I’m about to buy my 5th mobile home, all in the same park. I’m trying to decide if they are really worth the work.
They are all in the same park, a mostly Hispanic one. They rent fast there and I have few problems with the tenants. The owner of the park calls me when he has one in some from of distress. I usually get them for under 500 bucks. Usually spend between 1000-2500 fixing them up. Then rent them from 500-650 depending on the condition and size. Lot rent is 290 a month.
I’ve got lots of thing going on, real estate wise. Wondering if i’m wasting my time and money messing with these things? I’ve bought all of these in the past year, so I don’t really have enough seasoning on the cashflow to trust my numbers yet, although they are good.
What about doing a Lonnie deal so you can relieve yourself of maintenance issues, but still make money off the deal? Even if you sold for $6-8K and charged a pretty decent interest rate, you should still make good money with it.
I have 4 that are mortgage notes paying me, with nothing owed. Recently was at a seminar where the speaker called them “Little ATM’s that spit out cash”. Is very fitting. Am working on one that is being rehabbed now. Paint, new carpet, hardwood floor for kitchen and dining room. Approximately $225 for laminate floor, another $350 for Berber carpet in 2 bedrooms and free carpet for LR, including installation. Paint $250 (Heavy smoker, needed lots o Killz!!). Odds and ends (kitchen hardware, new faucets, toilets, etc…) another $250-300. And approximately $300 for ceramic tile in both baths. $1400-1500 for fixup. $1000 original price. Lot rent $475 x 1.5 months.
$2700- $3300 investment?
Sale price typical— $14,500–$22,500
You tell me worth it?
and btw, we are financing our notes at 10%. If they default, We get unit back, and already paid what we have in.
I would say keep doing it. Your returns are huge. 20 of those boogers makes you $120k /yr in gross income or so based on your current strategy. I would NOT sell them — I would just rent them out if you can handle the maintenance. Lonnie Scruggs is a genius, but he also wrote his books for burnt out landlords…which he was upon getting old. He made his first and biggest fortune as a buy & hold landlord in the 20-30 years prior to him beginning to do mobile home notes.
I’ve tried to do a lonnie deal before with these, they just sat there with a for sale sign in the yard for months. Changed the sign to for rent and the phone rings. I think most tenants think in terms of month to month, and coming up with the downpayment I would want, plus lot rent plus depost for lot rent really starts to add up for a cheapo mobile home. Most people I deal with just need a cheap place to crash and have no interest in purchasing the home.
The cashflow is OK on them, but I can buy houses for 30K with a mortgage payment of around 300 bucks, seems like it might be better $$ spent than paying that lot rent every month. Sure wish the owner would sell me that park, that would solve my dilema!!
I’ve already found a buyer for that one. State Farm. They are going to pay a little bit more than 500 bucks. Maybe my tenants will just keep burning them down and I won’t have to make a decision here?
Sounds good to me! Mobile home investing is a great business and a great niche and can be very rewarding if you like it. Though, I know people who have done a mobile home deal or 2 and have not liked it. It’s not for everyone. It all depends.