Looking to learn how to invest in Mobile Homes
Investor · Belleville, NJ · Member since 2016 · 14 posts · 4 votes
Can someone introduce me to a system where I can invest in mobile homes and parks? The state doesn't matter. Thanks.
for just the homes or "lonnie deals" John Fedro is the guy, his site is http://www.mobilehomeinvesting.net/
For the parks they have http://www.mobilehomeuniversity.com/
but for a great breakdown of mobile home parks without buying a 500 dollar course or going to a bootcamp you can't do better IMO than the mobile home park investing podcast done by park street partners - bigger pockets also interviewed jefferson (of park street) on one episode if you just want to sort of "take a peak" at the industry
for just the homes or "lonnie deals" John Fedro is the guy, his site is http://www.mobilehomeinvesting.net/
For the parks they have http://www.mobilehomeuniversity.com/
but for a great breakdown of mobile home parks without buying a 500 dollar course or going to a bootcamp you can't do better IMO than the mobile home park investing podcast done by park street partners - bigger pockets also interviewed jefferson (of park street) on one episode if you just want to sort of "take a peak" at the industry
@Kevin Schulte Thanks for the info!
Those are all great sources. I'd also recomend Mobile Home Wealth by Zalman Velvel. I like his book because it discusses several strategies and doesn't leave out investing on mobile homes with land which is in my opinion the easiest transition from SFH to manufactured because you can find and sell on MLS. They're more expensive than just chattle (mobile homes themselves), but offer the same great returns on renting and selling.
@S.M. Morton @Kevin Schulte @Rich Ferradino
Another fantastic podcast is Real Estate Investing for Cash Flow by Kevin Bupp. I've listened to over a hundred hours of podcasts by this guy. He focuses on Mobile Home Parks but brings on heavy hitters from many real estate related industries. As a new investor (I own a small mobile home park), the knowledge and experience gained from Kevin is invaluable. From basic management stuff to raising private capital (which is what I'm currently working on), it's all there.
Don't forget to listen to the podcasts at 1.8X speed for efficiency, of course :)
You'll get used to it after a while and then you can listen to a LOT of content in a much shorter time.
Best of luck!
Thanks for the reference. I'm more of a just the facts/ meat and potatoes kind of guy. I'll definitely check it out.
Another good podcast is Mobile Home Park Investors with @Jefferson Lilly and Brad Johnson
Welcome to the group.
I do a lot of mobile homes and would be happy to answer any specific questions.
Fire away!
Frank and Dave's Mobile Home Park 3 day course is the absolute best course by far. It's totally worth the cost and it's the only real estate investing course I've been to that is worth anything. These guys are the real deal. They are some of the largest mobile home park investors in the country. They give you everything, all their forms, their formulas for deciding to buy, their management systems, the information on their own parks and how well they did on those and why, plus they'll review a park that you are considering purchasing and advise you on whether or not it's a good deal and why. They are nice guys, totally classy, tremendous integrity. They give you contacts for financing for parks as well as buying replacement mobile homes. When they learn something great, they pass it along to you. They have a forum on their website (mobilehomeparkuniversity.com) that features their active participation as well as that of several other owners of multiple parks. It's the best advice on the Internet.
@Karen Morison @S.M. Morton However, Frank is against mobile home investing and he explains why during the boot camp. It all depends on what are you investment goals? You need $2.5-5k to flip a mobile home and $50k+ to get a park.
@Andriy Boychuk Yes, that's true. He and Dave both think that Lonnie's mobile home model does not work for a variety of reasons which are too long to go into here. They believe, and they're right, that the best way to own a park is to NOT own the mobile homes. If you buy a park that owns the homes, they have a system to sell the units to the people living in them. This way, the owner doesn't have to deal with repairs, etc., which can really kill your profit margin. The best way to be a park owner is to own just the land and rent out the spaces to tenants who own the homes. This way, they have a strong disincentive to move because it would cost them $3k-5k to move the mobile home to a different park, and most owners don't have that kind of cash available. Obviously, there's more to it but that gives you an idea of their approach. Also, the key with buying a park is how much it produces (that's ALWAYS the issue for commercial real estate) and what the per unit price is. Not all $50k parks are the same! (By the way, I wouldn't waste my time on a very small park. There's likely no growth potential. Frank and Dave especially are very good at buying parks and adding a lot of value then selling them for big profits.)
While F&D are clear they don't want to own homes, they don't say it's a bad business - it's just not the business for them for the aforementioned reasons. They have many Parks where they partner with Lonnie Dealers to help fill lots, repair older homes, etc so that as Park Owners there is less up front investment. Operators should be very careful about screening those Dealers to make sure they have a track record of bringing in quality tenants that reflect the other Park tenants as much as possible. There are more bad stories about Lonnie Dealers than good (when talking to Park Owners).
Investing in either of these can make you money, it's really about your available capital (as per @Andriy Boychuk), investment goals along with your approach to get into the industry. I think doing a Lonnie Deal or Land Home deal is a great way to get your feet wet understanding mobile home construction, repairs, finding qualified contractors, knowing how much to pay, etc and positions one well for those things as part of Park Ownership.
Many Parks have Park Owned Homes as part of an acquisition, so it's difficult to say as a Park owner you will never have to deal with them!
All the best!
@Karen Morisonthank you for clarification. It all depends on how big you want to grow. Mobile home investing is good enough for some cashflow. @
I also came across John Fedro but he will charge you money to work with him if you want to go beyond the free you tune clips. Others I know who do it and are successful all did "Frank and Dave's" boot camp. It's a weekend long. $2K I think but you can double up with someone and split it. There is also content they have online that is cheaper.. Videos Etc.
Good luck! Great cash flow.. There is a reason Warren Buffett owns about half the mobile home parks in this country..
I guess my question is, "Why would anyone expect someone who has real expertise in a subject not to charge for their help"? They most likely spent years of their time learning what they know, and someone is now asking for their time to share it. ( Disclosure: I and my entire staff also charge for help.)
Frank and Dave do have the very best of what is out there to learn about community ownership. I say this even though I do not always agree with everything they preach. Part of the reason I make the statement is that no one else has stepped up to offer this kind of detailed information because others are too busy making money for themselves and their respective organizations to take the time to do this, so Frank and Dave are it - if your goal is to own communities. It is worthy of note to know the original guy doing this (years ago) charged five times for his boot camp what they charge today and delivered far less information and detailed materials. Their pricing is a bargain.
Most larger and more successful community operators are not interested in Lonnie Deals because they have better methods available to them. They certainly are not interested in renting homes because that lowers the value of the community and cuts profits substantially through increased overhead. Frank and Dave are correct in not recommending this to community owners from the perspective of large and successful community owners.
There are a number of smaller community owners who benefit from joint ventures with Lonnie Dealers however. Our company pioneered this concept three years ago and have helped numerous community owners and Lonnie Dealers prosper in a post SAFE Act and Dodd-Frank Act world of regulations. To the best of my knowledge, we are the only authoritative source for a program of this type that addresses, and stands behind, the methods we teach.
I'm not sure the original poster was asking about owning communities however. The way I read the post, they were more interested in doing Lonnie Deals.
Choosing which way to go depends, in part, on how much capital one has to invest.
Doing Lonnie Deals is, normally, for someone with less than $50,000 to invest in their business. Owning a community is generally for someone with more than $50,000 to invest. The single largest mistake someone going into any business can make is underestimating how much capital and capital reserve is necessary. It is important to know one's limitations and start small enough their capital and capital reserves are sufficient. While money can be borrowed, the basic rule of business is that there needs to be a 20% equity in what is borrowed, unless very sophisticated strategies are being utilized. (At one point I owed almost $400,000,000.00 dollars indirectly but I certainly did not have a net worth equal to 20% of that. I was using a sophisticated process to borrow money to make consumer purchase money loans. That debt was paid by the sale of the loans to a large institution in early 2013 at a very nice profit for me along with the profits I had been taking all alone. So while the 20% rule is important and practical, there are always exceptions.)
The point to all this disclosure is: Anyone who tells you that you need little or no money to start a Lonnie Dealer business in today's regulatory environment is either mistaken or duplicitous. Those people who listen to that siren song will invariably end up penny wise and pound foolish, making serious mistakes out of desperation and not sleeping well at night. If the amounts of money that Frank or Dave charge seem outrageous, you should not even consider owning a community because you do not have enough money to do so. The same holds true for any other organization or individual offering education and help - including Rishel Consulting Group. This is especially true today given the complicated regulatory environment almost every business now faces. Do not start any business unless you have the resources to fully comply with the government requirements for that business.
One last thing. Warren Buffet owns many things including the two largest consumer lenders in the manufactured housing industry and the largest manufacturer of manufactured homes along with some smaller ones. What he does not own is manufactured housing communities.
Can someone introduce me to a system where I can invest in mobile homes and parks? The state doesn't matter. Thanks.
Are you interest in being "boots on the ground" or a passive investor?
@S.M. Morton I second @Carl E.'s podcast recommendation. If I recall correctly Kevin Bupp also offers a free 30 min coaching session to anyone who wants to bend his ear. Check out the podcast and maybe you'll be inspired to give him a call. (Or however that works...I haven't done it!)
There are many books on the subject. Depending on your interest (homes or parks), you may want to talk to other investors in your area who are doing what you want to do. When I first started out, I remember wanting to own a park. But the more I got into the business and the more park owners I met, the more I knew I had to first learn the business before I could manage it. This is where focusing on the right things (versus the wrong ones) costs time and money.
Many who start out are drawn in by the glitz and the glamour of big deals (I was one of them!). But the wise and more experienced taught and showed me the value of small deals. What I like about smaller deals are there are less players involved versus larger ones. I've known too many investors get into big deals with others and butt heads (so to speak). It's not fun.
When he was alive, I had a long talk with Lonnie Scruggs about small deals versus large deals. He taught me to place more value on time, not money. Small deals are what allowed him the freedom to do the things he wanted to do, not had to do. Had he been involved in larger deals, he told me he may not have had that amount of freedom. Bigger deals usually just take more time, more money and involve more people. And through experience, I've learned the more people involved the longer it takes to get things done. So, I took his words to heart. And have run my own business in a similar fashion always valuing my time, not just the money.
As a beginner just starting out, I urge you to take a look at your life and examine what is most important to you. Find your why first. The "how-to" will come later. Too many new investors focus too much on the "how-to" without knowing the "why." This is their downfall and the reason why most investors fail. Sure they may do a few deals here or there, but they are mediocre. Those who are truly successful learn their craft and get good at it because their why is strong.
Hope this helps. Best of luck with your new venture! :)
@Kevin Schulte Thanks a lot!!