Mobile Home Deals in Twin Cities Metro?

Question

Hello BP!

I'm beginning to get my feet wet in mobile home buying and selling in Minneapolis, St. Paul, and the greater metro area.  I'm even open to the Duluth area as well.  Most people aren't into it, but potentially if you're a wholesaler, flipper, etc, some MH leads come your way from time to time and you have no interest in them, well I pay cash for them, and would happily offer a finder's fee on any deal I end up closing.

I can entertain offers where the mobile home is in a park, or on land, and even homes that need to be moved.

Best Regards,

Jesse Lynch

Rebel|Hawk Properties

James Hamling · Answer

Mobile Home investing is this wired "other" universe where the lines between renting, selling, lease optioning and all kinds of terms are blurred. I was speaking with one of the "Godfathers" of the trailer park and he said it best, "your renting dirt, DIRT, if you can't make money renting dirt than what can you".

He also refereed to all his parks as his "herd", because they are "cash cows".

With that there are some foundation rules and laws to making $$ at it, first rule is in line with the 1st rule of all real estate (location, location, location) and it is RURAL, RURAL, RURAL.  Trailer parks are affordable housing, plain n simple, more comparable with renting than home ownership especially in terms of demographics. People don't choose to buy a trailer over a home, it's called getting best bang for the buck, and rural areas that have lower economic opportunities and incomes are the futile ground for these.

The real magic in the mix is how liability is designed with these; the tenant owns the property and in that all maintenance past the dirt. You say "but I thought this was affordable housing, more like rent", aahhh yes young grasshopper, that is why we list them not by price but by averaged payment, and when they make application it is offered that they may buy said property for XYZ and than only need pay the lot rent of 123, OR, the park has "financing available" that will be an "anticipated" monthly payment of XYZ, but after the application there EXACT interest rate can be determined, also factoring what they have for a down on it.

So now your pulling a profit from the lot rent, from the sale of the property, from the financing of the property, AND from park maintenance. Got your attention with "profit from maintenance" didn't I. Well, remember they OWN the property, so when something goes sideways maintenance is needed, and most often they call the office to figure out whats wrong. So if you have a park maintenance person on team why not make some $$$$ to offset costs at minimum right. So the park maintenance staff comes out, checks out where the water is leaking from and says "well, your heat tape burnt out and you have a blown water line, park ownership stops at the meter so its your pipe and not covered by the park, you can call a plumber or fix it yourself, or I can fix it now for XYZ, your call". 95% of the time they hire park maintenance to do it.

A next level profit potential, maintenance insurance, for a monthly fee it covers certain regular inspections and portion of costs for minor repairs. Than there is storage locker rentals. On and on.

The whole name of the game in trailer investing is to keep liability to O or as close to O as humanly possible. When a tenant is evicted we offer to buy there trailer or they have to have it moved or demo'd by the certain date, otherwise stand to forfeit it all together, 99% of the time they sell and the process starts again.

That said, I have a really nice performing park, fully developed and fully occupied, with a history of over 5 years performing as such, ready for sale for a price that places you well in the black day, month& year 1 with a cap rate into the teens if not better as long as you dont do something cataclysmic stupid or bizarre. All management in place, full turn key, in MN. If sincere and legit on buying message me, NO TIRE KICKERS or those "just curious", I activly invest and wholesale I am not a teacher or a BS Guru so please only business communications.

Jesse Lynch · Answer

@David K. My intention is to sell, probably with seller financing.  Landlording in mobile homes doesn't seem ideal to me, and I think a safer bet would be dealing with tenant-buyers.  And I agree, I have not come across anybody investing in the mobile home world within the twin cities, either.

David K. · Answer

Are you selling, or holding for rental? I've thought about them as rentals, because of the low cost of ownership. But I've never found anybody else locally to talk to. I know lot rents are pretty high in the better Twin Cities parks.