Mobile homes ? The good and bad ?
BP did a good podcast on this topic a few months ago. Its worth a listen if you haven't already.
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Real Estate Agent Nevada (#S.179748)
- 775-741-2326
- http://RenoSparksRealtor.com
@amanda
@Amanda ComeauI recommend you speak to @John Fedrowho is an expert at mobile home investing
Yes - mobile home investing can be a good strategy. I've been doing it over 2 years now and have stopped doing stick built completely.
Since they are not real estate (personal property like a car) they don't require a realtor or title company, in many cases. Check with your state to verify requirements.
Good and Bad?
Good - Low cost of entry, very high ROI. Market and economy is driving the business.
If you do them in parks, you only deal with the mobile NOT the land.
If you do a mobile on land, that's great. You compete with stick built home prices.
Bad - Parks - Sometimes a park manager or owner can be difficult to work with. Recommendation is to do 1 in a park before doing more. I did 1 last year and thought the owner would be good to work with. So got 3 more in the same park. But the wheels came off the train and she became extremely difficult to work with.
What does that mean?
1 - She was VERY picky qualifying people to buy my units. She was in no hurry to move people in since I was paying rent every month, right?
2 - I sent at least 3 people to the office to get qualified and she sold them units that she had to sell, instead of qualifying them for mine.
3 - I don't work in that park any more.
Good news - there are 2000 mobile home parks in my state alone.
Nationwide - There are over 20 million units or about 10% of housing. So there are a bunch! Lots of people would rather own their own place than rent. So you can do a good business with effort.
So mobile homes can be a good investment vehicle and it can have some challenges. It is not a get rich quick or lay down business.
Have fun!
Hi all,
In an attempt to have a little fun answering these questions Im going to answer them each with one or two words. The reason for this is because in addition to these questions you, Amanda, will have so many follow-up and additional questions moving forward if/when you decide to pull the trigger and invest in MHs. (Which is a very good idea when you understand what you are buying, where you're buying it, your local market, and your exit strategy.) Please see my answers below in bold.
Buying up decent mobile homes??? Depends. Good idea bad idea ? Depends. Only bad I can think of is perhaps the type of people willing to live in mobile homes??? That is a serious problem sometimes if you fill the home with the wrong people and fail to perform proper due diligence screening them. You can also overpay for a home and it will take over 12+ months to make all your money back. You can over-improve the home and have the same problem of making your money back too slowly to continue moving forward helping other sellers/buyers. You may leave thousands of dollars on the table when you resell and not make as much profit as possible. You may buy a lemon. Or like Bill mentions, you may buy in a park that is not conducive to mh investing. The list goes one. Well, this answer was certainly longer than 1 word. I was going to do a veteran discount in hopes of attracting older people or military because I am so close to a sub base? Some parks near military bases do allow renting versus selling day #1, so you have this option if you wish depending on the park. Does anyone have any success with mobile homes?? Yes, many of us. However for every happy and "successful" Mh investor, there are likely 1-3 jaded investors (my opinion only) that have been burned or do not like Mh investing due to mistakes made along the way. I hope this makes sense. Any help would be amazing .... I also have my real estate license so id be saving on commission also as a WIN. Will your exit strategy be to sell these homes all-cash? Do you plan on making repairs if needed?
I hope these brief answers helped some. Any follow-up questions don't hesitate to ask us. We're all here to help each other. In short, there are a number of hurdles to be aware of moving however if you are dedicated and serious then you can very likely create value with local MHs, sellers, and buyers in your area.
Keep in touch,
John Fedro
Also, congratulations on the baby!! (I assume that's you in your profile pic.) A growing family is certainly great motivation to get excited, focused, and dead-serious about some type of RE investing.
Talk soon,
John