I am moving to Charleston in about 1.5 months. The mobile home market intrigues me.
Would it be wise to look at renovating them in this area?
Would it be better to buy-and-hold?
Is it possible to buy-and-hold with low cash?
What websites/resources should I look at to find listings?
Is this a good 'niche' market for Charleston and would it have a good ROI?
Thank you for all your consideration and help!
I can't help you with the Charleston market, but if you have low cash, I think MHs are an excellent way to go.
To me, they have a lot of advantages: Small amount of money to buy one, with high cash flow. Easier to find, maybe, with less competition for them. Cost of repair materials lower.
Then there are disadvantages: possibly lower quality tenants, lower quality homes.
I'm about to take the plunge into renting them. I would prefer the old way of owner financing them to a buyer, but with new regulations, that's not really doable anymore, from what I've read here and elsewhere.
Please keep us posted on your progress!!
You have some guts! I have just heard nightmare stories of the mobile home market unless you are buying whole trailer courts.
You hear nightmare stories about many types of investing. I'm constantly hearing nightmare stories of any type of rental investments. However, some people are successful and prudent and make a lot of money. Yes, it's hard work, but most things that are worthwhile are.
Mobile home investing in Texas is in full swing because you can buy mobile homes very cheap.
I forgot another advantage of MH investing: extremely low risk. If your investment doesn't work out you've lost a few thousand (that is, if you're buying homes that cost a few thousand) rather than tens of thousands.
First off let me say good for you for aiming to get educated about mobile home investments prior to moving and jumping into the market. @Leslie A. gives some great advise about mobile homes and I enjoyed her comments with regards to people having their negative opinions about the industry. If you are going to pursue any form of investing you can always lose money or become defeated if you go in blindly and take uncalculated risks. I hope this last part makes sense.
With all that said let me take the time to answer some of your questions. The answers I have for you come not as a guess but from experience working with MH investors already in SC. I have tried to segment the questions and answers below for easy reading.
1. Would it be wise to look at renovating them in this area? When renovating you may wish to fix what is wrong with the home but not to upgrade the home. Every dime you put into the MH will take time to get this money back before any profit is made.
2. Would it be better to buy-and-hold? Good question. In NC and SC we are seeing more end-users having cash-money to purchase homes from you for all-cash, versus some sort of payment plan arrangement. I say "more end-users" in the last sentence because in most areas of the country most MH buyers have less cash to purchase our MHs outright.
3. Is it possible to buy-and-hold with low cash? Yes, however you must only purchase homes you know you can sell quickly and for a profit. This takes planning and casting a wide net to make sure you know what is for sale and what your buyers will pay.
4. What websites/resources should I look at to find listings? There is an old saying that goes, if the home is on a list the deal doesn't exist. Whether you believe this or not finding sellers before their homes gets online is best for you. With that said simple sites like Craigslist are a good place to start.
5. Is this a good 'niche' market for Charleston and would it have a good ROI? If you advertise, purchase, and resell right then Yes. If you advertise, purchase, and resell for too little then your profit will be skinny and you will burn-out or lose money very quickly. I know this is a vague answer but it really does depend on you and the deals you close. Is there a good potential in SC... absolutely. It is the #1 state for the most mobile homes per capita.
The above comments go for mobile homes in parks and attached to private land as well. Make sure you know exactly what you are doing and you will be profitable. Sites like this one really help you get a clearer picture of what is to come.
All the best and I hope this helps.
Ryan - I think you can find some good deals in mobile homes in this market. Yes you can buy and hold and make good cash flow. I have researched mobile homes extensively over the last year but ultimately the thing that pushed me away was the types of tenants and the constant smell of cat urine.
I have ready about 5 books and used a few websites but the best deals were found on craigslist. I had a few homes in the $1,500 range that would sell for around $7,000 and some deals that go for $8,000 and sell for $13-15K. It just depends on what you are looking to do.
For starters, I'd recommend going to www.mhvillage.com and look at some of the Charleston area parks.
Then I would read Adventures in Mobile Homes by Rachel Hernandez. Third, put some adds on Craigslist that you are looking to buy with cash and go visit some homes when you get into town. If after all this you are still interested then I recommend you go for it.
thanks for all your answers back everyone! This is all valuable information!
So from the gist of it, it seems lower quality tenants, lower quality property. I have low starting cash, so is this one of the only reasons I would pursue this MH market?
I'm asking myself is it worth it? What would compel me to look into MH real estate? What other RE would be good for Charleston? I am trying to formulate my criteria for investment property. Thanks again everyone!
Hey I'm brand new as well and it's good to see someone else as newbie as me searching about mobile homes. I have never liked mobile homes and never even looked them until I found BiggerPockets. Many of the top people here have some sort of investments in this area and that just gave me the confidence to consider.
Then I found @John Fedro website and researched some stories, and that has given me more substance.
But in my early research I have learned that in MH you should never do buy and hold, and I'm a guy who loves buy and hold way more then flipping. But in MH, you want to look into selling for first profitable cash offer or doing owner financing.
Think of mobile homes as selling used cars, you wanna sell them quick and move to the next one.
There are people who buy and hold and swear by renting them. Not many on here, though. Tony Collela and Zalman Velvel both have books that go into a lot of detail on using them for rentals.
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