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The Mobile Home Perimeter Zone

by John Fedro on July 18, 2014 · 8 comments

  
The Mobile Home Perimeter Zone

Welcome back,

In almost every city in America you will find some supply of mobile homes.

These mobile homes and manufactured homes can be located inside preexisting parks and attached to private land the owner of the mobile home also owns. In many cities the highest density of these factory built homes are concentrated outside of the downtown areas. In fact traveling outside your city limits can afford you some great opportunities for investments.

Below is a quick common-sense grouping of most towns and cities around the country. Please keep in mind that this in no-way relates to every city or town nationwide.

Instead this is simply a guide to help you understand why and where some mobile homes will be located in your area. Imagine each of the “zones” below expands in a 360 degree radius around your city.

Downtown:

In most cities and towns the and highest use of this land is not going to be a mobile home park.

Downtown land typically holds high priced real estate, commercial buildings, downtown condos, apartments, nightlife, shopping, and bars. It is for this reason that any mobile home parks that were located downtown have already sold-out and are no longer there. In short there will not likely be a good supply of mobile homes located downtown in most cities.

Related: It’s Not Just “Location! Location! Location!”

Outside of Downtown:

Once you start to travel a few miles outside of downtown you often reach more residential type of housing.

In many areas surrounding a downtown you may likely find newly improved/rehabbed areas, older built homes, and even slums. Depending on the land value and population you will likely find a few mobile home communities or neighborhoods around this area.

Most mobile home parks in this zone will have higher priced lot rents due to the proximity to the city. The supply of motivated sellers will typically be low here as this is a highly desired area in most cases and buyers will be ready to pounce on most seller homes.

Even Further Outside of Downtown, but Still in the City Limits:

This is the zone around your city that will start to hold more and more mobile home parks and neighborhoods.

Typically called the suburbs, land value is reduced thereby making park ownership profitable and feasible for park owners. In addition, for us mobile home investors we will find a lower lot rent payment monthly, typically a lower demand of cash buyers, longer “on the market” time, and a lower selling price compared to similar mobile homes located closer to the city. This will typically be a good area for deals as the supply is higher than closer to downtown.

Outside of the City Limits:

You will discover similar findings here as the previous zone. This zone is very profitable too.

Related: Going the Distance: Should You Invest in Out of Town Real Estate?

“Out in the Sticks”:

This area is more a subjective zone than a definitive land area.

I like to class this zone as when single family homes come with acres of land versus a small subdivision-sized lot. When you get into these areas you will find the occasional mobile home park here and there. In these parks the lot rent monthly will be drastically lower than any parks closer to town.

Additionally, these parks may contain older homes in rougher condition. The buyer demand for this area will be lower than closer to town. The buyers in these areas will be attracted to the nature-type of “country living”.

Nearby Cities:

Depending on which navigational direction you leave from your city’s downtown and drive straight you may find yourself in a neighboring city instead of a country setting.

I make this reference to make sure you understand that each area is unique and only by being in the streets can you determine you own investing turf.

In conclusion know that you should become the local authority and expert in your own county (or parish) and the surround counties as well. Know what is for sale nearby and beyond the “out in the stick” zone. Only by understanding what all is for sale can you have the clarity to focus on any specific homes and sellers to help create value with. Aim to help everyone but only more forward with the most profitable and easy to sell homes.

In the next article we’ll be discussing what make for a “good” deal while mobile home investing.

Love what you do daily,
John Fedro

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{ 8 comments… read them below or add one }

James Pratt July 18, 2014 at 8:35 pm

John, I have found that a good investment in manufacture mobile parks is senior citizen parks. Their longer term, take better care, pay on time and don’t carouse too much. But I have to agree, buying ones with land is the best as they would be cheaper to obtain then a park.

Reply

John Fedro July 22, 2014 at 12:35 pm

Hi James,

Thanks for commenting. Congratulations on these past deals!! Have you purchased many in these senior parks or only 1? I ask this because it sounds like you have had a good response. Senior buyers are people just like you and I, sometimes they pay on time and other times they do not. With that said if there is a senior mobile home buyer demand in your area by all means capitalize on the demand and aim to help as many sellers and buyers as you can.

Talk soon,
John Fedro

Reply

david petri July 20, 2014 at 1:44 pm

Verry intrested in moble homes with land in southern pa.Looking for partner.I have some money to invest

Reply

Aaron Kinney July 20, 2014 at 5:19 pm

Hey David,

I invest in mobile homes with land in South Carolina. Let me know if there is anything I can help you with. I’ve made plenty of mistakes and would gladly share my knowledge with you to help you avoid the same ones.

Reply

John Fedro July 22, 2014 at 12:39 pm

Hi Arron,

Thanks for commenting and following along. What a great website this is that so many of us are willing to help others avoid the same mistakes that have slowed us down in the past. Keep up the great work.

All the best,
John Fedro

Reply

John Fedro July 22, 2014 at 12:37 pm

Hi David,

Thanks for reading along and reaching out. Glad to hear you are interested in MH investing. BP has a lot of great content and investors here to help you. I do have specific experience in your state and would be happy to help answer any specif mobile home questions for you moving forward. There is inventory in your state and sellers/buyers to help. With that said I would advise you to double-check your first few deals with seasoned MH investors here and locally if possible.

All the best and talk soon,
John Fedro

Reply

Paul Ewing August 2, 2014 at 7:46 pm

My parents and I have done well with properties “Out in the Sticks”. Our places are 4-8 miles outside small 1000-5000 person towns about 20-30 miles west of Ft Worth, TX. These are mostly nice late 90s early 2000s doublewides on 1-3 acres of land. Almost all of our tenants work in the smaller towns or in Ft Worth. Most of the properties are in scattered developments of 10-30 one to two acre lots with farms and large tract acreages between. Having lived in the area for decades we know the better and worse “neighborhoods”. It is funny to see a development of $200k+ homes go up right beside a development of doublewides. We rent at $850 to $1000 depending on lot size which gets us a payback on the purchase price within a few years. I am currently putting to refurbished repos on an old worn out five acre field that I could never get back into farmable shape. It is much better a growing rental properties than hay.

Reply

John Fedro September 17, 2014 at 11:07 am

Hi Paul,

Thanks for commenting and reading along. I am very happy to hear about your experience and the fact that this is a “family business”. I love when things like that work out. “In the sticks” is a great place to work; less competition and quieter in my experience. Additionally it is very nice to hear about the quick payoffs your having and appreciating values you’re seeing up your way. :)

All the best and talk soon,
John Fedro

Reply

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