After recently attending a real estate investors’ educational weekend, I came away with the strong understanding that many folks are interested in investing in properties outside of their local home radius. The reasons for this may vary, however, typically boiling down to a non-favorable local real estate investing environment in the real estate investor’s home area.
The purpose of this article is to educate you, a mobile home investor, to the realistic possibilities of investing outside of your comfortable driving territory. Below you will find some of the typical weekly and daily activities of an active mobile home investor. We will then discuss how these activities are affected when performed from states away.
Finding Leads From Afar
Some leads you will absolutely be able to find without any boots on the ground. You have access to the same internet that everyone else has who is looking to purchase a used mobile homes in your desired area. Online sites such as Craigslist, Backpage, and Zillow are popular databases to locate current sellers.
The reality: Without employees on the ground or a partner with a vested interest in your deals, you will likely be missing out on many profitable mobile home seller leads. Personal mobile home investing experience has taught me that a majority of closed leads do not come from the internet and are not publicly advertised. Many leads are found before the general public knows the home is for sale. This may be done by being well-known in the area, using consistent marketing, networking, and regularly meeting with new sellers to make offers.
Talking With Sellers Via Phone
Talking with sellers and understanding their situation can absolutely be performed successfully over the telephone. An investor may also be able to build reporter, negotiate, and receive email pictures of the property without ever meeting the seller face-to-face. Some motivated sellers will absolutely be willing to close with a potential buyer (you) without ever meeting you. These sellers will be more concerned with getting paid and less concerned with your wants. In short, introducing yourself, building rapport, making offers, negotiating, looking over pictures and more can all be done successfully over the phone.
Related: 3 Types of Mobile Home Parks That Cause Investors Anxiety, Wasted Time & Lost Profit
The reality: For consistent investing long-term it will be wise to have your business partner or yourself physically present to meet sellers face-to-face and shake hands.
Due Diligence When Purchasing
To this day, I like to see things for myself and kick the tires before buying. The next best thing to my own eyes inspecting a property is having someone I trust or have trained inspect a mobile home properly. This person could be a property inspector, trusted handyman, several different handymen, and/or a partner with a vested interest in the property.
Pro Tip: If you hire someone hourly to perform your due diligence, make sure to verify everything they are looking over for their first few deals. Hourly employees are not nearly as invested in a property as a partner who is splitting profits and expenses with you.
In theory, money can be sent around the globe instantly. Whether you are funding the deal yourself, utilizing the help of a local* credit union, or borrowing the money from uncle Frank’s IRA, this can be done from almost anywhere around the country.
*If working with a local credit union, it certainly may be helpful to be local to the business’s location.
One final walk-through prior to closing is advised with any investment property you are purchasing. This may be outsourced to someone you trust or a professional inspection company for a fee. Additionally, unless you are using a closing attorney, escrow office or title agent, it will be you or your partner’s responsibility to make sure all paperwork is successfully signed and all keys are taken before money is handed to the seller(s).
Pro Tip: If purchasing within a pre-existing mobile home park, remember that many park managers will allow you to start the background approval process via the phone/fax/internet. However, many communities will insist that you or your partner be able to meet and sign a copy of the park’s rules and lease agreement before purchasing a home in the community.
Repairs and Outsourcing
Many investors I speak with have already come to the realization that they will be hiring someone more experienced than themselves to perform manual labor and make the needed repairs on the property. While paying someone to perform repairs is the easy part, finding and managing a quality handyman or contractor who shows up and performs as agreed may prove difficult. Having someone local on the ground to report back to you with pictures daily may be crucial. This person may be the local community manager, a neighbor, a business partner, or the handymen themselves.
Pro Tip: Understand your exit strategy and really know what your buyers want in a used mobile home. Do not make unnecessary improvements that will not bring back their value plus a noticeable profit.
Reselling/Renting the Home and Screening Buyers From Abroad
Your selling game-plan and selling funnel can be created and thought through from the comfort of your own home. You may choose to have sellers call you directly, or you can send them to your selling agent or prerecorded phone message describing the property and qualification details. You may then be able to have the potential tenants or buyers walk through the property with the help of a lockbox on the front door. They may even fill out a credit application online, paid for with their own credit card. In short, the modern age makes it possible to not need to meet your potential tenant or tenant-buyer before the closing date unless desired by you or the tenant.
Pro Tip: Utilizing the help of a property manager and/or online tenant screening service can be extremely valuable to streamlining your renting/selling process. The help of a qualified mortgage loan originator will be equally as important for screening buyers and preparing paperwork when reselling a mobile home with owner financing.
Occasional issues may arise; however, if the mobile home is located in a pre-existing mobile home park, many of these issues may be solved by the current park manager. Having someone local to post notices, knock on doors, inspect possible repairs needed, and drive-by properties can be super valuable to your day-to-day business. Possible sources of help for outsourcing may be local property management companies, experienced real estate agent friends, semi-experienced family members, or a vested real estate investing partner.
There are so many ways to make money in real estate investing, and many of them produce results with correct daily action. When investing in mobile homes outside of your comfortable driving territory, you give up the ability to be on location as much as you may like. Before proceeding forward, make sure you truly understand not only what will be required when things are going good, but more importantly, what actions and responsibilities will be required when things do not go as planned.
Have you purchased mobile homes out of state? Any considerations you’d add to this list?
Let me know with a comment!