I’m a newbie looking to invest in mobile homes and have been gathering some advice from more experienced investors. I think it might be helpful to any Texas residents who are considering this area of investing. Let me know what you think and if you have other advice:
It is almost impossible to get financing on used homes. Cash is king.
Repos can only be bought through dealers/brokers.
Individuals can only sell ONE mobile home per year in TX or you have to be licensed.
You can obtain a license by applying and attending a 2.5 day course in Austin. The next courses are scheduled for :
May 16 - 18
July 11 - 12
The cost is $247.
www.tdhca.state.tx.us/mh/index.htm for more info.
Replacement parts for mobile homes are unique and can only be obtained through specialized dealers such as Redmonds.
One acre can generally have 8 - 10 homes; though some places have further restrictions on lot sizes and utilities.
Some cities do not allow replacing older homes with newer ones - for example, San Leon in Galveston county, check the local municipal codes. Some cities (Baytown) only allow 4 mobile homes per lot, starting with the 5th you have to obtain an annual Mobile Home Park license. You can find many city zoning and ordinances at: http://www.municode.com/
When trying to value an existing park look at the base lot rate, not the rate plus the homes. The homes are counted as real property, but mostly likely taxed as regular property. Cap rate should be based on avg paying # of lots, not any additional home rent.
Lonnie Scruggs wrote the book on MH investing and you can get the book from his website or Amazon Kindle. Prices are outdated but you can adjust for your area.
I am now actively searching for property to place homes on that I am buying. The goal is to create several small MHPs and do owner finance on the homes. If anyone has details on how to set up these notes for payment into an IRA, please post it!