Mobile Home Investing with Creative Strategies

5

So you have decided to add more long term, passive cash flowing properties to your portfolio for 2010. Your desire is to leave the rat race once and for all. Your plan is to buy and hold some properties with low or no debt and a high monthly cash flow.

Time to Get Creative!

You just finished your meeting with seller “June” and start reviewing all the facts as you drive away. The mobile home is a 2002 double wide, attached to a third of an acre of land in a good part of town. The yard is fenced, all appliances including central air conditional are included and in great working condition. The home is clean and besides a faint dog odor in the air and slight wear in the kitchen tile, the home is in near perfect condition.

You learn that June paid $50,000 cash for the home and land 4 years ago. This amount was her complete life saving and since then June has refinanced the home with a local lender in town. June’s monthly debt service was only $288.10; yet is now behind $2,400 on her mortgage to the self servicing lending company. She currently owes $24,700 of a total refinanced amount of $25,000.

Her goal is to avoid a foreclosure and not be thrown out on the street, something she says the lender is threatening to do. She states she would like to relocate to a nearby county if possible, but she is also very worried about moving somewhere and not being able to pay for monthly rent and moving expenses. Government aid and her son are the only sources of income she has to rely on.

Now, you are not the first investor to meet with June and look at her property. However, you are the first investor to really sit down and listen to her problems and desires. You are also the only investor so far that actually sees a plan to solve both her goals and your own.

June is not opposed to relocating to a mobile home located in a clean family park in the county she desires. You agree to purchase her mobile home and land subject to the existing mortgage. In addition to this loan amount ($24,700) you will bring current all past due amounts. You will also find June an acceptable free and clear mobile home to relocate her and her son to. June agrees to all terms if you can find her an adequate home, she says she’s not too picky.

Making the Solution Happen

You already invest in mobile homes in parks so you know of a mobile home park with low monthly lot rent in the county June desires. Not only do you know of a nice clean family park with low lot rent, you are just about to get back a nice and clean, free and clear 2 bed/2 bathroom mobile home from a tenant-buyer that has been making you payments for the last 2 years. Needless to say you have made all your money back plus many thousands in profit already from the target mobile home.

The story above is exactly how I bought a great mobile home attached to a third acre of land using no money out of pocket. The mobile home started cash flowing on day one. The names in the following story have been changed to protect the innocent, but the all the numbers are real and totally awesome.

Once my previous tenant-buyers had moved out of the target 2/2 mobile home, I ran a quick carpet cleaner through the home and deeded it to June. June is very happy with her new home and neighbors — I also agreed to rent a u-haul and help her move, which I did.

After contacting June’s lender, they agreed to add a hundred dollars to the monthly payment of $288.10 until the defaulted balance is brought current.

Within the same month I quickly sold June’s previous home to a great tenant-buyer on payments for the next 360 months with $5,000 down at signing. Now that sounds like a retirement plan to me.

The moral to the story is to look beyond price. Many other investors had tried to help June with no success. The solution seemed so easy at the time. Be friendly and talk out all possible solutions with your sellers.  Remember, “Use what you have to get what you want.”

– J. Fed

About Author

John Fedro

John Fedro has been investing in manufactured housing since 2002. John now spends his time continuing to build his cash-flow business in multiple states while helping others enjoy the same freedom he has achieved. Find John here.

5 Comments

  1. Cool post John! I’m really getting interested in Mobile/Manufactured homes the more I read your posts.

  2. I’m very interested in investing in mobile homes. Im having trouble finding good opportunities and the right resources. Can someone give me some good resources I can use? Websites, people, etc…Much appreciated!

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