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Updated about 11 years ago on . Most recent reply

Trying to get started, could use guidance :) Is this a good deal?
Okay so I am seriously interested in getting my feet wet in real estate investing. It seems like MHI is the way to go because of the low cost of entry and if things go bad, you're not out more than a few thousand and if done properly, a great way to generate a couple hundred bucks a month and get the process rolling.
I've been reading and studying everything I can for free. I am interested in buying, rehabing (if it needs it), then selling it via seller-financing.
The main questions I have are as follows:
Here is the listing: http://appleton.craigslist.org/reo/4305444560.html
1) SAFE Act & Frank-Dodd laws. I have done research but it's not clear. I CAN buy and re-sell this house via seller-financing but I need to make sure and use a MLO, perform proper credit checks and make sure they can properly afford the property, and I am not allowed to use a balloon system. Is this correct?
2) This mobile home is listed at $4,000. I am sure they'll go lower. How do I tell what to pay for this and what should I offer them? I was thinking ideally I would pay $2000 for it, not a penny more.
3) Lot rent is $285, seems reasonable. It's not a ******** area of town so it seemed like a good start.
4) Is this home too old? According to the listing they have done repairs and it's not a run-down ********.
5) Lets say they take $2,000 and you guys agree it seems like a good deal at $2,000..... and lets pretend I have to put $1,500 into it so I have $3,500 invested. How much realistically could I sell this for and how much would I charge for down payment and how long of a structure/interest rates/payments and is it legal to do seller financing or ?
Sorry for all the questions... just really need clarification. I am having trouble figuring out what is a good deal and what is not... how much to pay, how much its worth, etc.... and also if I can do seller financing on this.
Thanks in advance, I really appreciate everyones time.
Most Popular Reply

Mobile Home investing is one of the best low cost entry level deals around. You need to search and read everything by John Fedro on this site and his site. Personally I'm not a fan of rentals in this segment; the repairs and turnaround can be very costly. The model many, including myself follow is to buy low and owner finance out.
Dodd-Frank only applies if you originate more than five mortgages in a rolling year but if you use a MLO for the first one, then you have to use them for all. The rules are still being written but just doing one or two right now and you should be fine. Once you start to scale up, you will want a good attorney on your team to review your documents.
Be sure to check your state regulations on how many mobile homes you're allowed to sell in a year as well. In Texas, if you sell more than three you need to have a dealer's license and the fines are really stiff if you don't.
The home you linked to looks like a good deal but keep in mind that it can probably never be moved out of the park because it is a 1973. Homes older than 1976 do not have HUD labels and many parks and cities have restrictions on the age of homes they allow to be moved in. That is perfectly fine as long as you're comfortable with the park history and management. I know one investor who has owner-financed over 300 homes and all of them were in parks. He takes $2k down and owner finances the rest so that the lot rent and his payment are lower than the median 2bdr apt in the area. He has also become very good at identifying good buyers and well managed parks.
Good luck!