Where is the Analysis?

Question

Can someone point me to a guide to analyze Mobile Home buying/financing?  I want to do it similar to how @John Fedro does it (great podcast).  However, I'm wondering if there is a place to read guidelines on knowing you have a solid deal when analyzing?  I did a search and am not seeing one.

Paul Sofia · Answer

@Dan Mead, I have done plenty of MH (over 100) flips but used to be able to buy real cheap (land/home).  I started in the late 90's and I used to be the only game in town flipping MHs just outside of Charlotte.  More and more people have gotten into buying mobiles to flip which in turn jacked prices up leaving small margins.

The last one I flipped was in 2014.  I bought for 22K.  It was on nice one acre lot.  I had it fixed up really nice and sold for $75K.  I could've easily sold it for 10k-15k more but I knew the gal and she was a single mother.  Tough to fine ones like that anymore.  Just get a realtor to pull comps for you and go from there.

Dan Mead · Answer

Indeed @Daniel Derrick!  In fact, I spent last night doing that.  Still a work in progress, I'll refine it over time.  enjoy and good luck!

Dan Mead · Answer

Thanks for your response @Bill Neves

John was on BP podcast #75

He also has his own podcast.

I understand that this and SFH are different animals.  However, I don't think that just knowing that should preclude me attempting to setup rules and therefor being able to build tools to help me analyze a deal in Mobile Homes.  For instance,

@John Fedro has given me the closest thing to 'rules' that he lives by;

• no homes in 55+

For financing, sell the home but carry,

• All Cash back in ten months
• 60 month+ sell
• min cash flow of 300 monthly

OR

• cash for 3x your investment

I'll take a crack at it; but just knowing this stuff will allow a person to structure and analyze a deal when they see one.  Of course, with the caveat that his is how @John Fedro goes about it and it likely looks different for others

If I spend $10,000 total out on the deal then I will want to be able to recruit that back in 10 months.  I could then know that I need to resell that home for (for instance) a $3,000 move-in fee, and $1,000 monthly (300 lot rent, 700 payment).  This would give me $10,000 total in 10 months.  Then I could know that the remainder of the the home would be $35,000 over the course of 50 more months, for a total sell of $45,000 and a simplified profit of 35,000.  Before buying the home then, I know I need to hit these numbers when selling....SO how does that $1,000 monthly compare to the rent's in the surrounding houses.  All of these numbers are things I can easily build into a spreadsheet to help me quickly analyze a deal.  Simplified, but a quick tool to help me analyze a deal, rather than just saying "this game is so different than SFH that these things don't apply".

I guess what I am really asking would then be, what are your parameters as rules that YOU use when analyzing if it's a deal for you?

Thanks for the conversation, it is appreciated

Bill Neves · Answer

@Dan Mead

Mobile home investing is more for cash and cash flow than traditional investing. They don't have the same long term 'value' that a stick built house has.

Not sure which podcast John was on.

Lonnie Scruggs was the granddaddy of mobile home investing. He was kind sarcastic and would ask if you can make $10k profit on $10k into a deal do you need a big calculator or will a small one do? He said those numbers were "good enough!"

I've seen investors tie up $200k or more, doing a flip to make $15k. You can do that in mobile homes with $10-15k involved. Much less exposure.

You can use NADA and local comps for values.

We do mostly mobile in parks, although there are folks on this forum also who say absolutely never do that.

Different business models for different people.

Dan Mead · Answer

@John Arendsen, Thank you.

I completely understand that, which is precisely the reason I'm asking.  From all that I've read and considered, one would think that long the way someone had come up with a specific "rule" or two that works for them when analyzing MH deals.

John Arendsen · Answer

the MH industry is a completely different animal than conventional site/stick built housing. Plays to a completely different beat for myriad reasons.

Dan Mead · Answer

I've poured over the fix an flip deal analysis.  And have used the tools available on the site to analyze several SFH deals.   Just wondering if there are similar tools and rules (ie 70% rule) out there for those in Mobile Homes.

https://www.biggerpockets.com/house-flip-estimatio...