5 Reasons Not to Invest In Mobile Homes

by | BiggerPockets.com

Personally speaking, I believe that clarity is immensely underrated in today’s world.

Without clarity we find ourselves drifting through life, love, and business unclear about our next moves. Even worse we move forward with false ideas or misunderstood directions that may cause us to fall and stumble in confusion and costly errors. Clarity in any new business venture can likely be discussed for hours and hours concerning the ins-and-outs of every particular step of the business in which you begin.

This article comprises a quick list of 5 reasons why some investors may wish to steer clear of investing in mobile homes for profit. As a mobile home investor for the past 11 years I have come to understand both the positives and negatives of the manufactured home investing business. Below are some negatives.

1.) You Will Very Likely be Made Fun of at Times

When the money starts coming in you will be the one laughing and considered smart. Until then, however, many of your so-called friends and even family members will question and even laugh at your notion of starting down this road.

Mobile homes obviously have a reputation of being less valuable than traditional site built homes, and in many respects they are. To many unseasoned folks this translates as mobile homes being less profitable and therefore less worthy of our respect.

In reality however mobile homes, mobile home buyers, and mobile home sellers are just a worthy, kind, honest, wonderful, and deserving of our time and respect as anyone else.

2.) You Will Be Required to Talk Face to Face With People

Mobile homes require that you speak directly with sellers and buyers.

More than a real estate business mobile home investing is a people business. If you would rather work deals with a Realtor and/or simply stay behinds the scenes this business is likely not the best fit for you. With this statement said this is only from the experience I have had. Perhaps you are able to generate significant profits not interacting with mobile home owners however in my deals the greatest profits are the ones made directly by speaking with sellers and buyers.

3.) Many Older Mobile Homes Do not Meet Lending Requirements

To purchase a mobile home on private land or inside a mobile home park usually requires you using cash, private money, and/or some degree of creative purchase terms to control the property. This is because many lenders of mobile homes hold high requirements for underwriting mobile homes as well as the requirements needed by the mobile home borrowers themselves.

Large nationwide lenders as well as many local banks, the ones I have spoken with, require a minimum of 10% down from a borrower with good or better credit. While this is not a challenge for many of us the stronger difficulty comes with qualifying the mobile home for the lender’s criteria. The age, size, condition, set-up, location, and additions of the home all come into question when dealing with a lender deciding to put out their money for this loan. Some examples of requirements I have seen made by lenders on mobile homes are:

  1. the mobile home must sit on a cement foundation or slab
  2. the mobile home must be newer than 20 years old
  3. the mobile home must pass all current applicable codes
  4. the mobile home must sit on land owned by the same owner as the home

4.) Many Deals Do Not Result in Big Paydays

Due to many funding sources being difficult, but not impossible to obtain your exit strategy is one that will more likely result in renting or selling your mobile home for monthly cash-flow instead of a large cash payday. While the laws have changed in recent years and selling a home with seller financing is strict, the ability is not dead. With this said your ability to create an exit strategy of selling a mobile home for a large cash-payday will have to be properly understood and due diligence preformed before any purchase is made.

“John, but what about buyers with all cash?”

In short many end-user-buyers interested in purchasing a mobile home, whether on private land or inside a park will not have the $10,000 to $100,000 available to purchase a home outright. While it does happen, it is the exception.

5.) You May be Asked to Obtain a Mobile Home License to Continue Investing

Some states require that you become a licensed mobile home “dealer” after you have purchased a limited number of mobile homes inside a park within any 12 month period. This license does only apply to mobile homes inside parks. In a recent post on BiggerPockets I outline many of the states and discussed their state laws concerning becoming licensed once you purchase and resell “X” number of mobile homes per a 12 month period.


While I do not wish to deter anyone from their personal income goals and/or getting started with mobile home investing I would rather be frank and upfront with everyone rather than painting a rosy picture that mobile home investing is all smooth sailing. Over the past 11 years I have loved mobile home investing and it has been worth every moment of the ups and downs.

Love what you do daily,

John Fedro

About Author

John Fedro

Investing since 2002, John started in real estate accidentally with a 4-bedroom mobile home inside of a pre-existing mobile home park. Over the next 11 months, John added 10 more mobile homes to his cash-flowing portfolio. Since these early years, John has gone on to help 150+ sellers and buyers sell their unwanted mobile homes and obtain a safe and affordable manufactured home of their own. Years later, John keeps to what has been successful—buying, fixing, renting, and reselling affordable housing known as mobile homes. John shares his stories, experiences, lessons, and some of the stories of other successful mobile home investors he helps on his blog and YouTube channeland has written over 300 articles concerning mobile homes and mobile home investing for the BiggerPockets Blog. He has also been a featured podcast guest here and on other prominent real estate podcasts, authored a highly-rated book aimed at increasing the happiness/satisfaction of average real estate investors, and spoken to national and international audiences concerning the opportunities and practicality of successfully investing in mobile homes.


  1. I agree that the Lonney deal model is almost dead do to the Safe Act, homes on leased land. But we do ok with double wides on it’s own titled land here in GA. We buy a 2000 or newer on typically 2 acers or more for $20k to $25k. Put in a new AC maybe roof, applicances and rent to own for a year for $650 to $750, then do a Safe Act compliant owner finance on a 10 yr note fully amortizing (do to the Safe act). Bigger pockets has enough reading on Safe Act issues (mortgage loan originator, using a servicer, pre qualifying the lease option buyer etc).

    You talk down buy and hold and rent or rent to own. That gets long term capital gains and the owner finance spreads the sale over the entire length of the note term so you are reducing your taxes with depreciation, long term capital gains and deducting expenses.

    Flipping you pay the highest possible taxes. The math turns out heavily in favor of buy and hold and / or rent to own for a year (long term cap gains plus shake out the buyer) then owner finance.


  2. The negatives are less emotionally based for me.

    The biggest downside of investing in parks is dealing with park owners and managers. Its incovinient and many time costly to have other people with so much power over your deal.

    The biggest downside of holding mobile home with land as rentals is that you generally will only attract lower quality tenants. The cashflow appears great but low end tenants trash the place and have nothing to loose so evictions are common.

    Over the biggest downside that affects both (in park and home/land deals) is the overall small numbers, Sure the yield may look better but the numbers are so small that it takes a ton of time and effort for a pretty small overall return. Stick built houses deals can be the same amount of effort but the higher numbers means more profit for the same amount of time/effort.

    The upsides of Mobile home investing is that less money is required to get started and there can be opportunities that other investors will skip over so there is less competition.

    • Hi Gene,

      Sounds like you have a wealth of experience and have already made up your mind concerning investing in mobile homes. In the start of my career I had a rough time finding low-risk buyers and renters for my homes, because I was so green I did not know how to properly screen residents. This led to a strict screening process in my current business, as you likely have yourself. Today the only folks I sell/rent to watch over the property and when they do leave it is left in the same or better condition than when I let them in. Concerning park rent, it is going up on average however not to a degree unproportional to current market rents where profit is jeopardized.

      Thanks for commenting and please keep in touch.

      Small deals for everyone! 🙂
      John Fedro

  3. Hi Gene, I agree with Lonnie deals (flipping homes in parks) is near dead as is renting especially in parks with land rent going up.

    To me double wides on land titled as one entity like a stick built home is the only way a mobile home makes sense from a volumn investment perspective. We rent to own only with owner finance as the exit. We like the 10 yr note payments and the owner mentality. We get some down payment and we are seeing good quality people apply. Not the highest paying jobs, but good decent folks and it’s what’s in their hearts and their lifes plans that mater the most. Folks who want to succeed will generally do so.

    Just saying that there is a business if you filter and look at just one segment. Plus the hedge funds here in Atlanta area have eaten up other opportunities. We are doing want’s hated and selling what’s loved. LOL does that sound familiar?

    We sold our worst SFR tenant and rental to Blackstone for a crazy price. What dummies and now it’s in that new SFR bond they are floating. Gak!!! 2 months later my old renters text me that no one’s contacted them on where to mail the rent. I emailed the PM 3 times so far.

    You can loose $$ in SFRs and you can make money in mobile homes, it’s just how smart you plan your business. My wife a retired teacher has been a huge asset, adding that schools, filtering for good people and rent to own/owner financing are a recipe for us.


    • Good feedback Curt.

      I enjoyed reading about your past experiences and the Blackstone comments. Like your quote concerning it’s how well you plan out your business. Clarity is so important in this business.

      All the best,
      John Fedro

  4. The biggest drawback for me has been finding financing as an investor. That has been far oioutweighed by other benefits. I have strong tenant demand and cash flow. My tenant quality is decent, with average rents in the $900s. Good screening is critical here, as with all rentals.

    Mobile homes have allowed me to own land that is quickly appreciating while tenants carry my portfolio.

    Thanks John, for helping to provide clarity in this niche.

    • Hi Dan,

      My experience is limited to buying and selling individual mobile homes inside parks and attached to private land, and not with regards to the purchasing entire parks. With that said I could only think that when presenting an opportunity for you and community to be financed a previous track record of on-time income producing properties will only help your chances of being approved.

      Remember though when purchasing a park you will be applying for a commercial lender as this property is ideally already producing a healthy income stream. I would be interested what someone else with more MH park investing experience has on the matter. Thanks for posting.

      John Fedro

  5. Good article John!
    Some states have investor requirements like mobile home reselling. In Oregon, for instance, if you buy a stick built house intending to resell (investor), you need to be licensed, contractor, etc.

    Your 2010 article highlights some other pluses.
    Here’s a few more…..
    5 Reasons TO Invest In Mobile Homes – I’ve done 17 so far this year.
    1 – No competition – lots of ‘investors’, especially newbies, are fighting over the same bone on rehabs, auctions, wholesale, etc.I don’t run into many folks doing mobile deals.
    2 – Low cost/exposure – If I mess up or can’t quickly sell a rehab, I can be on the hook for $200-300k. Not so with mobiles. Screw up real bad and have a few to several thousand dollar risk.
    3 – Easy to juggle multiple projects at once. I’ve had 5 going at one point.
    4 – No one is financing older mobiles. Land Office Business.
    5 – People are calling me for deals. Very quick, cheap and easy to fix and flip..
    ‘nuf said!

    • How has the Safe Act impacted your mobile home real estate investing? Are you still doing as many deals and earning the same profits or are you finding it is near impossible to help those at the lower end of income?

      • Bill Neves

        We are doing deals as fast as we want to. A MLO or Mortgage Loan Originator can qualify people for loans. We’re finding a lot of people with cash these days so no loan needed. Going well.
        Thank you for reaching out.
        Yell if you have any other questions.

        • If you use a MLO, do you have to have your buyer qualify first? If they don’t qualify, then what? Do you first negotiate the deal, then send them to the MLO? How does it work if you use a MLO? – – how do you get paid and how much does the MLO usually cost?

        • Bill Neves

          The MLO person will qualify them. Yes, you want to pre qualify them so you don’t waste each others’ time. You cannot ask certain questions as the lender so general questions only. How much down do they have, how much is their take home pay, etc. Not social security and credit card numbers, ethnicity, religion, etc

          If they don’t qualify then they’re out. Next!

          Not sure about ‘how do you get paid’. We’re talking about you financing the deal. You just have to make sure the people qualify.

          If you want someone else to lend the money that is a whole separate discussion. If the place is new enough there are several lenders who will do that. Goggle ‘mobile home financing’.

        • So, you “qualify” them to simply eliminate those who you really can’t help, then send the others to get qualified fully by the MLO. If that is the case, then who negotiates the terms of the agreement? Such as how much down and monthly payment? Do you ever get what you need up front to cover your acquisition costs (price of home from original seller to you the Investor; plus rehab/fix-up/staging costs) for the deal or must you accept terms dictated by the MLO? Not understanding how the deal gets negotiated and completed.

          In this first scenario, how is it possible to help people who may not have the best credit get into a home to lower their monthly living expenses? Does’t this new Safe Act interfere with helping people who don’t have good credit but who qualify in every other respect?

          Also, if they have all cash, then they can buy without any complications, correct? Then it would just be the cost of transferring the title, wouldn’t it?

          Finally, I have read where investors simply rent out the home to the buyer and after so many months of paying the rent on time, they release the renter from the lease and transfer title to the renter. If the renter wants to become the owner, they may be asked to also pay for the title transfer fee and perhaps a small additinal amount to pay for any other associated costs in the title transfer. The rent payments have already covered the expenses up front and the “payments” if you will, for the balance of the amount the owner feels would be a fair profit. It’s like doing a Lonnine deal without the note paperwork. Have you heard of this?

        • Bill Neves

          Most parks, and that’s the deals I’m talking about, require a decent credit score. So if they don’t qualify with the park, they won’t qualify with you. In order to buy they HAVE to qualify in the park. So that process is a HUGE and first step.

          Transfer of title is under $100 in most areas, that I have seen. You can count that as a cost of business or let the buyer pay it. It’s not a big deal. No title company or realtor most of the time.

          You can ask what they can afford without discussing what their exact payment would be. Right? You would know what they need to pay, and by asking what THEY can handle you will know easily if they might make it or not.

          Yes, some people do a rent to own or lease option and when the term is satisfied, they transfer title. Good option for some.

        • Found your vimeo videos 1 & 2. Interested in getting more information re: mentoring. How do I contact you?

  6. Having lived in the Southern CA area for most of my life this type of investing worked great because of the numbers. If you can find a resonably priced park to buy in you could do really well because of home values and rental rates. A mobile home that is for sale for 15k and park rent of $450 per month can achieve a nice cash flow in the Inland Empire area of CA. The motivation to sell the home will determine if you can get a great deal from the seller or not. If that home is owned back lot rent then yes seller is very motivated to sell. Trying to work these number in the Los Angeles or Orange County areas forget it. the lot rent will push you out of the market. Better to go up to the High Desert areas outlying the LA county area.

    • Matt Bradley on

      Hey Gerald,

      I live in Southern CA and have about $25K I want to start using to invest in mobile homes. As you mentioned, I was thinking about searching IE area as well as a few others (all outside of LA). What do you think is the best way to find individual mobile homes for sale? Do you go to each mobile home park and talk to the managers about what’s for sale? Look for “for sale” signs on mobile homes?

      Just looking for any advice possible.



    • Matt Bradley on

      Hey Gerald,

      I live in Southern CA and have about $25K I want to start using to invest in mobile homes. As you mentioned, I was thinking about searching IE area as well as a few others (all outside of LA). What do you think is the best way to find individual mobile homes for sale? Do you go to each mobile home park and talk to the managers about what’s for sale? Look for “for sale” signs on mobile homes?

      Just looking for any advice possible.



  7. Cynthia Cott on

    I appreciate your views and advice, however you have made a gross error here. In the state of California, when buying to resell a mobile home, you MUST hold a dealer license even for one transaction. An initial fine can be assessed in the amount of $2,000 and subsequent fines can eventually lead to a jail sentence.
    In california mobile homes appreciate along with the housing market in general, regardless of the age of the home (as long as it is located within a mobile home park). Mainstream financing is available on homes much older than 20 years, albeit a larger down payment is required (normally 20% down).
    I am a mobile home dealer and work with a few private investors who are very pleased with the 10% interest on the 5 to 7 year notes they are receiving. The investors exposure is minimal since most loans are in the $15,000 to $20,000 range.

  8. Curt Smith

    For all of the above reasons of why lonnie deals in parks are tough to dead.

    Much safer and easier business model is to buy double wides on their own land out side of parks. They buy and sell just like any other piece of real estate. Some times the home title has not been retired and you have to transfer that too along with the deed to the land via a normal lawyer closing.

    I buy double wides, small fix up, then rent to own, and seller financing Dodd Frank compliant. A double wide is more of a manufactured home which is NOT in the bulls eye of Dodd Frank like single wides in parks are, which includes onerous licensing to sell them in some states as Cynthia mentions.

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