Mobile homes, why doesn’t more people buy and lease these units ?

Question

I’m just curious why more investors are not grabbing these 2k$-5k$  homes and leasing to own with a potential ROI 100%+... trying to get a partner involved and he’s saying the numbers are too good to be true. I understand #s very from market to market.

Thank you for any helpful advice!

Reid Hanley · Answer

The 'work' is not only collecting rent but it is also maintaining the units. Tenants can do a lot of costly damage to mobile homes, as can mother nature.   At $300 per month profit (which is calculated as rent rate- lot fee - repairs - vacancy...so rent would have to be $500+ ) you are making $3600 per year.  The wrong tenant or a big storm can do this much damage easily and the year is a wash or worse you're in the red.  Staying on top of tenants and repairs is critical in this business.

With all that said you can make a lot of money if you put in the 'work'.

Timothy Albright · Answer

@Jeff Morelock

The “work” being getting the monthly payment for the lower type tenants... I found a home on a decent lot, owner is asking 2000$ for this home. Seems to be in nice condition, lot rent is 150$/month.  Appears 2k-3k will make this place fairly nice.  300$ over 60 months =18k$ return.

Rachel H. · Answer

@Timothy Albright Yes, there are many people doing these type of deals. Though, mostly those who live in and around the parks. The business is one that you're more successful offline being local versus online. Hope that helps!

Hai Loc · Answer

There are lots of things I would do differently but is not relevant to what your goal is.

What your doing is totally fine.. It just easier if you own the land/park. For you to market a mobile home in someone else's park may be a challenge if your competing with the park owner. Just make sure you screen your tenants well... The ratios look good but you can't expect a lot from who your buyer is

Timothy Albright · Answer

@Hai Loc

Could you shine light on any hurdles you ran into, or perhaps something you would’ve done differently knowing what you know now? I’m really interested in buying, Reno, lease -w- down payment and repeating that process.

Timothy Albright · Answer

@Reid Hanley

I understand the risk of tenants and Mother Nature, that’s a very valid point to make... however I’ve seen many owners act as the bank and lease to own to potential buyers, at that point the buyer is actually paying you to own the property... if that’s the situation would the buyer take all the liability for any repairs that occur? I’m completely new to this and trying to soak up as much info before diving in so please overlook any, for lack of better words “dumb” question. I truly appreciate any and all info tossed my way.

Jeff Morelock · Answer

Guess that depends on where you are. Its a good business in Florida but it tends to be more "work" when you're in the lower price ranges due to the type of tenants cheaper mobile homes attract. Still, the money is good if you don't mind the work.

Tim Herman · Answer

@Timothy Albright Dodd-Frank and predatory lending. You have to qualify the tenant buyer so that they can complete the transaction. I think you can only do 3 a year before being a loan originator.

Mobile homes, why doesn’t more people buy and lease these units ?

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