Looking to invest into mobile Homes...

[Timothy Albright]

I've watched many videos on mobile home investing, also read article after article... I'm having a difficult time trying to understand ROI and cash flow with calculating lot rent. The videos I've seen has tossed around purchasing #s, Reno #s, to calculate a very impressive cash on cash return. Avg lot fees around my area is 210$-340$, I don't see how I can generate enough cash flow off a $8000 investment. (Per video)

[Jim Johnson]

Timothy,

The sort answer is- it depends on the market and the quality and size of the home. We have people that pay $450 a month on mobile home leases for singlewides and more for doublewides. But- that is selectively true. It really depends on the metro area, current space rents and you sort of base your rent / space rent total off the amount a 2 or 3 bedroom apartment might rent for int he area. 

Lets set up an example- 2010 Single wide, 16 x 66, 3 bedroom 2 bath in very good condition.

For instance, in Denver where space rents are like $750 per month, the prices you can get for home leases are quite small. Call it maybe $350 a month.

Now in Dallas where space rents are more like $450 or $500 for a park with the same amenities, that same home might fetch $450 - $550.

You need to really now your market because in some really small town in Nebraska where space rents are like $250, but the average income is much lower, that same home might be back to fetching $350. 

Your question is a good one, but one really needs lots of market data to answer it. There can even be some variance int he same metro areas so you really need to drill it down to a particular park. !0 mile separating 2 parks can be $100 a month in space rents and another $100 or more in a home lease payment. Wrong homes in the wrong parks will not lease or sell, and the right homes in the right parks will sell or lease prior to you fixing them up.