Pros and cons of mobile home investing?

Question

Hi,

I'm new to real estate and learning different strategies to invest. My city has various mobile home parks so the idea intrigues me. Does anyone have experience with this strategy? Do you buy with all cash? How do you analyze a good and bad deal? What is the average fee to transport from one location to another, if necessary?

Thank you

Jack Martin · Answer

@Hugo Solorzano I can share some highlights on the pros and cons.  The Pros - IMHO, mobile home parks are the most recession resistant real estate, making the asset class attractive to investors who are seeking stable cash flow, yet don't want to be exposed to market cycle risk.  Inside of that recession resistant behavior, MHPs can produce more stable cash flow than most other real estate, have less tenant turnover due to homeownership by the tenants, have less maintenance once stabilized, have less capex requirements over the long term, and have the greatest demand, especially in times of uncertainty.  The Cons - MHPs can take longer to stabilize, there can be more components to a deal, there are licensing requirements for home sales, and there just aren't as many parks that trade as other asset classes.  Parks are being pushed over for redevelopment faster than they are being built.  With all that said, a stabilized park in a good location is one of the most stable investments on the planet, so even though it may take longer and there can be more work, it is worth it in the end.

Hugo Solorzano · Answer

@Rachel H. This was helpful, thank you!

Rachel H. · Answer

For me, it's just the homes for now. I receive a lot of opportunities for mobile home parks and JVs with other investors. Though, I really want to have the time and freedom that I have with investing in mobile homes. It's not always like that when owning a park. I am looking into buying land and combining the mobile home business with it in the future. Hope that helps!

Jack Martin · Answer

@Hugo Solorzano you hit the nail on the head. The way you approach management is one of the key factors to success. A great deal with the right capital stack will be a winner with the right management strategy. The wrong approach to  management could make a great deal average.

Hugo Solorzano · Answer

Hi @Rachel H.

Yes, that was helpful, thank you! I plan to look around and hopefully meet park owners in person. What are some of the hardest things about being a MHP owner? Do you strictly focus only on lots or do you own some mobile homes too?

Rachel H. · Answer

@Hugo Solorzano If you're interested in the mobile home investing space, it may be worth a look if you see a lot of parks in your area. Just like any other area of real estate investing, there's definitely a lot of trial and error involved. I've been investing in mobile homes for over a decade. Have had many ups and downs. Though overall, it's been pretty profitable. Hope that helps!

Hugo Solorzano · Answer

@Brenden Mitchum thank you, this was helpful! I have never heard of John Federo so I will definitely look at his content. I agree with you, it seems like tenants typically destroy these properties so you would definitely have to find a good deal and agree on a program. I've seen mobile homes for free but that can be intimidating because of their usual condition. Perhaps it's a matter of overcoming that fear to jump in on that good deal. Thanks again for your input and invitation to chat again!

Hugo Solorzano · Answer

@Nate Arrington thank you this was helpful. I assumed most parks would allow me to rent but I'm glad to know otherwise. I plan to make connections with mobile park owners. I also haven't tried much of YouTube so I will give that a shot! What I like about this niche is how cheap you can buy and repair a mobile home! Thanks again for your input!

Brenden Mitchum · Answer

Hey @Hugo Solorzano

There are definitely people who have been successful in the MH investment strategy but you really need to buy great deals and know what you're doing. Tenants absolutely trash those things and they are not constructed from the highest quality materials. It seems that the most successful MH investors buy very cheap, fix up and put tenants in on some kind of lease purchase/rent credit program. Check out some podcasts that John Federo has been on (BP has a couple). Here is his website if you want to learn more. Copy what that guy does and you have a good shot at making this work.

Please, feel free to message me anytime if you have other questions or just want to chat!

Nate Arrington · Answer

Hi Hugo, I don't personally invest in mobile homes, but I did look into it for a bit. I found a lot of information on youtube. It is a little different than normal real estate, which it sounds like you know. One big thing I kept coming across is you need to make sure the parks you are looking at allow you to rent out the mobile home, some parks only want the owners living there. Just make sure to do your research (BP, youtube, social media accounts) but it could be a great niche if you can get the hang of it! Hope that helps.

Pros and cons of mobile home investing?

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