This article is created to help investors who have little experience with mobile home investments. Mobile home are located in almost every city around the nation. If you have not seriously looked into this form of investing you may wish to dig a little deeper.
Let me first say that the opinions and advice made in the article are based on a decade plus of my own personal investing, in addition to dozens and dozens of additional deals worked and closed by other mobile home specific investors over the past few years. I mention all this to you because you are the final authority on determining what makes most financial sense to you and your specific goals.
With that said, allow me to impress upon you what I have learned so that you may avoid many of the same errors made over the years. The below list is a short outline of important criteria you may aim to meet on your first few deals.
How to Purchase Real Estate With No (or Low) Money!
One of the biggest struggles that many new investors have is in coming up with the money to purchase their first real estate properties. Well, BiggerPockets can help with that too. The Book on Investing in Real Estate with No (and Low) Money Down can give you the tools you need to get started in real estate, even if you don’t have tons of cash lying around.
The Right Home?
Making sure you purchase the “right home” comes down to many factors.
The home itself should be attractive and easy to resell when presented to a majority of potential buyers. But what do buyers want? The physical condition, size, age, and much more about the home should be given consideration when making purchase offers to any seller. We discuss this in some detail in a recent article titled, Which Mobile Homes Are Best For Investing, Reselling, and Profiting.
The Right Park?
Let’s face it, if you purchase a mobile home in a park you will have to abide by the parks rules, regulations, management, residents, traffic, and more.
Many of these factors matter when reselling while other issues will not present you with any hurdles. Learn which parks are best for investing inside of with a past lesson titled, Mobile Home Investing With The Path of Least Resistance: The Mobile Home Community.
Almost every mobile home “deal” you come across will have a seller.
It is my opinion that the way you treat a seller should be the same way you treat a good friend. Aim to help, educate, inform, clarify, and of course make purchase offers to every seller who wants your help.
With that said some sellers will want/need your help while other sellers will not want your help. Understand more about each group of seller and who to focus your attention on in a past post titled, The Three Types Of Mobile Home Sellers (inside Parks).
The Right Price?
So many mistakes can be made while running your “purchase and desired resale numbers” prior to making your purchase offers. Many traditional home investors turned newbie mobile home investor have been burned by:
- Over paying.
- Over improving.
- Underestimating and overestimating a variety of numbers due to unfamiliarity with this niche.
- Under reselling.
When reselling any investment property you must first truly understand your local market’s mobile home supply and demand.
- Know what buyers are paying?
- Know where they are buying?
- Know what they are looking for?
- Know how they are needing to buying?
- Know what marketing material your local buyers are looking through to find local mobile homes for sale?
Once you understand the above information aim to purchase every investment mobile home for a price or terms that recoups all your invested money within 12 months, including closing, holding, and repairs.
Let’s Get Real: You can always over-pay for a mobile home for sale. Many mobile homes and sellers will not fit the criteria above, that is perfectly acceptable. Without any skill you can go out tomorrow and purchase a mobile home you negotiate down 50% and falsely think is a really great buy. You will be doing your business a disservice if this mobile home does not make you your invested money back in 12 months or less (ideally much less).
Set your investing bar high and you may be surprised at your results.
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