Most of us know that mobile homes hold a certain negative stigma in our society. In past articles I have addressed this concern and its impact on the mobile home industry as a whole. The obvious debate is that mobile homes are cheap, ugly, worthless, headaches — which couldn’t be further from the real truth.
Much like the mobile homes themselves, investors who identify themselves as mobile home investors can be subject to ridicule or other criticism. When I began investing in real estate, I was literally laughed at by a handful of young and well-known local wholesaler investors at the time. If this has happened to you, then let’s have the last laugh all the way to the bank.
4 False Stereotypes About Mobile Home Investors, Debunked
1. You Are a Slumlord
Reality: Many mobile home investors mainly deal in quality buyers and clean mobile homes.
This is a personal pet-peeve of mine. Ignorant investors, family, and friends can and will laugh at the idea of buying and reselling mobile homes for profit. The truth is, many mobile homes are drop dead gorgeous inside and out. In contrast there are other mobile homes that would make you sick to your stomach if you went inside them.
The owner of a mobile home makes or breaks the condition of the property. The more pride the owner takes in the home, the more well kept the home may remain. As investors, we often believe in the path of least resistance. For your first few deals, make sure you are purchasing attractive mobile homes at attractive prices. Selling good quality homes to good quality buyers is key to avoiding slum-type problems.
2. You Make Repairs All the Time
Reality: Repairs are minimal depending how you buy and resell.
If you have never had the pleasure of rehabbing a mobile home, you are in for a treat. Most mobile homes are only a few layers thick; what you see is typically what you get concerning mobile home construction and repairs.
If you are unsure of making repairs, I encourage you to hire a qualified handyman or contractor to make needed repairs prior to reselling. Bring the home to a rent ready condition as soon as possible. This rent ready condition will allow you to attract most local buyers looking for a quality mobile home to own. Consider selling the home for an all-cash price or a payment plan type sale. If you sell the home with monthly payments, many repairs are typically performed by the owner-occupants, making your life much easier as you are typically hands-off for repairs moving forward after sale.
3. Your Profits Are Skinny
Reality: Mobile homes are cash cows.
To be fair, this misconception is very plausible. While investing in mobile homes, it is very easy to accidentally:
- Overpay for a mobile home.
- Overspend/improve an investment mobile home.
- Leave money on the table when you resell.
Therefore, if you succeed at any of the 3 bullets above, then it will likely result in selling the home for little or less profit than you would otherwise. As investors we take risks, and those risks should be accounted for in your profit. Mobile homes purchased correctly can be sold for many times their purchase price. Aim to triple your money at minimum.
4. You Deal With Only Broke Buyers/Tenants
Reality: You work with whomever you approve for your properties.
Some tenants and tenant-buyers are very high-risk with little income, poor credit, and a negative rental history. On the other end of the spectrum, there are perfect tenants and tenants-buyers waiting to move into your quality mobile home for sale if sold correctly. Always make sure to prescreen all your potential tenants and tenant-buyers before putting anyone in any of your properties. While many mobile home buyers are blue collar workers there are a good portion of buyers with good income, good jobs, good savings, good personality, and a good rental history.
In conclusion only you know how much passion and desire you have within yourself for real estate investing. If you know your unmovable goal is to help others, own more real estate, and make a serious profit than investing in mobile homes may be something to consider with pride.
Mobile home investors: Have you run into any of these stereotypes before? And if you haven’t invested in mobile homes, would you consider it — and what questions do you have about this niche of real estate?
Leave me a comment below, and let’s talk!