.
Pro Tip: Any time dedicated to moving your business forward is likely time well spent. However this investor recommends an investor have 30+ hours per week available for your first six months investing in mobile homes. This time can include the weekend hours.
E through Z. Understanding each specific mobile home you are looking at, the repairs, negotiation, pre-closing procedure, paperwork, funding, due diligence, closing, rehabbing, screening/managing handymen, your selling process, paperwork, proper buyer screening process, selling the home and more.
There is not one video you will watch or article you will read that will completely protect you when it comes to real estate investing or mobile home investing. There are many moving parts in most deals, some of them insignificant and some of them very costly. Before investing make sure to ask questions and understand the procedures and steps you will take moving forward. Any specific questions never hesitate to email or comment below.
What to do next?
Take action. One way or another, take action. Learn more. Ask more and more and more and more and more questions. Understand the answers you are given and ask more questions. Ask for help. Look around for local mentors or investors already investing in mobile homes. Be cautious learning from the expensive school of hard knocks or trial-and-error. If you’re confused or have a question ask for help or email/comment below.
In conclusion mobile home investing takes hard work and relatively daily effort to make a consistent name for yourself and help multiple buyers and sellers regularly. You’ll likely never learn everything you need to know about mobile home investing from reading books or watching videos. While there are many ways to make money in real estate, there are countless ways to lose potential profits as well. Know what you are doing, have fun, and take daily action to reach your goals.
Love what you do daily,
John Fedro
support@mobilehomeinvesting.net
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14 Comments
Jim Jones
June 6, 2019Great information, thank you, John.
We are being held back, I think by understanding goals.
We started flipping a few years ago and after 13 mobile homes, we are sort of stuck in our pattern of 3 homes per year.
We fix them very well, and our model is to make $10k on each one cash, or $12-$13k on 48 month financing.
We have a good reputation.
Issue is letting go and letting contractors 🙂
My wife and I do most of the work, and it takes us forever. We lose holding costs, and are limited to just 2 or 3 units per year.
Need to learn to break this mold.
Jim
John Fedro
June 6, 2019Hi Jim,
Very good to hear from you. Thank you for reaching out and connecting. Please see my thoughts below in bold.
Great information, thank you, John. Happy to help. Thanks for your kind words.
We are being held back, I think by understanding goals.
We started flipping a few years ago and after 13 mobile homes, we are sort of stuck in our pattern of 3 homes per year. First things first, three homes per year is definitely better than zero homes per year or two homes a year. Great job helping these sellers, parks, and buyers as much as you already are.
We fix them very well, and our model is to make $10k on each one cash, or $12-$13k on 48 month financing. Understood. There is certainly nothing wrong with this decent amount of profit.
We have a good reputation. Very glad to hear this. If you are investing this type of money in each home then it does sound like you are making them nice and attractive for the next buyer. Some newer investors these days simply purchase homes and resell them without doing any work only to charge a few thousand dollars to the next buyer. I am glad to hear that you are actually putting in some money and selling them to good people with some financing.
Issue is letting go and letting contractors. I’m not sure that I fully understand this comment. If you have difficulty with micromanaging than perhaps you have not found the right handyperson or contractor to work with. Or perhaps you enjoy doing the work yourselves as well. Financial profit is not the only goal or reward that we have in this business. If you like what you are doing and enjoy working together than perhaps doing all the work and repairs yourself is not a bad idea. With that said if it takes you an extra long period of time to do the work yourself, the holding costs you may be paying could go to a low-risk experienced handyperson in the area. With that said I would encourage you to advertise heavily looking for handy people and ask as many local park managers for referrals as possible. This would at least give you an option moving forward. Additionally, understand your marketing and advertising. If you are not making one or two purchase offers every single week then your business may remain stagnant at a handful of deals per year. However let me say again that even a handful of deals a year is better than no deals per year. In my opinion, keep up the great work.
My wife and I do most of the work, and it takes us forever. We lose holding costs, and are limited to just 2 or 3 units per year.
Need to learn to break this mold. Understood and agreed. It is glad that you have realized this shortcoming and limitation in your business. The answer in my opinion is going to more appointments and continuing to make more offers. We both know that if a good deal comes across your desk and you make an offer that gets excepted you will pull the trigger to close the deal. At this point you do not want to sit on your hands so the repairs will need to get done so that you may resell the home to a qualified tenant-buyer. Additionally, it is important to know what buyers are looking for in your area besides extremely fixed up mobile homes. Depending on the repairs you are putting into these homes you may or may not have to do all the repairs needed before selling them via payments. We definitely jumped around to a few topics however I hope this all helps and starts to point you in the right direction moving forward. If you have any follow-up questions or concerns now or moving forward never hesitate to reach out any time. All the best. Feel free to keep in touch.
Talk soon,
John
Marti McCleary
June 11, 20192 years ago I looked for a mobile home in a park in North Carolina. The agent I worked with told me the seller pays all closing costs in NC. The buyer pays nothing. Now I’m looking again and the new agent tells me I will pay closing costs. Who’s right?
John Fedro
June 22, 2019Hi Marti,
Thank you for reaching out and connecting. If you’re purchasing a mobile home inside of a pre-existing park then you, the buyer, will pay for the fees and sales tax to transfer the title into your control. However if there are back taxes or hidden liens on the property then this should ideally be paid for by the seller, as they were the one in the property at the time the taxes were owed and lien was created. I hope this helps and answers your question. If you have any follow-up questions or concerns now are moving forward never hesitate to reach out anytime.
Talk soon,
John
Nancy
June 27, 2019I am 62 and would like to start in this business before the end of the year. I live in a park that is for seniors. Do you think it wise if I begin by purchasing a home in the same community where I live? Thank you and blessings
John Fedro
June 27, 2019Hi Nancy,
Thank you for reaching out and connecting. The answer to your question is definitely, it depends. However you know this park better than a lot of other people and if you like the area and understand what home sell for for cash and/or payments then you are in a unique position to learn insider information about who is selling what or who is behind on payments in the community, and act quickly. If you are able to help out a seller while also helping the park and creating a value with the local buyer then by all means you should do so. Begin by asking around to see if anyone is selling or thinking about selling a mobile home in the community. I would also encourage you to talk directly with your community manager to discuss your plan and remind the manager that you have no intentions of removing the home or missing your lot rent payments or this new homes lot rent payment. If the park allows renting then you may be able to rent the home however if you are not familiar with being a landlord than selling the home on payments may be a wiser idea assuming your paperwork is correct and you have a fairly clear understanding of what you are doing. Moving forward if you have any follow-up questions or concerns now or moving forward never hesitate to reach out any time. Keep in touch. All the best.
Talk soon,
John
Karen Desocio
October 6, 2019I’m really need some good advice on a mobile home I purchased from a private seller. He is refusing to ad himself as a lien holder to the title, other issues are on going pertaining to the paperwork he provided. I’m not sure if this is where I can get help with regards to this nightmare.
Thank you
Karen Desocio
John Fedro
October 20, 2019Hi Karen,
Thank you for reaching out and connecting. I very much regret to hear you are having this issue with the seller. Have they given you any other reason to doubt them or think something fishy is going on? Have you seen the title to verify that they or their company is listed as owner? Did the seller transfer the title to you? If that is the case then it really does not matter if he is the lienholder or not since you will be the one making the payments. However if he refuses to transfer title to you completely until the home is paid in full, this is not uncommon however I can understand your concern since you are handing over this money without any legal ownership. The paperwork will be important and it is important to read the fine print. Feel free to follow up with any additional questions or concerns that you may have. My personal email is support@mobilehomeinvesting.net if that is easier for you. All the best.
Talk soon,
John
star
March 14, 2020Hello, I have called a few parks before dropping by them to see what I can purchase. Most of the parks never answered the phone. One park answered and I was told no subleasing. So does that mean I can not purchase in their park and flip? Se told me they had one resident selling their home but she never called me back with the information. What is the best way to find a seller in the park? Drive around, ask the park manager?
I also found another park but to me the park looks a little ran down with a few empty (4) mobile homes. Those homes would need renovation. Should I attempt to purchase or make a deal with those homes in that park ?
John Fedro
March 16, 2020Hi Star,
Thank you for following along and commenting. Great job already taking action and getting out there. Understood that most park managers are not typically in the office, and many will not call you back unless you leave a provocative phone message that entices them to call you back. You want to be a priority and not simply calling to see what is available for sale. Additionally, it is not uncommon for parks to tell us that they do not allow subletting or subleasing. That is typically not what we do as we purchase these and then resell them to park approved buyers immediately day #1. The time we are not subleasing or subletting, however sometimes managers feel that they are right even when they are not. Continue driving around parks and talking with people that are walking around to see what is for sale and who may be selling. There also a handful of other things to do however getting through the parks and talking with managers is a big step in the right direction. You mention about a park that was a little bit run down, I would definitely encourage you to reach out to this park to understand what is going on. Perhaps the park kicked out a number of folks and it will be improving shortly, or perhaps it is going the other direction. Definitely reach out to see how you can help and begin making a reputation. I hope this helps and points you in the right direction. Feel free to keep in touch moving forward. If you have any follow-up questions never hesitate to reach out. All the best.
Talk soon,
John
Maiya
July 6, 2020Hey John,
Great content as always! Very informative and easy to understand.
I am very eager to pull the trigger on my first mobile home. How would I go about finding contracts that outline selling the mobile home as well as seller-financing? I live in Colorado and found a general bill of sale contract in a group I’m apart of and I’m wondering if it’s sufficient enough. Any feedback would be greatly appreciated.
John Fedro
July 13, 2020Hi Maiya,
Thank you for reaching out and connecting. Great question. I’ve had various forms created over the years by attorneys and legal professionals in the real estate field. This is something that anyone else can do as well. I do provide various state specific forms to folks I am working with one on one. However I would absolutely encourage you to reach out to a local real estate attorney in your area that me help you in creating these types of forms. Once you get them right you can then duplicate them and use them for future deals in most cases. In Colorado there are various forms you will use to protect your buyer and yourself and attach a lien to a mobile home.
Moving forward feel free to keep in touch. Any follow-up questions never hesitate to reach out any time.
Talk soon,
John
Alberto Mendoza
July 9, 2020Very interested in starting to invest into mobile home buying, fix up and reselling. In mobile home parks, they require a screening for any tenant so, if I have a potential buyer, but they will probably not pass the screening with the park manager, how do you make that deal work? Or, is it not possible?
John Fedro
July 13, 2020Hi Alberto,
Thank you for reaching out and connecting. Great question. You are definitely correct that most mobile home parks will want you, and your future residents/buyers to become approved to live in the community. This typically requires a background check, credit check, and sometimes more. It can be frustrating if you are selling a home and have found a buyer you like that is willing to pay the price you are asking… However they get denied by the park management. Almost always this happens for normal reasons. The park will tell you ahead of time with a screen for with regards to credit and income in most cases. However few times it is malicious and the manager is keeping people away or denying people for selfish reasons. Have made other lessons and videos about this type of situation. I hope that this helps some and points you in the right direction. If you have any follow-up questions never hesitate to reach out anytime. All the best.
Talk soon,
John
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