Currently unemployed and looking at free mobile homes as possible option

[Orlando Paz]

As luck would have it, I lost my job a week ago. There are some employment possibilities on the horizon, but nothing sure yet. I feel like my investing ambitions, have been put on hold. My focus has been on looking for work, and working my part time job.

After putting some thought into my circumstances, the only two solutions would be to invest in a small fixer upper residential or look into investing in a free mobile home. With a small rehab, I would have to look into using hard money. Right now such a strategy may not be the best approach. It just seems extremely risky and expensive. I then went on Craigslist, and found some free mobile homes. One of the ads shows a picture, the other does not.  I have not seen the homes in person, but the one with the picture is an older 1970's home in great curb appeal (on exterior). The description says that it needs some work, and may need to have the floor replaced. 

The opportunity to get the mobile home is there. I am already familiar with the park, as they had offered a free mobile home to me when I first started learning about mobile home investing. The park's rent is about $520, and it is in a 55 and over community. For me, these are two red flags I try to avoid. In my circumstances though, it seems like an attractive opportunity. I know from past experience that the park has offered to waive the monthly lot rent for up to 4 months (with a possibility of 6 months waive).

My dilemma is on what should I do???... Even if I got the mobile home, it still needs work (which costs money). If for some reason I still have the home after 4 to six months, then I face the possibility of lot rent. Hopefully by then, I would have a job to cover that risk. Not sure where to go with this. Any thoughts and advice would be greatly appreciated. 

[John Fedro]

Hi all,

First off, I regret to hear about your recent layoff. You are in good company on this website because most of us are here pursuing our own side businesses so that we will not have to rely on the income of a traditional job. Additionally, it is good to hear that you are not being a victim or blaming anyone. This layoff has happened and now you simply must move forward in the best safest way possible.

With all that said I might be the only person here who does not think you should jump into this "free home" deal. I say this to you because of your inexperience in this niche and also the "red flags" that you mentioned in your original comment. You are in a vulnerable position at the moment and I do not think it is wise to make decisions based on emotion versus logic. In this niche it is so important to know your local market, know what buyers will pay, know how many senior buyers there are, and know your exit strategy before moving forward. Based on your original posting it seems like you are taking a shot-in-the-dark because of the "free" home and lot rent. *This free home and lot rent is actually pretty common, so don't worry about missing out on this opportunity because you didn't act quick enough. There will be others I promise, likely in family parks and/or in better shape.   

Without any income coming into you weekly you are taking a gamble that this free mobile home will be quick to repair, attractive to buyers, and lucrative enough to generate a nice payday or monthly income when rented or sold. Because the mobile home is in a senior community it will be a good idea to know what else is for sale in the same community and similar communities locally. When you repair and resell your investment mobile home you may be competing against other sellers depending on how they are selling and the condition of their homes. The snowbirds will be returning later this year so you will have a chance to sell to these folks when they get in. 

If you do decide to move forward with your due diligence than I highly suggest you have at least two mobile home experienced handyman walk through the properties and give you an estimate on the repair work needed. In senior communities many purchasers will want the homes to be in move-in ready shape, as opposed to handyman specials.

With all of this said if the homes are good sizes (ideally 14 feet wide and good sized bedrooms) and do not need more than a few thousand dollars in work, then they may be good opportunities to purchase and resell. It is quite important that you will have this 4 to 6 months free lot rent as you describe in your original comment. This way you are not bleeding the lot rent monthly in addition to making repairs and marketing.

Everyone here respects your ambition and determination to move forward in this niche rain or shine. This "free" mobile home may be a very lucrative opportunity, however do not let the word free distract you from the goal of a real estate investor. In your area there are likely other sellers and/or parks that are confused and willing to sell their nice mobile homes for a free or next to free price. These opportunities may be more lucrative and easier to pursue than the "free" mobile home you described above. Keep in mind that because of your limited budget if you do close on this free home you will likely be limited to this one deal or two until you resell them and can move on to your next opportunity.

In short my advice is only that of one person. Everyone must do what is best for their own interest as they see fit. I highly suggest you look for new employment, start generating an income, then look for slightly newer mobile homes that need less work in family communities. It is far better to wait a little while to start and follow the path of least resistance. I hope this helps and makes sense. If you have any follow-up questions or concerns don't hesitate to reach back out. 

Talk soon,
John Fedro