Can I compete with parks when they are offering financing?

[Michel Mahler]

I've been bitten by the mobile home investing bug and would like to get started. The types of homes I'm interested in are those that can be purchased in the $5k and under range and be sold over the next 3-5 years at a significant profit. F.S.B.O. Inventories seem rather low, almost non-existent. 

I've been studying the markets in my area but several mobile homes for sale appear to be for sale by parks who will finance themselves. If parks are willing to finance properties themselves, is there still a decent market in markets like this to be able to make mobile home deals on contract?

[John Fedro]

Hi Jeffrey,

Thank you for reaching out and connecting. Additionally, thank you for your detailed messages as a certainly does help me try to answer your question a point you in the right direction moving forward. Please see my thoughts below in bold. I've included both of the previous messages in this one reply.

I have been watching some of your mobile home fix and flip videos on youtube and if you don't mind I was hoping to get your thoughts on a couple questions. Thank you for watching some of these. I do hope that they have been somewhat helpful to thus far. I'm looking to purchase a 197(?)3 2/1 single wide that's being offered from a park management company, they're asking $4000, although when I went in to talk to them it was take it or leave it price is firm. I've been through a lot of homes from the 1970s, some of them look amazingly well taken care of and others look like complete nightmares. Additionally, the size of the mobile home will matter is a larger home will typically attract more potential buyers. The area and other factors obviously matter as well.  The home is far from move in ready, I'm in construction and after looking it over and putting some numbers together I figured $5-6K to reno with me doing the majority of the work. Comps in the Boise ID area would be around $15K, so with material and labor it does'nt seem like there's much meat left on the bone. It sounds like you would be wanting to resell the home to an all-cash type of buyer if possible. Good job finding these comparable sales and understanding one exit strategy. Even when selling it for cash it sounds like it will be profitable at least a little bit. With that said I would agree with you that we are not in this business to make a few hundred dollars here and there, but rather a significant income moving forward.

My thought on mobile home re-selling is that it would be hard for someone to come up with or get bank financing (especialy in a park) especially in a part of the country where income wage is low. What are your thoughts about owner carry or lease to buy with a solid down payment, something close to paying off the purchase plus reno. The area that you are in is certainly growing and in demand. I'm certainly a very big fan of selling via payments when you are selling to the a low-risk tenant-buyer using correct procedures and paperwork. When selling on payments you will likely be able to sell the home for about 25% or more of your cash price. Whoever you may have to work with a tenant-buyer on the down payment and monthly payments depending on the park in the specific area of the city. Be careful when selling on payments as we can often make mistakes or sell to the wrong people which can cause you a good deal of headaches.

I should have added that space rent in the parks that this co. ownes or manages is $525/mo. water, sewer, trash and 5yr contract. I was hoping to be able to work a deal with them on space rent for the first couple months but they don't sound like they're into dealing. Would dealing with management companies that won't work with you be a deal breaker for you? The fact that the park manager will allow you in the community to purchase and resell the home is "working with you". With that said some parks are more flexible than others with regards to the price or terms they will sell their homes for, as well as a number of other matters. Whenever I work with folks we try to focus on the path of least resistance in and around the local area. I mention this because while this opportunity does seem like it will make some money, it may not be the path of least resistance or most profit for your first or second MH deal in a park. I would encourage you to continue talking with more managers as well as many more sellers if possible. Keep up the great work. This business is definitely not easy or for the lazy. All the best. If you have any follow-up questions or concerns never hesitate to comment back for us all to help or email me directly.

Talk soon, John