The 3 Types of Mobile Home Sellers (Inside Parks)
My real estate investing business changed forever when I began to see my sellers for what they really are; fragile, scared, vulnerable, friendly, and selfish human beings. As young children we rarely look to our parents with the attitude that these people are just as screwed up as ourselves. Perhaps a better way to phrase this would be to step outside the relationship that we typically have with mobile home and traditional real estate sellers, and realize that each is a unique soul with his or her own set of skills, ambitions, loves, fears, and wants. In this article we’ll logically walk through the three distinct types of private mobile home sellers. This is based on over 10 years of listening and communicating to mobile home sellers.
Want more articles like this?
Create an account today to get BiggerPocket's best blog articles delivered to your inboxSign up for free
Before we discuss these 3 unique mobile home seller-types I must make certain you understand 2 key mobile home must-have mind-sets before making any offers to any seller.
1. To all sellers — you should be their local mobile home market expert.
2. Since you operate a business, you always know the MAX price you can pay for any mobile home in any park in your city. You must always make certain to stay below this MAX price. When purchasing mobile homes you MUST always know in advance what price a mobile home should sell quickly for in that city via all cash and/or seller financing payments. You can then use this re-sale information to help make certain you recoup any investment costs to acquire the home as quickly as possible.
Below are the three stages any mobile home seller may go through given enough time has passed with their property for sale on the market.
A. Top Priority: These sellers are ready to sell to the first buyer with a pulse. These sellers are willing to hear most traditional and creative offers you have for them. Their total asking price should already be at or below your MAX amount to pay for this mobile home. These sellers DO have some type of external motivation that is making it necessary to move within 0-30 days; they will not last long. These sellers make up approximately 10% of the market, however this number will seem much lower because most Top Priority sellers sell their homes before you ever knew it was for sale.
B. Middle Priority: These sellers make up approximately 50% of the market in your area and want what they believe is a “fair-price” for their used mobile home. These sellers are generally newer to the market place and do not understand that with the lack of cash-buyers, their home is typically worth much less than they may have previously paid. These sellers on average have between 3-9 months worth of financial capital and time to wait for their unwanted home to sell. The asking price for this home should be between 1.1 to 4 times the MAX amount you can pay for this mobile home. Many times these sellers will list with a Realtor, continue slowly dropping their price, and/or become more flexible as time passes without a sale.
C. Low Priority: These sellers are asking 5 or more times the MAX price you would offer for this home. In situations like these you know you will not likely be purchasing this seller’s home unless they drop their price an ‘unrealistic amount.’ These sellers are of the lowest priority because there is little help you can provide as an investor. These sellers are usually in great financial shape and can wait years until their beautiful home sells to the right buyer.
On the other side of that same "Low Priority" coin some sellers may be on the brink of foreclosure as their property is leveraged to the hilt with an ugly loan/mortgage. Many times as investors our best duty for these sellers is to offer the help of a licensed agent, loan modifier, or short-sale specialist to assist in the sale. "Low Priority" sellers make up approximately 40% of the mobile home selling market inside preexisting mobile home parks.
Looking logically at these three stages of sellers we can reasonably assume that over-time if a “Middle Priority” seller cannot sell their home (with no liens), this seller will lower the price and/or terms until the home sells to a buyer or investor. In a future article I will be discussing the obvious and not so obvious benefits to following-up with sellers repeatedly.
And you’ll find that a temporary no is just that, temporary.
Impact a life daily,