Mobile Home Flipping - How to analyze?

Question

Hello!

I'm interested in entering the mobile home investing space and I wanted to see if anyone has any guidance on underwriting these deals?

I already own property in Oklahoma (a quad) but I live in San Diego, so I want to enter my own market and this would be a more affordable way to do that.

I have already had experience in analyzing house flips so I'm confident in my skill set there, but how should I expect mobile house flips to differ from normal house flips when it comes to ANALYZING the deal

Any help is very much appreciated!! Thanks :)

PS. If anyone knows anyone mobile home investing in Southern CA, I'd love to be connected!

Mary Ainsworth · Answer

Thank you Rachel!! So helpful, I will definitely be reading through the links you send me on the subject too - I'm trying to get all the education I can get right now.

I did want to ask, when you buy in a park, do you buy the land too or just the mobile home and flip that? If you buy just the mobile home, do you ever have to move it?

Thanks :)

Rachel H. · Answer

@Mary Ainsworth Good question! When I buy homes in parks, it's just the home. Usually, the park owns the land/lot where the home sits on.

Regarding moving mobile homes, I've done it several times in the past. Usually, it's because it's on a piece of land and needs to be moved. Or, it may be in parks I usually don't do business in and move them to other parks I do business in that give me incentives (i.e. pay for moving costs, hookups, free lot rent, etc).

Feel free to let me know if you have any other questions. Hope that helps!

Lindsay Tucker · Answer

Are you financing? I've come across a few lenders who specialize in this type of deal. If you're looking to chat with one, I can put you in touch!

Rachel H. · Answer

@Mary Ainsworth Learning the market when it comes to mobile homes is similar to single-family homes. You just want to be as close to the subject property as possible when running comps.

In the mobile home investing space, I've found the best source of information for market insight are the park manager and/or owners (if you're buying in a park) and mobile home dealerships (if buying out on land) as well as real estate agents who specialize in the niche.

Personally, I've been in the mobile home space since 2007. It's been quite a rollercoaster with its ups and downs. I started out buying and holding homes for cash flow. Now I've added to wholesaling mobile homes as a revenue stream.

Like any other niche in real estate, it has its ups and downs. Overall, it's been quite profitable.

If you have any other questions, feel free to DM. Hope that helps!

Mary Ainsworth · Answer

Thanks so much for the info, Dan! I have already started researching Andy and reached out to Justin too, thanks for those contacts. And that is good insight regarding the level of effort and ROI. At this point in my investing career I'm okay with exerting more effort than I necessarily need to as I'm still learning a lot and right now what I DO have to offer is time. But I suspect eventually I will get to that point as well where it may not be worth it!

Dan H. · Answer

Google Andy Teasley.   He is the mobile home flipping god for So Cal and he regularly speaks at RE meet ups.  I have heard his spiel twice.  My opinion is he works harder than I desire to work on my RE investments.  Never the less, you will want to hear his presentation to Know what is possible.  For example I highly suspect he purchases for a value that will shock you. For example 5 years ago he was purchasing for $3k.  His rehab costs were less than what I Typically pay to paint the interior of one of my rehabs.  virtually everyone doing mobile home flips in So cal has heard Andy’s presentation.

@Justin R. did a higher end mobile home flip in San Diego quite a few years ago (6 years ago?).   He typically achieves good return on his efforts but I do not believe I ever saw/heard his final numbers of this effort.  The question is would he do another especially with return that he can achieve on his smaller development efforts?  I am genuinely curious but would guess he would not at this stage of his RE investing path.

My belief is most value is to be added on highest cost asset.  Asset over $1k/ft is likely to value from an added bathroom significantly more than an asset valued at $500/ft.   I have not rehabbed a mobile home, but they are some of the cheapest RE assets which leads me to believe significant effort is necessary to add significant value.  Versus my last rehab an added half bathroom was worth ~$50k according to the data.

Good luck

Mobile Home Flipping - How to analyze?

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