Without getting into money details, does anyone have any opinions on buying mobile homes to fix up and sell?
I’ve done a couple of them and made good money, the problem is getting the buyers financed.
Most of the folks who wanted to buy the two I rehabbed were very nice people. However…they couldn’t get a 3 day old donut financed.
It took almost 6 months to sell each unit. (I bought them a different times & paid cash for both so holding costs were low)
You can get them cheap but MAKE SURE you check the floors under the water heaters and bathrooms. Almost all of the one’s I’ve seen were rotted right through. The heaters start to leak and because the floors are particle board it just soaks it up and it drips under the trailer. It can go on for years before it’s noticed.
Oh, another tip…NEVER put TILE in a mobile home. I had just started the rehab when a neighbor came over and wanted my opinion on his newly installed and cracked to sh!t tile flooring. TRAILERS MOVE, even if they’re tied to a pad and have not turned a wheel in 20 years THEY FLEX. TILE NO LIKEY FLEXING!! Use VINYL. I did put some pre-finished hardwoods in mine to spice it up and they seemed fine. ( Those wood floors actually sold both units, only ones in the park with 'em) Ole Jed’s a millionaire!!!
I made money on both of them, and would probably tackle another one if I could steal it.
Cracked to sh!t tile flooring… LMAO
Don’t know your market, but here in NC i’m pretty happy. I just bought one for 300 dollars. It has the flooring problems like FDJAKE described, this one from a hot water heater leak. The last one I did I ripped up the particle board and put down 3/4 inch ply. But that was a ton of work!! I’m contimplating just spraying some bleach down first to make sure the mold is out, and go over the rotted stuff with plywood. Yeah I know, but you can never forget, it’s just a mobile home and time is money. This one should rent for 600 a month, lot rent is 290, so do the math on my return! I’m guessing around 2K tops to get this back in shape, as it needs carpet too.
So why have I heard so often to stay away from investing in mobile homes?
Yes. So have I
Check out this guy’s books, I’ve heard they are #1 for mobile homes: http://shop.lonniescruggs.net/category.sc?categoryId=2
The I think if I recall reading his articles he pays cash for the ones he buys and owner finances them. Financing the deals makes all of those financing headaches go away that Pete mentioned. As we all know there are 2 major issues with financing them: First is that most people that want them couldn’t get approved, second is that almost no lenders are still doing mobiles. Of course if you have no cash to put into it this isn’t a workable plan. And because they are so hard to sell due to the financing problems you can pick them up cheap if you have the cash to do it.
I have heard that too. In short you can make money with mobile homes. The people that say don’t do mobile homes don’t know how to make money with mobile homes. A person that tried to do a thing and failed is not qualified to give advice on that thing. Since these people have tried and failed they are unqualified to give that advice. What you need to do is find a person that is making money on mobile homes and follow their lead.
Back to my philosophy that you can’t learn from another’s mistakes, but you learn from their successes. Just like you wouldn’t ask a person that has been divorced 4 times how to pick a spouse for life, you should ask people how it is done right. I don’t want somebody telling me war stories about how it can be messed up. If they can’t tell you chapter and verse about how to do it, listen politely or not but DON’T believe anything they tell you.
I just rent mine, I might sell them on payment plans like lonnie does when I get sick of landlording, but for now it’s good experience, and for tax purposes, it makes the most sense as well. After renting for about 5 years, they have more than paid for themselves, and then I can sell them at a loss. The hard part for me was finding a park that allows rentals and didn’t mind someone else making a buck or two. I didn’t expect this, but most of the parks around here would rather a lot sit empty than somebody bringing in a 10 year old home and sublease the lot. Moving the homes are expensive, but i’ve found I can find much much better deals out in the boonies here, than near the city. Then I move them close to the city where they rent fast. I have a qualified tenant with a deposit down on one that I moved the day before thanksgiving and it doesn’t have the carpet down yet and is still torn up. He can’t wait to move in! I price mine at what an apartment rents for nearby, so my pitch is you get a SFH at an apartment price.
It is my understanding that Mr. Lonnie Scruggs is the “mobile home guru”…if there is such a thing.
I think Lonnie’s book is excellent and you certainly can make money with mobile homes. However, just remember that nothing is as easy as it sounds. If you are selling your mobile home with owner financing, what happens when the buyer stops paying? How long will it take to get your property back? Who is responsible for the lot rent while you are trying to get the mobile home back? (hint: look in the mirror) How much damage can an angry tenant do to a mobile home? When the damage is more than the mobile home is worth, what do you do with the home? How much does it cost to move the home? etc, etc, etc.
Mike
…and, to follow on with what Mike is saying, in many states, mobiles are not considered RE, they are personal property and titled like a car…taking them back may be different than taking back a house.
Keith
Any deal of any type should be penciled out, and if it works, it works.
The reasons beginners are warned away from mobile homes:
They depreciate like a car. They don’t go up in value like real estate.
They are more delicate than a house and easier to damage. They show more wear and tear.
In some sites it is much more difficult to get decent tenants for a mobil than for an apartment. Tenants can really be bottom of the barrel.
If the mobile is in a park, the park mnagement can make it very difficult to rent the mobile out.
I’ve got some old mobiles on nice land. The ones in the country bring top dollar rent and get great tenants. The ones in the city are very difficult. City tenants turn up their noses and annouce they are too good to live in a mobile home— and these are the guys who can only afford a meth laced welfare filled trashy apartment. They’d rather live there than in a nice upgraded well-maintained mobile on a quarter acre.
If you are going to buy mobiles, know your market and use a sharp pencil.
In my area mobiles are scarce and you would be hard pressed to try and rent one out. Even if you got the mobile free the lot rent would be enough to push you into negative cashflow in my area. You definitely need to be wary of all of the dynamics of the deal before proceeding.
Have been looking at getting into MHs in the Dallas FW region, just glancing through Craigs List to see what was out there. Many times I have seen decent looking, less than 10 year old, 3bd/2b for 20k and under. Have also seen several nice looking lots and larger properties for less than 10k, some right next to or near a lake, within an hour drive of DFW. I just saw one advertised for $20k with one acre about 30 miles south of DFW. I am looking at getting into one of these as compared to a condo in the 40k to 50k range. Have noticed that a majority of people do not do much outside the MH, like long, covered decks, carports, landscaping. Does this mean that there is very little value in doing so, or that they just don’t have the funds/credit or inclination. I would think that this market has great potential, especially with the more you can do to make the MH look more like a conventional home.
Look what I found! Its the deals on wheels PDF version. It’s amazing what you can find in advanced google
bump
JP, I admire you people who can do searches like that!!! What were your search words, if you don’t mind sharing…there are a few more books I’d like to read and further evaluate without making a trip to the library or storing them in my house.