Over the past decade investing in mobile homes, I have kicked myself for passing up, delaying, and/or missing opportunities to close easy deals right in front of me. The reasons for these missed opportunities over the years is varied: procrastination, over-analyzing, losing the deal to another buyer, greed, the seller pulling out, cold feet, etc. There were other times I purchased a great deal but over-spent to rehab the home, therefore reducing my profit substantially.
Below is a short list of some of the ways to ruin or spoil a mobile home investment deal. Some of these issues can happen before or after you purchase the property. Be aware of these concerns or risk duplicating the mistakes.
5 Ways To Ruin A Mobile Home Investment Deal
1. Being Too Pushy
Mobile home sellers are regular people who are looking for our help. As investors, it should be our purpose and responsibility to educate sellers and help solve their problems. Throughout the deal making process, it is important to remember to not be pushy towards a seller. Remember, a seller is buying your money with their property, so if they want your money, they will likely follow up with you too.
Example: We can be pushy when negotiating with a seller, or trying to set an appointment, or setting a time to close. Make sure the seller(s) understands how you can help them, but do not be annoying or obnoxious.
2. Being Too Greedy
Mobile home sellers have finely tuned detectors when it comes to manipulation and belittlement. Sellers know if you see them as a friend, a client, a partner, or just a dollar $ign. Being greedy when working with a seller can and likely will push a seller away from working with you. When a seller does not trust you or believe you have their interests at heart, you may often lose the deal.
Mobile homes have a finite price when selling. A 1983 3/2 doublewide is only worth so much money. Yes, there are ways to add profit to your mobile home. Also, yes, the price range will depend on the location; however, there is still a finite price for every mobile home.
Next, we must consider the risk we take as investors. With all that said, it is very important to purchase every mobile home with clear vision of the value you will be creating for yourself.
- Know what your buyers will pay.
- Know when you’ll break even.
- Know what you can sell each home for.
- Know what repairs are needed and not needed.
- Make sure you are happy with your compensation (aim high).
4. Over Repairing
“There is a buyer for every home” is a saying I heard years ago. While I believe this saying is true, I also believe in selling a quality product to a low-risk buyer, tenant-buyer or renter. The level to which you repair each mobile home investment can be based on your particular exit strategy per home.
- If you are aiming to resell for all-cash or a bank financed sale: Repair and bring to the level of other neighborhood homes. Also consider the maximum this home will be appraised for.
- If you are aiming to sell for a payment sale or rental only: Repair what is broken, but do not over improve or upgrade the home.
5. Not Following Up
Too many investors I meet believe that hearing a seller’s “no” in response to their purchase offer(s) is a death sentence for the deal. Due to the lack of qualified buyers and competitors in the market, we mobile home investors have the unique luxury of being able to follow up with mobile home sellers well after they declined our original offer(s). A “no” is sometimes just a temporary objection. Following up is key to being remembered and closing deals with consistency.
It is so important to have a clear plan while investing in any real estate. Mobile homes can be a great opportunity when you understand your market, mobile home buyers, mobile home sellers, and how you fit into this opportunity. There are many great articles on this site about mobile homes and mobile home investing to learn more.
What would you add to my list? What deals have you tanked, and what have you learned from those experiences?
Leave a comment, and let’s discuss!