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What to Look for In a Good Mobile Home Investment Deal

by John Fedro on July 25, 2014 · 3 comments

  
Mobile Homes

Welcome back,

This article is created to help investors who have little experience with mobile home investments. Mobile home are located in almost every city around the nation. If you have not seriously looked into this form of investing you may wish to dig a little deeper.

Let me first say that the opinions and advice made in the article are based on a decade plus of my own personal investing, in addition to dozens and dozens of additional deals worked and closed by other mobile home specific investors over the past few years. I mention all this to you because you are the final authority on determining what makes most financial sense to you and your specific goals.

With that said, allow me to impress upon you what I have learned so that you may avoid many of the same errors made over the years. The below list is a short outline of important criteria you may aim to meet on your first few deals.

The Right Home?

Making sure you purchase the “right home” comes down to many factors.

The home itself should be attractive and easy to resell when presented to a majority of potential buyers. But what do buyers want? The physical condition, size, age, and much more about the home should be given consideration when making purchase offers to any seller. We discuss this in some detail in a recent article titled, Which Mobile Homes Are Best For Investing, Reselling, and Profiting.

Related: 7 Surefire Ways To Find Real Estate Deals

The Right Park?

Let’s face it, if you purchase a mobile home in a park you will have to abide by the parks rules, regulations, management, residents, traffic, and more.

Many of these factors matter when reselling while other issues will not present you with any hurdles. Learn which parks are best for investing inside of with a past lesson titled, Mobile Home Investing With The Path of Least Resistance: The Mobile Home Community.

Right Seller?

Almost every mobile home “deal” you come across will have a seller.

It is my opinion that the way you treat a seller should be the same way you treat a good friend. Aim to help, educate, inform, clarify, and of course make purchase offers to every seller who wants your help.

With that said some sellers will want/need your help while other sellers will not want your help. Understand more about each group of seller and who to focus your attention on in a past post titled, The Three Types Of Mobile Home Sellers (inside Parks).

Related: The Top 5 “Red Flags,” to Look For in Determining Motivated Sellers”

The Right Price?

So many mistakes can be made while running your “purchase and desired resale numbers” prior to making your purchase offers. Many traditional home investors turned newbie mobile home investor have been burned by:

  1. Over paying.
  2. Over improving.
  3. Underestimating and overestimating a variety of numbers due to unfamiliarity with this niche.
  4. Under reselling.

When reselling any investment property you must first truly understand your local market’s mobile home supply and demand.

  • Know what buyers are paying?
  • Know where they are buying?
  • Know what they are looking for?
  • Know how they are needing to buying?
  • Know what marketing material your local buyers are looking through to find local mobile homes for sale?

Once you understand the above information aim to purchase every investment mobile home for a price or terms that recoups all your invested money within 12 months, including closing, holding, and repairs.

Let’s Get Real: You can always over-pay for a mobile home for sale. Many mobile homes and sellers will not fit the criteria above, that is perfectly acceptable. Without any skill you can go out tomorrow and purchase a mobile home you negotiate down 50% and falsely think is a really great buy. You will be doing your business a disservice if this mobile home does not make you your invested money back in 12 months or less (ideally much less).

Set your investing bar high and you may be surprised at your results.

Love what you do daily,

John Fedro

What’s the best deal you’ve ever gotten?

Be sure to leave your comments below!

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{ 3 comments… read them below or add one }

Nick July 25, 2014 at 2:34 pm

Hi John,

Could you please describe your business model?
I’ve been reading your articles for a while but couldn’t figure out how mobile homes investing is different from regular SFR.
Do you rent them or flip or what?

Thanks
Nick

Reply

John Fedro August 7, 2014 at 6:40 pm

Hi Nick,

Thanks for commenting. I’m not sure why I was not alerted to your comment so I apologize for the delay in my response to you.

Good question and thanks for reading. While I do rent occasionally I predominantly resell and collect payments. This is a very general answer so if you have any further questions don’t hesitate to ask.

With regards to you question about how mobile homes are different than SFR there are so many ways. The homes, the sellers, the negotiations, the repairs, the marketing, the timelines, the overall strategy, and the buyers are all so different. There are some things that are similar however most things are different. Please explore my past articles on this site and my own for much deeper explanation than this comment. In addition I am going to compile the differences and organize them in a coming article here. Thanks for the post idea. :)

Talk soon,
John Fedro

Reply

Jeff Howel August 12, 2014 at 11:44 am

It looks like the rules of Real Estate apply to mobile homes just as much as other properties.
1.location
2.location
3.location
Getting a home in a good park is key to being able to re-sell it, at least in my experience. But great article for anyone who is thinking about entering the mobile home real estate market.

Reply

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