Mobile Homes

The Pros and Cons of Wholesaling Mobile Homes

Expertise: Personal Development, Real Estate Investing Basics, Business Management, Mobile Homes, Real Estate News & Commentary, Landlording & Rental Properties, Mortgages & Creative Financing, Real Estate Marketing
224 Articles Written
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In 2019, mobile home prices in many areas around the country are seeing a small or noticeable increase in selling demand and prices. This is more noticeable in some areas versus others.

The reasons are simple. They partly stem from single family home prices and apartment rental prices drastically increasing. The high cost of living the more traditional ways is pushing people to purchase mobile homes on private land or inside pre-existing mobile home parks.

This higher buying demand may allow you to more easily wholesale used mobile homes to buyers inside of mobile home parks, on private land, or in must-be-moved locations.

Disclaimer: If you are licensed as a mobile home dealer, mobile home broker, or Realtor, you may be able to broker mobile homes instead of wholesaling them. Brokering mobile homes involves entering into a contract with the seller to be their personal property mobile home real estate agent and help them find a buyer.

What Is Wholesaling?

Wholesaling a mobile home equates to assigning your mobile home purchase contract—an agreement between you and the seller—to another buyer via an assignment agreement for a higher price. You never own the home.

Quick reminders about the mobile home wholesaling process:

  • Wholesaling a mobile home located on private land: Once the seller and you have negotiated a verbal win-win purchase price/terms, a "Purchase and Sale Contract" should be entered into. You will then quickly aim to find a buyer that wants to purchase the mobile home contract from you at a higher price. The potential buyers will want to walk through the property to examine the home for themselves prior to closing. The difference in price between the amount you agreed to purchase the home for, and what the new buyer agree to pay, is your profit. This may be paid out before closing or at closing by a title agent, escrow officer, or closing attorney.
  • Wholesaling a mobile home inside a pre-existing mobile home park: Once the seller and you have negotiated a verbal win-win purchase price/terms, a “Purchase and Sale Contract” should be entered into. You will then quickly aim to find a buyer that wants to purchase the mobile home contract from you at a higher price. The potential buyers will want to walk through the property to examine it for themselves prior to closing. The potential buyer may wish to get approved by the mobile home park prior to closing. The difference in price between the amount you agreed to purchase the home for, and what the new buyer agreed to pay, is your profit. This amount is ideally paid to you as a nonrefundable deposit by the potential buyer prior to the potential buyer filling out the mobile home park’s application. This amount is paid directly to you and is your fee for wholesaling the mobile home. Your buyer will then pay the purchase price you negotiated directly to the seller and take title to their mobile home.
  • Wholesaling a mobile home when the mobile home must be moved: This method is very similar to the steps above, however no park approval is needed prior to closing. Having relationships with mobile home movers can be helpful to point your buyers towards for prices and moving questions.

mobile-home

Pros to Wholesaling Mobile Homes

Wholesaling mobile homes is certainly not the end-all be-all of mobile home investing. It is simply one more tool in your toolbelt. Wholesaling mobile homes can help in situations where you cannot close on an attractive mobile home opportunity.

1. Potential quick cash

When wholesaling or assigning mobile home contracts we are typically making smaller quick chunks of capital a few thousand dollars at a time.

2. Minimal capital risk

While wholesaling or assigning mobile homes there is little to no money out of your pocket, except for advertising and transportation costs. You do not pay any holding costs.

Optional: Depending on the condition of the home and your confidence on an all-cash sales price, you may want to make a few strategic repairs in order to sell the mobile home quicker and for a higher price. However if you are not able to resell the home you may lose this money invested unless you place a small lien on the property.

3. No credit check

While wholesaling mobile homes you will not need to get approved by any mobile home park unless you plan on actually closing on the mobile home and taking ownership.

Happy young man on phone, indoors - inside. Close up of businessman talking on mobile phone - smartphone. Comunicative friendly hispanic man

4. Knowledge gained of the local market

Whether you are able to sell a mobile home contract for a higher price, or you have to walk away without fully helping the seller, you will certainly learn more about what buyers are willing/able to pay all-cash in your local market, depending on the mobile home and neighborhood in question.

Pro Tip: As an investor, you may also wholesale a mobile home Purchase Contract you negotiate with seller financing (making monthly payments to the seller for the purchase price). This would allow your buyer to make payments to own the home instead of paying an all-cash price. This would allow the buyer to pay you an all-cash assignment fee and then make payments to own the mobile home directly from the seller.

5. Estimating repairs better and better

While wholesaling mobile homes you will need to take into account what your end-buyer is going to be spending to rehab the mobile home before placing it on the market for a profit.

Pro Tip: When estimating repairs aim to get written bids by handymen or contractors when it comes to rehabbing the subject mobile home. The more information you can provide the potential buyer the better.

6. Growth to reputation

The more mobile home owners you are genuinely able to help, the better. Mobile home folks typically know other mobile home folks. Your name will get around because you become a local authority in the marketplace that is easy to talk to, friendly, and typically able to offer some type of help. The squeaky wheel gets the grease. Be assertive when speaking with mobile home owners, sellers, park managers, and more. We want to make sure people know how we may help, our phones are always on, and how to work with us moving forward.

Pro Tip: Aim to have a mobile home buyers list prepared before ever wholesaling a mobile home contract. This is not required however will certainly expedite your first few mobile home contract assignments.

Wholesaling Mobile Homes: The Cons

While wholesaling mobile homes there may be a few unexpected negative consequences that you may find. Some of these negative consequences are…

1. Burning bridges with mobile home parks

You may sell to someone that wishes to remove the mobile home from the current mobile home park. If your name ever gets back to the park manager that you are involved in the deal, you could burn a bridge with this mobile home community. Mobile home park managers and park owners do not want to deal with investors that remove homes from the community. Unless the park is genuinely happy for this particular home to be removed.

2. Negative reputation

You will not be able to wholesale every mobile home you get under contract. It is important to never over-promise when your intention is to wholesale a mobile home. Important: Be honest with your sellers and buyers. Let your sellers know that you have a large buyers list and will likely be able to locate a serious cash buyer. Do not promise that you will necessarily purchase the home yourself. Let your sellers know that you are working with the buyers to purchase their home and pay the seller the price agreed to in the Purchase Contract.

Pro Tip: Blast all your properties for sale to your buyers lists immediately. There is no time to wait around. If you are unable to find a serious buyer in a few weeks or less, do not waste the seller’s time or money by keeping the mobile home under contract any longer. Let the seller loose and encourage them to continue reselling it online and off-line as much as possible.

3. Getting cut out of a deal

While dealing with mobile homes attached to private land there are methods to cloud the title/deed or sue a seller for nonperformance of a contract. However, when dealing with mobile homes considered personal property, there is little way to prevent the seller from going around you if they truly want to cut you out of the deal. Holding the seller’s mobile home title (if applicable) would provide you some protection however a duplicate may be made and resold before you are able to find a buyer.

Real estate agent handing the house key

Example of a seller going around you: You do all the work to find and negotiate a mobile home in a park for sale and get a Purchase Contract signed. The buyer you are working with talks directly to the seller and agrees to pay them $500 more to sell the mobile home directly to them. You are now cut out of the deal for connecting the seller and buyer. This does and will occasionally happen concerning mobile homes considered personal property. In these situations we proceed forward with business as usual and never work with this buyer and seller again.

Should You Hold onto the title(s) Prior to Closing?

Concerning mobile homes that “must be moved” and mobile homes located in pre-existing mobile home parks, it is ideal if you are able to hold onto the seller’s mobile home title(s) while you are locating an all-cash buyer that wishes to own the seller’s home for a price higher than you are paying. Holding onto the seller’s mobile home title while wholesaling will help prevent the seller from going forward with another buyer and cutting you out of the deal. While holding onto the mobile home title is preferred, many sellers will simply not feel comfortable handing you their mobile home’s title without any money exchanged. In these cases we move forward as usual by trusting the seller and not holding onto the title.

Pro Tip: Aim to only deal with sellers that truly appreciate your service and want your help. If you find yourself “selling yourself” then this may not be the right opportunity for you. You will experience problems and be cut-out of deals by sellers that do not see your value and appreciate you from the very beginning of the arrangement. We are looking for sellers that are fed up with their situation and tired of doing things on their own.

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Free Mobile Homes—Wait, What?!

Mobile home sellers that are selling free mobile homes are more likely to hand over their titles and sign a Bill of Sale without you giving them any money. In these situations, it may be wise to place the mobile home’s ownership into your name, a trust, or your company’s name before reselling it to the next buyer. Keep in mind if you transfer ownership you may need to get approved by the local mobile home park and pay transfer costs to the state on the mobile home title. Additionally, depending on the state it may take a few weeks or months for your new title to be delivered via mail. If your state is slow with title transfers and mailing new titles than it would be wise to simply wholesale this mobile home via a Purchase Contract with you and the current owner, and an Assignment contract between you and the buyer.

Wholesaling mobile homes can certainly be helpful and provide you with another strategy to help sellers, however it is typically not a mobile home investor’s main strategy for creating value with mobile homes. Like many things in real estate, a mobile home wholesale deal can be quite simple or very complicated depending on the specific situation and people involved. Moving forward if you have any mobile home wholesaling or mobile home brokering questions, deals, or concerns never hesitate to comment below.

Love what you do daily!

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Do you have any questions for me about investing in mobile homes?

Ask me in the comment section below. 

Investing since 2002, John started in real estate accidentally with a four-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 insights of other successful mobile home investors he helps on his blog and YouTube channel and has written over 300 articles concerning mobile homes and mobile home investing for the BiggerPockets Blog. He has also been a featured podcast guest on BiggerPockets and 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.

    Wenda Kennedy JD from Nikiski, Alaska
    Replied 2 months ago
    Stay away from my park!
    John Fedro Investor from Austin, Texas
    Replied 30 days ago
    Hi Wendy, You got it! I am seldom in Alaska anyway. :)
    Jason Mathew Investor from Spring, Texas
    Replied 2 months ago
    Thanks John for the great info as usual..
    John Fedro Investor from Austin, Texas
    Replied 30 days ago
    Hi Jason, Great to hear from you! Thanks for commenting. Keep in touch.
    Brian Gibbons Investor from Sherman Oaks, California
    Replied 2 months ago
    There is no one better than John Fedro with "All Things Mobile Homes"!
    John Fedro Investor from Austin, Texas
    Replied 30 days ago
    Hi Brian, Haha This one definitely put a smile on my face. Thanks for commenting and the kind words, Brian. Here if you need anything.
    Tyler Ford Real Estate Agent from Tucson, AZ
    Replied 2 months ago
    Thanks John! John is the best when it comes to mobile home investing coaching.
    John Fedro Investor from Austin, Texas
    Replied 30 days ago
    Thank you, Tyler! Keep up the seriously great work in Tucson!
    John Peters
    Replied 2 months ago
    Hey John, I wanted to get involved in wholesaling mobile homes and wanted to know if it could be done and profitable on Long Island, NY? Also can this be done in another state without me ever going there all on the phone? I love nationwide sales across the country over the phone! Please advise & Thank you in advance. John
    John Fedro Investor from Austin, Texas
    Replied 30 days ago
    Morning John, Thank you for reaching out and connecting. I will first address your question with regards to investing outside of your local area. I definitely agree with you that most of your "buy-and-hold" mobile homes will be outside of your area in New Jersey, Pennsylvania, and a bit up state New York. With that being said these areas are good for buy-and-hold type of mobile home investing. There also good for wholesaling mobile homes however in my experience and opinion you should absolutely have some boots on the ground as well. Wholesaling mobile homes through the Internet and telephone are really not very realistic.... I do not want to pretend that they are. This is a people business and it almost always involves dealing with people in one-on-one interactions. We definitely do things over the phone however even with folks I am working with that live in Manhattan, they travel outside of the city weekly to build their mobile home investing business. With that said, concerning your question about wholesaling mobile homes in the Long Island area. Yes, this is possible however you will certainly need a buyers list of people that are interested in purchasing a mobile home quickly and ideally for cash. Keep in mind that there are many other scenarios in situations that may take place during your deal that could throw a monkey wrench or few more challenges into the deal. It is for some of the reasons above that investing in mobile homes and only wholesaling is not a good idea in my opinion. When dealing with mobile homes you should be willing and able to buy them, sell them, rent them, look at them on land, move them if needed, wholesale them, etc. Hope this all helps and makes a bit a sense. I feel as if I was rambling at the end but hopefully this all helps answer your question. If you have a follow-up question never hesitate to reach out any time. All the best. Talk soon, John
    Angela Hagen from Belton , MO
    Replied about 1 month ago
    Are you wholesaling these to investors or directly to tenant buyers?
    John Fedro Investor from Austin, Texas
    Replied 30 days ago
    Hi Angela, Both. However if the mobile home is located in a pre-existing park am usually wholesaling it to an end-buyer. However if it has to be moved or on private land I may more likely be wholesaling to an investor. With that said there are definitely a bunch of exceptions as well. This is a pretty vague answer however I hope it helps a bit. Moving forward if you have any follow-up questions never hesitate to reach out any time. All the best.
    Brandon Moore from Central Arkanas
    Replied 28 days ago
    Great read, I have watched a few of your videos on YouTube and it has sparked my interest in mobile home investing and wholesaling. Thanks!
    Ashley Simpson
    Replied 11 days ago
    Is the assignment agreement similar to a real estate assignment agreement? I’ve been wholesaling real estate for about two years now and starting to get into the mobile home wholesaling and investing so I just wanted to know what’s the difference between the assignment agreement.
    John Fedro Investor from Austin, Texas
    Replied 10 days ago
    Hi Ashley Simpson, Thank you for reaching out and connecting. Great job wholesaling successfully for the last two years. I have no doubt that these deals and successes did not come without a great deal of hard work and daily effort on your part. Keep up the great work! When it comes to mobile homes, yes the assignment agreement can be very similar to that of single family homes while selling. Hope this helps and answers your question. Moving forward if you have any follow-up questions never hesitate to reach out any time. All the best. Talk soon, John