Interested in investing

[Nadene Long]

I have experience flipping houses and currently own a small portfolio of rental properties, but I’m considering a pivot into mobile homes.

I have access to distressed mobile homes that can be purchased for $1,000–$10,000. A deal I’m evaluating would look something like this:

Purchase: $5,000
Rehab: $25,000
All-in: $30,000
Rent: $1,500/month
Lot rent: $785/month

I would likely use a HELOC at around 5% to fund the purchase and rehab.

For those experienced in mobile homes:

• Does this model make sense when you don’t own the land?
• Would you use a HELOC for this type of investment?
• If your long-term goal was to own a small mobile home park or affordable housing community, would you start by acquiring homes or focus on acquiring land first?

I’d appreciate any insights from those who have successfully made the transition into mobile homes.

[Roger D Jones]

Following up with a bit more time.  I own several mobile home parks with a dozen or so POHs and these numbers are missing some key elements.

Taxes and insurance, rising lot rents that you will have zero control over and on going maintenance along with tying up your HELOC at 5% will consume whatever reasonable income you will generate. Furthermore your investing in a depreciating asset you will never get your money back on. A 5k trailer is a 5k trailer and even with a 25k dress on a pig there is no salvation. You start dropping 8k on a new roof or 4k on soft floors and water leaks you will never get on the right side of this deal. I have investors in my parks that have done this and they all say the same thing- I never should have done it.