Whether you call it a mobile home, wobbly box, tin can, trailer, or simply manufactured home, factory built homes offer convenience, affordability and even luxury to many Americans. As I talk to more and more seasoned real estate investors at my local REIA meetings, I realize just how truly secretive mobile home investing has become. Like many investors you may not be aware that mobile homes, as a source of prosperity, are available to you for residual everyday profit.
This niche has been kept quiet for too long. Let us look deeper into a few of the biggest misconceptions about mobile homes and the mobile home investing business today.
“I thought demand has gone down for mobile homes?” Between 2001 and 2007 mobile home construction averaged 300,000 new homes built each year. This number doesn’t take into account the hundreds of thousands of buyers every year that make up the mobile home re-sales market around the country.
“Isn’t property insurance through the roof?” Property insurance for mobile homes is typically priced by the cost to purchase a new mobile home if the one being insured is destroyed. Mobile homes typically cost less their site built counterpart, and therefore insurance rates are usually substantially cheaper than premiums for block or frame homes. Factors such as crime, flooding, etc, are uncontrollable factors to determining insurance premiums.
“Aren’t mobile homes always moving locations?” In fact only %5 of all double-wide (+20’ Wide) mobile homes will ever move locations. All mobile homes must be safely secured to a solid base and attached to the Earth in a process known as “setting” the mobile home. Stricter laws passed in 1976 and 2006 make this “setting” process safer and more secure today than ever.
“You can’t make as much money with mobile homes compared to traditional housing.” Price is relative. A mobile home will typically sell for a fraction of the cost of a comparable site built home. As investors we capitalize on this and buy them for tens of thousands less dollars than we would investing in a block home. Ensuring a hefty profit can be made on any property boils down to whether or not it can be purchased by you at a low enough price and/or favorable terms. Do your diligence before investing in any property.
When did it become a bad thing to invest in affordable housing? With a few tweaks to your investing paperwork, proper education and determination, anyone can become a success in the buy, hold and selling world of mobile home investing.
- J. Fed
Related posts:
- Mobile Home Investing: Design on A Dime
- Mobile Home Investing with Creative Strategies
- Mobile Home Financing: A Primer
- 5 Obviously Simple Reasons to Invest in Mobile Homes in 2010
- A Day in the Life of a Mobile Home Park Owner
Article Author: John FedroJohn has written 53 articles for us.
Visit John's Website: http://www.RealEstateCashFlowFormula.com
John is a real estate investor specializing in Manufactured housing and makes a FT living from these passive investments. You can too
Joshua Dorkin
{ 5 comments… read them below or add one }
Lexus sales manager, “Sorry Mr. Fedro, we can’t take your money, as it was made investing and flipping mobile homes.”
Jeff,
hahaha, it was the Cadillac sales manager.
Well put John. I have always loved the idea of owning a mobile home park, but my husband doesn’t have the same vision as I do. I’ve seen many well established parks sell for a pretty penny. Not only are you able lease the lots, but you also have the capability to lease out your own mobile homes as rentals. I am definitely going to have my husband read your article.
Visit Liz Voss’s last blog at San Antonio Homes.
Liz,
I couldn’t agree with you more. There are are many parks that you can pick up undervalued, not utilizing their full potential and fairly inexpensive with some level of owner financing. Even though many parks may not be living up to their full potential they still produce cash flow just the ways you stated above. KEEP THE DREAM ALIVE! I would think that owning a mobile home community would be a feather in the hat of any real estate investor looking to make cash flow and expand their experience. Plus you’d always have great/funny stories to tell!
John
It is as you say, sort of a secret market. It does take a certain skill set to know what your doing however. Here in my town, Yucaipa, Ca. We have no fewer than 47 mobile home parks. Mostly senior. The big problem is that all Senior Parks are under a rent control ordinance. Something to watch out for if your going to buy and hold as rentals. Nice job! Great Post.
.-= Dwight (Matt) Mathews´s last blog ..The Next Great Recession 2011-2012?? =-.