3 Common mistakes investing in Mobile Homes within a MHP

[Adrian Smude]

This niche of investing in mobile homes with lot rent can get a bad stereotype because people often make preventable mistakes. If you haven’t read my previous posts I encourage you to read those to get the full picture.

Common mistake #1 is not talking with the park manager. The park manager makes all the rules! If they are not supportive of your plan and easy to work with you will have an uphill battle and you increase your odds of losing money! The park manager is the one who approves your resident or buyer. They can’t move in without the approval so you need to know their process and requirements. I’ve had a park manager tell me they discriminate which breaks fair housing, do you think it’s a good idea to be involved with this type of illegal activity?

There’s so much more on this topic we will cover later.

Common mistake #2 buying in an age-restricted neighborhood without checking the year-round average rent. Some of these communities are filled with snowbirds. If you’re not familiar with snowbirds they are retirees that migrate South in the winter and North in the summers. Basically, the demand is high from the Boogyman to the Easter Bunny (October-April). If you only look at these rents you won’t have accurate numbers for the lower demand or no demand in the summer.

Common mistake #3 Not doing a proper title search. Mobile homes without land are a vehicle. In most states, these are governed by the DMV which means your closing attorney or title company may not handle these transactions or know how to transfer the mobile home properly. I’ve seen people purchase without realizing there can be a lien on the title that is not printed on the title. I’ve also seen title companies do this transfer incorrectly which didn’t actually transfer the mobile home. I’ve also seen sellers give a title to a mobile home that is different from the one they thought they were buying.