Hey everyone, I'm just kicking around the idea of possibly investing in mobile homes and was wondering if anyone else has done this sort of thing and the pro's and con's that are involved? Just curious.
The pros are:
1) Very low entry price point (you can buy mobile homes in mobile home parks for as low as $1,000 cash).
2) Huge demand for affordable housing.
3) Often used as the stepping stone to buying mobile home parks as it's a skill needed in both.
The cons are:
1) Working around the SAFE Act and Dodd-Frank laws which make it very hard to do mortgages or "rent to owns".
2) Older mobile homes, in particular, can need a huge amount of cap-x to but them back into service.
3) If you are not extremely disciplined on your background checks, you can let in people who will destroy them.
4) Collections is always hard as you are basically dealing with people who have very little money.
Here's what you should do if you're really interested in this form of investing:
1) Focus on communities that have extremely high single-family home prices ($200,000 and up) and apartment rents.
2) Buy only homes from the 1980s or newer that are at least 14' wide so the floorplan is reasonably spacious.
3) Choose homes that you can buy cheap due to cosmetic -- and not structural -- issues.
4) Watch over your home renovation costs closely and cut every corner -- every dollar you spend is a dollar less profit.
Thanks so much for the info. Very helpful!