Mobile Home Investing: Clearing up the Misconceptions

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Whether you call it a mobile home, wobbly box, tin can, trailer, or simply manufactured home, factory built homes offer convenience, affordability and even luxury to many Americans.  As I talk to more and more seasoned real estate investors at my local REIA meetings, I realize just how truly secretive mobile home investing has become.  Like many investors you may not be aware that mobile homes, as a source of prosperity, are available to you for residual everyday profit.

This niche has been kept quiet for too long. Let us look deeper into a few of the biggest misconceptions about mobile homes and the mobile home investing business today.

“I thought demand has gone down for mobile homes?” Between 2001 and 2007 mobile home construction averaged 300,000 new homes built each year.  This number doesn’t take into account the hundreds of thousands of buyers every year that make up the mobile home re-sales market around the country.

“Isn’t property insurance through the roof?” Property insurance for mobile homes is typically priced by the cost to purchase a new mobile home if the one being insured is destroyed.  Mobile homes typically cost less their site built counterpart, and therefore insurance rates are usually substantially cheaper than premiums for block or frame homes.  Factors such as crime, flooding, etc, are uncontrollable factors to determining insurance premiums.

“Aren’t mobile homes always moving locations?” In fact only %5 of all double-wide (+20’ Wide) mobile homes will ever move locations.  All mobile homes must be safely secured to a solid base and attached to the Earth in a process known as “setting” the mobile home.  Stricter laws passed in 1976 and 2006 make this “setting” process safer and more secure today than ever.

“You can’t make as much money with mobile homes compared to traditional housing.” Price is relative.  A mobile home will typically sell for a fraction of the cost of a comparable site built home.  As investors we capitalize on this and buy them for tens of thousands less dollars than we would investing in a block home.  Ensuring a hefty profit can be made on any property boils down to whether or not it can be purchased by you at a low enough price and/or favorable terms.  Do your diligence before investing in any property.

When did it become a bad thing to invest in affordable housing? With a few tweaks to your investing paperwork, proper education and determination, anyone can become a success in the buy, hold and selling world of mobile home investing.

– 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.

7 Comments

  1. Well put John. I have always loved the idea of owning a mobile home park, but my husband doesn’t have the same vision as I do. I’ve seen many well established parks sell for a pretty penny. Not only are you able lease the lots, but you also have the capability to lease out your own mobile homes as rentals. I am definitely going to have my husband read your article.

    Visit Liz Voss’s last blog at San Antonio Homes.

    • John Fedro

      Liz,

      I couldn’t agree with you more. There are are many parks that you can pick up undervalued, not utilizing their full potential and fairly inexpensive with some level of owner financing. Even though many parks may not be living up to their full potential they still produce cash flow just the ways you stated above. KEEP THE DREAM ALIVE! I would think that owning a mobile home community would be a feather in the hat of any real estate investor looking to make cash flow and expand their experience. Plus you’d always have great/funny stories to tell!

      John

  2. It is as you say, sort of a secret market. It does take a certain skill set to know what your doing however. Here in my town, Yucaipa, Ca. We have no fewer than 47 mobile home parks. Mostly senior. The big problem is that all Senior Parks are under a rent control ordinance. Something to watch out for if your going to buy and hold as rentals. Nice job! Great Post.
    .-= Dwight (Matt) Mathews´s last blog ..The Next Great Recession 2011-2012?? =-.

  3. Robert Minnella on

    John,

    Excellent article. Here in North Central Florida, where property can be purchased cheaply and within 30 minute driving distances to larger cities, used manufactured housing can add unbelievable value to a piece of property in both rents and purchases. The properties and the manufactured homes just have to be cleaned up and presentable.

    Rob

  4. Hi Rob,

    Right on. Some of my best investing areas are right outside of major cities. Lot rent and home prices both drop way down while seller motivation typically increases. Thanks for the comment.

    Best,
    John Fedro

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