Mobile Home Flipping and Financing and Mobile Home Parks

[Tammy DiGiamarino]

Hello!

So excited to make this first post on Bigger Pockets. I joined a while back and am ready to make some new types of investments! I hope my questions will help others as well.

I am a California Licensed Real Estate Agent. I have my license for personal use - purchasing and selling SFR rental properties over the last 15 years. I would like to purchase a mobile home park and do not know anything about the mobile home industry - as far as how parks are run and buying and flipping or buying and renting mobile homes inside of parks. Before I purchase a park I would like to flip some mobile homes locally. I live in Southern California - around the san Gabriel-Pomona Valley-Inland Empire area. I am almost finished with the book Mobile Home Wealth by Zalman Velvel written in 2008. Dodd Frank and the Safe act have come into being since the book was written. On another note, I am also considering a mentorship with John Fedro. He seems to be very active here on Bigger Pockets and super responsive.

Here are my questions for California mobile home investors out there:

1. If I get my California Brokers Real License can I carry back the note on a flip and be in compliance with Dodd/Frank and the Safe Act?

FINANCIAL CODE - FIN

DIVISION 20. CALIFORNIA RESIDENTIAL MORTGAGE LENDING ACT [50000 - 50706]

CHAPTER 1. General [50000 - 50006]

(a) No person shall engage in the business of making residential mortgage loans or servicing residential mortgage loans, in this state, without first obtaining a license from the commissioner in accordance with the requirements of Chapter 2 (commencing with Section 50120) or Chapter 3 (commencing with Section 50130), and any rules promulgated by the commissioner under this law, unless a person or transaction is excepted from a definition or exempt from licensure by a provision of this law or a rule of the commissioner.

(9) A real estate broker licensed under California law, when making, arranging, selling, or servicing a residential loan.

https://leginfo.legislature.ca.gov/faces/codes_displayText.xhtml?lawCode=FIN&division=20.&title=&part=&chapter=1.&article=

2. Advice or input about talking to mobile home park managers about purchasing mobile homes in their park

3. Any other advice/experiences about doing these deals

4. Feedback from anyone who has paid for the mentoring program with John Fedro

5. Any other input would appreciated!

Thank you in advance!

[Jerry Lucker]

Hi Tammy,

I've specialized in flipping mobile homes in parks for well over a decade. I've learned a few things.  I flip the homes for cash. There are several reasons for this. The profit margins compared to real estate are way higher. I can make a lot more money using the cash to immediately do more flips than I ever could by carrying the contracts.

Selling for cash I don't have to worry about getting paid every month. I never have to worry about evicting someone. I don't risk the home getting trashed so I have to put time and money into it again.

Mobile homes have titles just like a car. The buyer is on the title as the registered owner. The lien holder is on the title as the legal owner. If the buyer/registered owner doesn't pay the park rent the legal owner has to. As the lien holder you also have to pay the insurance, maintenance fees, utilities, etc. until the home is rehabbed and resold.

Mobile homes are good bang for the buck but, except for the newer ones, they are not built strong. They deteriorate faster than stick built homes. Mobile homes in parks are considered personal property so like a car they depreciate. This has no effect on a 90 day turn around flip but over time it will show. 

If you know where to look you can get just about any mobile home in a park financed for a buyer so there is no great reason to carry paper. That works great with real estate - I have a nice portfolio myself - but not with mobile homes. 

I've done a lot of deals, a Lot. Hope this insight is helpful!