How to Avoid the 5 Most Common Pitfalls Mobile Home Investors Face

by |

As an active mobile home investor, you likely have been reading and studying as much as possible concerning working with and helping local mobile home sellers and buyers in and around your area. Most of these how-to articles and videos will express the importance of what to do correctly, as well as proper procedures from start to finish. However, in this article, let us discuss some common mindset pitfalls even seasoned investors may experience while investing in used manufactured housing.

5 Common Pitfalls Mobile Home Investors Encounter

Pitfall #1: Thinking you’re a master negotiator.

Do not be fooled by your smooth negotiation skills. Here is a situation that will absolutely happen at some point in your mobile home investing career: Within a matter of minutes, you are able to negotiate a seller to accept a 50%+ discount off of his/her original asking price. At this point, you pat yourself on the back and rush over to the home with cash in hand. This may be a costly decision.

Mobile homes inside pre-existing mobile home parks are particularly susceptible to this negotiation pitfall. A seller who is willing to discount his/her property 50% over the phone may be selling you a ticking time bomb, or perhaps the seller is simply motivated for innocent personal reasons. Either way, proper due diligence must be factored in with regard to acquisition price/terms, holding costs, estimated repairs, resale demand, hard to spot issues, exit strategies, etc. when making any purchase offers to any seller(s).


Related: 4 Due Diligence Steps to Take BEFORE Purchasing a Vacant Mobile Home

Pitfall #2: Treating factory built homes like single-family homes.

This is a mindset pitfall with so many fallacies. While it is debatable that modern-day manufactured homes are of comparable or better construction quality to many site built homes, factory built homes and site built homes are like apples and oranges, i.e. very different.

  • Manufactured homes and SFRs appreciate differently.
  • The construction is different.
  • The sellers can be different.
  • Homes located inside pre-existing mobile home parks versus attached to private property are very different.
  • Financing is different.
  • The buyers can be different.

Pro Tip: This is a common pitfall when estimating resale price and demand for an investment mobile home. Aim to always base your exit strategy on a realistic price determined by recent comparable sales and time on the market data within a two-mile radius of the subject property or within the specific mobile home community (if located inside a mobile home community) within the past three months.

Pitfall #3: Purchasing the home quickly without an inspection.

If you have not purchased a mobile home in the recent past or you are not a seasoned mobile home handyman, always consider hiring an expert to walk through any investment home with you to point out minor and major repair issues that may otherwise go unnoticed. Any additional repairs spotted should absolutely be reduced from of the current negotiated price. This will likely more than pay for an inspector you hire. Handymen and handy-women may also walk through your property for a small fee or simply as a free to consult on which repairs they would/will fix if/when you hire them.

Pro Tip: Follow your inspector and/or handyman around the property and ask questions when possible. This is a great way to learn what inspectors are looking for and possible repair estimates for future walk-throughs.

Pitfall #4: Assuming senior mobile home communities and all-ages mobile home communities are the same.

Many mobile home investors may be biased or jaded towards senior-citizen-only mobile home parks. This is typically because senior citizen communities restrict a major portion of society that is actively looking to purchase mobile homes. This in theory may make the senior-home harder to resell; however, every home works on a case-by-case basis. With proper due diligence, good foresight, adequate negotiations, and a clear knowledge of your local market, you can buy mobile homes in both types of parks that are desirable and profitable.

Pro Tip: Make certain there is strong resale demand with any new real estate niche you invest in.


Pitfall #5: Thinking the park will handle your application process.

Almost every mobile home community will have some form of a screening process to vet every new adult resident who wishes to live in the community. This screening process may include a background check, credit check, verification of income, reference check, predator check, etc. While some mobile home parks perform a very thorough and complete tenant background screening, other parks simply look for adequate income and nothing more. Some mobile home parks will verify criminal history nationwide, and others only check the local state database.

Almost always preform you own due diligence. You have worked hard to get to a point where you own another investment property ready to be rented or resold. If you are planning to have a long-term relationship with this renter or tenant-buyer, make certain you know the person(s) that will be living in your property. There are many great tenant-screening services online, including the tenant-screening feature located here on BiggerPockets.

Related: The Top 5 Reasons Investors Are Loved & Hated Within Mobile Home Communities

Pro Tip: If you will be reselling a mobile home via owner financing, make certain your application process meets current seller financing restrictions. The use of a mortgage loan originator may be needed to properly screen and verify that your buyers are qualified and have the ability to pay.

In conclusion, many of these pitfalls are typically preceded by surges of excitement and emotion. As you skillfully negotiate a deal, your excitement level may rise. Additionally, whether you are estimating repairs solo or are about to rent an investment mobile home to the first person with money, your emotions may cause you temporary blindness of your better judgment. At these times, it may be wise to take a deep breath, gain clarity, and ask someone more experienced if help is needed. The forums here on BiggerPockets are a great resource of knowledge if you are willing to ask the questions. Continue to take action and help others daily.

What pitfalls have you fallen prey to as an investor?

Let me know with a comment!

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 Comment

  1. Curt Smith

    Hi John, Thanks for your continued posting on mobile homes and parks. I didn’t see mention or a link to a past blog or post on developing a relationship with the park manager BEFORE you even bother to talk to any seller in the park?? Any URLs you can post here?

    We’ve bought 18 double wides on their own land in 2 yrs. We’ve stopped because the good inventory has run out here in GA via and REO via zillow. Nothing since last Sept meets our business rules: 10 min to major freeway, 30 min to major job GROWTH center. Newer than 1998, light rehab and purchase plus rehab being all in under $35k. Yes we easily stayed under our all in limit almost all the time. 🙂

    The worst issue I found was old CPVC piping that turned brittle and cracked like eggshells. I’ve had to repipe nearly every one with CPVC. But its just $750 to $1200 to repipe an entire double wide, so not the end of the world. You have to advertise in craigslist gigs for the repipe job and price. Otherwise retail plumbers will bid crazy prices.

    Out of 18 doublewides we’ve NEVER replaced a bathroom. Just one bath vanity. Just one kitchen had to be torn out but I rate buying that wreck a business error and I should never have bought that one, so my record should still be: zero baths and kitchens replaced when buying 1998 or newer in good shape.

    Rehabs are typical: paint, flooring and some electrical fixture upgrade and kitchen faucet and new appliances. 50% of the time a new 3ton heat pump. No heat pump rehab is $9k or so, with heat pump $13k or so. Ive done few roofs. 2 I believe so I’ve gotten off well there too. No deals on double wide roofs. Decking is so poor a roof always includes a bunch of decking so the price is still $3.5k same as a stick built or even more.

Leave A Reply

Pair a profile with your post!

Create a Free Account


Log In Here