Mobile Homes - whats a good price?

Question

Hi!

I am new to real estate investing and am interested in the mobile home investment strategy. I have seen a couple that are in  an established MHP where the lot rental is $425-they don't seem to need much fixing up. But they're asking 23 for a 2bed 2 bath and 35 for a 3bed 2 bath. I was hoping to buy cash either sell on or do some kind of owner financing to generate passive income. Where can I go to find out what the comps are for mobile homes in the area? And if someone already does this , can you give me an example of how to make these numbers work?

Thank you in advance.

Ryan Hehman · Answer

To find comparable mobile homes sales try mhvillage.com, craiglist, facebook marketplace and other classified ad-type sites. You will see some mh's on the MLS (so it shows up on Zillow) but these will be the more expensive ones since a lot of agents pass on them.

If the price is too high, still go check out the home, start a relationship with the owner, and make an offer that you think makes sense. They may say no which is fine, and you can follow up in the future or ask if anyone else in the park is considering selling. MH park neighbors are usually tight-knit. Depending on how motivated the seller is, you can also offer to make them payments while you fix and resell.

$425 lot rent is very low (may not stay that way for long) and you could sell on payments to make good cash flow. Look for comparable apartment rentals to see how much you might be able to charge per month.

Before making an offer, though, make sure to talk to the park manager while you're in the park and talk to them about what you intend to do. It's not advisable and usually not possible to buy and resell a home in a park without cooperating with the PM at some level.

Good luck! Feel free to PM me if you have any other questions.

Hai Loc · Answer

I own a park and I had investors buy my mobile homes in my park. They paid cash fixed them up and got tenants. They rent them out for $800 and pay me $350 lot rent so they net $450 a month.. This is a pure cash flow investment. The value of the mobile home will never increase unless you fix much better the way it already is so always keep that in mind. You will also need to catch up with increasing your rent when your lot rent increases..

I personally will never do this because I do not own the land. This is a perfect example of a leasehold investment which doesn't have much hope to appreciate.