About John fedro

[Stan Kyle]

In the podcast with John Fedro, he says he purchased a MH for around 2k and sold for upwards of 20k. Must have been a higher end newer MH home right? I'm wondering where you find those type of deals on high end homes for so cheap. 

Maybe I'm wrong are those Homes on the older end?

Overall I'm wondering where you find a MH you can buy for so cheap around 2-5k that is able to be flipped and sold for 15-20k.

[John Fedro]

Hi Stan,

Thanks for reaching out and asking this question. When I made this statement on the podcast I likely should've gone into more detail about these certain deals. Below I'd be happy to clarify just what I mean and where these deals can be found. Please let me know if this helps and makes sense.

In every area around the country, outside of Washington DC and Hawaii, you will be able to find mobile homes for sale for $2000, or that you can negotiate to $2000 to purchase. Some of these potential "deals" may be able to be resold quite easily for $20,000 or $30,000+ as-is, however some of these potential "deals" will not even be worth the $2000 paid for the home.

I think that most of us here will agree that purchasing a home for a few thousand dollars in selling it for 10 times this price is a great investment. However these "deals" are not the majority. We have to hear many "No's", some of them temporary, before closing the deals that fit our criteria (mentioned below).

Let's get started: As mobile home investors it is important that you talk to every local seller, park manager, dealer, park owner, repo man, investor, seller, realtor, etc. in your local area to let them know who you are, what you are looking for, and how you can help them too.

In short, it is my goal for newer mobile home investors to become very well familiarized with their local area within a week or two's time. It is for this reason you, Stan, will befriend and speak with every mobile home seller, park manager, etc in your county/parish/township and the surrounding counties as well. From this point you will have a better understanding of who currently is selling their mobile home, the current condition of their mobile home, and why they are selling.

Understand that many of these sellers will be asking whatever prices they feel is realistic for them based on a variety of factors. The important thing to note is that some sellers will need to sell within a few weeks or few days, and other sellers will not need to sell for months and months.

The deals I am talking about finding come from a combination of knowing every seller in the market and making offers to every seller with an aim to helping them solve their headache and moving on with their lives. We follow up, we stay persistent, and some we close right-away and others take a few weeks or months to come to fruition... if ever.

The important take away is that, from experience, and I say this humbly, that in every area there are sellers and homes to purchase for less than $5,000 for a good looking 2 or 3 bedroom MH. If you are not finding them then you are not looking hard enough, going to enough areas, or talking to enough people.

Please do not go out quickly and buy the first home you see, negotiate to half price, or before you fully understand your local market and the sellers/buyers yet. It is so easy to overpay or do a bad/skinny deal. Yikes... I hope this comment don't come off as me saying the sky is falling. However it should be noted that as investors we take risks and must make a healthy profit to stay in business.

You mention the word "flip" in the original comment as well. While I do fast-turn mobile homes I rarely sell for an all-cash payment arrangement. Many of the homes I sell are sold via monthly payments, rented, or with the help of an approved mortgage loan originator if attached to private land (however for this comment I realize we are talking about mobile homes inside parks).

I hope if nothing else that this comment thread has served as a "high bar" to set future goals/deals to. From California to New England it is my personal recommendation to purchase mobile homes under the following conditions. When you resell your mobile home via payments aim to make all your invested capital back in 10 months maximum, sell for 60 months minimum, and aim for a minimum cash flow of $300 monthly. If selling for cash aim to quickly 2X-4X your invested capital. 

There is so much else to say however I hope that this provides some logic behind my ambiguous statement of buying mobile homes at these prices.

I am very curious to hear what other people around the country may have to say in regards to your question as well. While I am helping a number of folks I am certain there must be other investors seeing similar and/or different numbers as well.

I hope this helps, Stan. If you have any follow-up questions never hesitate to comment back. I know there are a lot of folks on this website that are eager and happy to help provide newer folks with clarity and help avoid some pitfalls. Keep in touch.

Talk soon,
John Fedro