Lonnie in other people's MH park

[Jimmy H.]

I had a thought about doing lonnie deals in mobile home parks that you don't own.

My idea is this: there are plenty of old mobile homes around for cheap and ones that can be fixed up and "flipped" for relatively small amounts, there is a strong market of people who want to live in parks and people who can't get financing but want to "own" their own home, and owning and operating a MH park has a variety of maintenance issues and costs. Top that off with the fact that returns on lonnie's can be high and require relatively low startup capital - and i'd say it always feels nice to get to sell one home multiple times (if you get a defaulter).

I was thinking that MH park owners usually have a good bit of empty pad's - already hooked up with services and ready to go. They likely will want to collect all of the pad rent they can. I would work a deal with them to move mobile homes to their park - generally fixed up and nice, and lonnie them (or basically owner finance them) to a buyer and let the buyer pay the pad rent. I was thinking you may even be able to work a deal with the park owner that you pay no rent or a very very small pad rent if the home is empty, but the eventual buyer will pay full rent to be worked out with the park owner. You can argue that you're paying to move the homes and that your interests are aligned with the owner in that you, of course, want the home to be occupied as well.

This strategy would keep you from really doing any maintenance or having any holding cost or utilities. The key to success would be in finding park owner's to deal with, and starting one home at a time and finding a cheap home or a flipper, pay a grand or so (I think this is a reasonable estimate for in-state mobile home movers) to get it moved to the park - and then lonnie it.

I'm looking for low maintenance or variable expenses with high returns

Thoughts? Anyone tried a similar strategy?

[Bill Gulley]

Yep, just be prepared to pay the pad rent and utilities when your deals go south and your buyer leaves...financing mobile homes as an investor fall under the SAFE Act, so might check with your state and see how it might effect you and your business,