DO MOBILE HOMES MAKE SENSE?

Question

Alright guys so I'm a newbie, don't have to much cash just about 20k. So I'm considering buying a mobile home for about 15k and renting it out for cash flow. Don't find to much info on this. Most strategies on mobile homes are buy and flip, not buy and hold. Does anyone out there rent out mobile homes? Does it cash flow nice? Can it work? Thanks for the input guys.

Jose Alonso.

Howard Abell · Answer

I do not believe that Mobile Homes or mobile home parks are a dying niche. It might be on a long term respirator but the opportunities that exist warrant a good look at the asset class. This is simply supply and demand out of a text book. The Feds suggest that anyone earning less than 30-35K a year should not be spending more that 5-600 a month for rent. In most locales that would buy you a one bedroom brick and mortar apartment.  A mobile home can rent for 500-600 a month for a detached 3 bedroom 2 bath home in decent condition. So, you can not build new parks for economic and political reasons, yet anyone reading the economic conditions at present realizes that there are millions of people stuck at the lower end of the economy. No new homes for a reasonable rent and a good supply of people in need is a recipe for a successful business. Also, show me a multi-family investment with out problem tenants at every level. Not many of those exist.

Orlando Paz · Answer

I wish I had $20k to invest in mobile homes! Notice I said... "Homes". With $20k you can purchase up to 8 mobile homes at $2,500 each (they do exist). Then turn around and sell each one for double or more. You have the options to make a direct sale, rent the home, owner finance, or rent to own. On the last two strategies, make sure you read up about the new Dodd Frank rules. If you owner finance, you can also profit through the interest you charge. I recommend you reach out to John Fedro on this site. He is a great resource. I also recommend you look for a book called "Deals on Wheels" by Lonnie Scruggs.

Carlos Rovira · Answer

@Jose Alonso

I am an active investor in Miami, FL. I have considered MHP investing extensively and always run into the problem that there is no supply in Miami. I believe them to be a great investment and would be willing to partner on a deal where we purchase a full park. I have seen some in Okeechobee County (by the Lake) that are decently priced. It is a 2 hour drive, but I don't believe that is a huge problem.

The best way to profit from MHPs is to purchase the park with the homes, sell the homes to the tenants with owner financing and then collect a "mortgage payment" from them while also charging lot rent. This is where you see the biggest returns and I have all the resources and documentation already created to execute this, there is just a shortage of supply. If you go into the rural parts of GA, SC, etc, there are excellent deals.

Anyways, let's connect offline. I'd be interested in discussing further on the subject. I just don't think Miami is the market where this can be profitable.

Mark Brogan · Answer

i watched my parents rent mobile homes when i was growing up it worked well for them and it can work well for you read about mobile home investing on bp as much as you can findgood luck @Jose Alonso

Chad Dunn · Answer

If you buy land and MH separately be prepared to have MH moved (3k here). Make sure the land you buy has water and sewer connected already also (another $6900 here) in Pensacola fl.

Orlando Paz · Answer

@Jose Alonso - I used to live in Miami until 2001. I lived in Miami Lakes, then moved to Aventura. Miss those days (sometimes!)... Anyway, I would say to look through sites like Craigslist and Backpage. Also look on Ebay. Look outside of the metro Miami area. Places like Kendall and Homestead, and maybe the far West part of Miami (near the everglades). Get yourself some inexpensive business cards, and say something to the effect of buying and selling mobile homes. Then pass those out to people who work simple jobs at convenience stores, grocery stores, etc...   Get creative and offer a small reward for referrals (if the referals successfully get into a park, and they purchase or rent your MH). Get the word out, and soon you may start to see some good deals coming out of the woodwork.

Jose Alonso · Answer

Hey @Carlos Rovira sounds great to me man, this is the reason I joined BP to meet investors and just people in general who have a passion about real estate like I do. Would love the opportunity to connect with you offline and discuss the matter in greater detail. Send me a private message or email and lets make this happen.

(Success is a journey)

Jose Alonso · Answer

Thanks @Mark Brogan

Jose Alonso · Answer

Hey Orlando Paz thanks for the input. I live in Miami F.L and here in my area I cant find a mobile home for under 15 k. Just don't feel comfortable enough investing in Ft. Myers or northern Florida where I know the mobile homes you are talking about do exist. I work a full time job, just wont have time to drive up there to show the home and or manage it. Any thoughts?

Joel Owens · Answer

Mobile homes is kind of  a dying niche. Some states and areas they are readily accepted but not like they once were decades ago. The parks were tolerated but now counties and cities want to get rid of them. The parks harbor lot's of complaints as eyesores to the communities and shifty people ( not all are bad but you get increases of instances with MHP's on average. ) The county and cities also have an incentive to tear the parks down and impose heavy regulations on them because the tax base is low. If you have a trailer sitting on 1/4 acre of land that is depreciating and not worth much then there tends to be little taxes on it. The local government would generally much rather have a new subdivision of mid to high end homes built and get a lot more property taxes with higher assessments. Dodd Frank changed a lot of the Lonnie strategies with more regulations to deal with.

A family friend in her late seventies has owned the homes for about 40 plus years. The trailers depreciate and then she goes out and buys another one for 2,500 through wholesale channels. Rents 150 a week. Gets back her money in about 2 years on the replacement trailer. Evictions and turnover do happen more frequently due to tenant selection pool.

DO MOBILE HOMES MAKE SENSE?

Most Popular Reply