Preference this post that I am still in the newbie classification and researching what area that I want to focus on. I live in the Tampa / St. Pete area of Florida. There are a large number of MH Parks in the area. I have started looking up MH on craigslist.com, realtor,com, and a couple of other sites. As I am evaluating the market there are MH that are 2/1 built in the 60's and 70's and a few 1990's that are either 2/2 or 3/2. The prices vary from 7,000 - 53,000. There are a few with land but I don't know enough about what to do if I were to attain these properties.
How did / do you evaluate your market?
Am I evaluating the market correctly? What am I missing?
@Doug Merriott thank you for the direction. Considering our market if snow birds and retirement groups do you believe that changes the way you view the market?
What exactly are you evaluating? House prices? Demand? Other? Your area def has demand, and the prices are going to be higher because of the area. People will gravitate close to areas with good schools, jobs and shopping. Look for parks with lot rent low enough to still squeez $200 or more out of a house payment. A good example: Lot rent $300, house payment $250. Total housing payment is $550. A bad example: Lot rent $400, house payment $150. Total housing payment is $550.
I certainly agree that MH investing makes sense for our area. I just do not have experience in it.
Welcome to the BP community. It is very wise of you to be researching your market before diving in head first without clarity. Over the past 13 years I have been investing in mobile homes on land and inside of parks. I now help people all over the country do the same. I make a mention of this because I can typically give very detailed advice about most areas of the country. However the Tampa market is where I began investing and where I still hold and invest today. So the info below comes from experience and not theory.
Josh brings up a very good point about "what" you are looking for with regards to testing in your local market. However with one test of a "FSBO" advertisement in the local paper or craigslist you will find your buyer demand and what they will pay for a 2 and 3 bedroom in your area. In the Tampa and surround markets (excluding beach properties) you can expect $750-$850 for 3 bedrooms in parks and $900-$1000 on land. Lower these prices $100 for 2 bedroom MHs.
As far as looking for mobile homes to purchase - do not spend over $6k for any home in this area. This is applicable around the country. Please note as an investor you are purchasing nice homes for below market prices. These sellers may have started by asking $15k+ however after speaking with you and negotiations they are now selling their property to you for a fast sale below $6k. In short do not over pay for any mobile home. Always aim to make all your money back int he first few months or 10 months max.
Q: How did / do you evaluate your market?
A: Test the market and analyze data. Here is a past post I made on the subject. http://www.mobilehomeinvesting.net/mobile-home-blog/testing-for-buyers-before-you-start-fraud-or-not-help-decide
Q: Am I evaluating the market correctly?
A: To start with yes. However understand we are purchasing mobile homes from motivated sellers and parks that need to sell fast. If the seller is asking over $25k this is not the sellers I want to be speaking with. I say "I" in that last sentence because you can choose to buy and sell whatever homes you wish. However I want you to be as profitable and move along the path of least resistance as possible.
Q: What am I missing?
A: Clarity in your market place. Who needs to move and when? What is everyone selling? What will my buyers pay? What is every local park like and how do they do business? Once you have this clarity then you can begin to make offers knowing you will make money when you resell.
Hope this helps and makes sense to everyone. If not please let me know.
Thanks for the shout out @Doug Merriott
@John Fedro great stuff!! If I am following you correctly I am looking for a MH built after 1990 that's a 3/2. My expected rent should be 750-850 or 1000 if on land? My evaluation from here will be based on the individual sell of the MH?
If you're looking to learn your market, it's best to research the areas you're interested in. The values will depend on the neighborhood and demographics regarding the market demand on what folks are looking for and how much they are willing to pay. I've found both park managers/owners and mobile home dealerships to be good sources of information.
Hope that helps!
Happy to help.
Do not simply disregard an attractive or profitable mobile home because of the age or the number bedrooms. Not only does the mobile home have to be one that is desirable to buyers, but in addition the seller should be motivated to sell quickly. The range of prices you can charge as a Move-in fee and monthly will vary depending on the condition of the home at the time of resale as well. Hope this helps and makes sense.
Good info Rachel.
The test ad recommended by John Fedro is fraudulent and illegal. It's a scam. The poster is advertising something they do not have and have no intention of providing at that time. Search the web to confirm this. A few web sites confirming this are:
Each occurrence I find of someone using or recommending the use of the test ad scam is being reported to the FTC, FCC and Attorney General. This establishes a record of the people involved in the scam so they may be held responsible for their actions.
Everyone is entitled to run their business as they see fit, but they are also liable for their actions and complying with the law.
Thanks for commenting @Al G.
Al brings up a great point. Like possible other steps many of us take as investors, or have taken as investors, to help protect ourselves and have the ability to help others may be frowned upon by other investors, society, local governments, or specifically written as fraudulent or illegal. With that said there are multiple methods to reach any outcome to move forward protecting yourself, your buyers, and staying compliant with local laws.
Everyone reading this post is an adult that can and will operate their investing businesses as they see fit. Hopefully everyone here always follows the laws, stays ethical to help all sellers, and sells good quality homes to good low-risk buyers. With that said this investor and this website always wish to make sure people proceed safely and within the scope of the laws.
With all this now said we can come back to the real world to mention that clarity for your niche and your investing business is key. However you choose to "ethically and legally" reach a clear understanding of your market demand and understanding of your local buyers is highly suggested before you make any offer to purchase your next investment mobile home.
When in doubt understand that you can resell a mobile home in a park for approximate local apartment rent. If a 3/2 apartment nearby (not a luxury apartment) is renting for $800 per month, then you know you can resell your 3/2 1980 and newer mobile home for $800 per month including lot rent and insurance fees. For mobile homes older than 1980 please subtract $100 per month.
Thank you Al for watching over our real estate community and alerting the authorities should you find any infractions.
All the best,
John, thanks for the response but you did not address the test ad issue.
Are test ads fraudulent and illegal?
The test ad poster is advertising something they do not have and have no intention to provide at that time. The sole purpose of the ad is to gather market data cheaply so they can potentially make money.
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