Mobile Home Park 1st deal

[Adi Conciu]

Hi,

Recently I drove through some parks and I found 1 or 2 decent deals. This would be my 1st time getting into real estate and mobile homes. While I would be able to get a good price on the homes, I am worried about the $500-600/month fee these parks charge, it seemed high to me and I am not sure if I would make a profit from someone who would buy it. From someone who has experience with mobile homes rentals and fees, is that too much? Would someone who would buy the home from me through sellers finance be able to afford the $600 fee plus the finance cost? Should I try to start in a park where the fees are $200-300 in order to make profit? thanks. 

[Bill Neves]

@Adi Conciu I am in the same area.

See comments above from @Rachel H. and @Colby Wise - good info.

Parks in this area don't allow rentals. That's more in the south. You can sell on payments, rent to own, owner finance. We've done it a lot.

We usually don't have the issue of people wanting a park vs. apartment. People we sell to WANT to live in parks. If they don't want to, we don't sell to them. Seems simple but ...

If there is any question, we compare prices to apartment rent. Affordable Housing. 2 or 3 bedroom here currently is $1500 and up. Park rents are usually under $700. There are some higher. I advise to avoid them. Harder to sell units since people always look at rent. It's a sellers market right now so not really an issue.

They will likely pay $400-$500 monthly payment for the home. That's $1100-$1200. That is well under apartment rent. And it's their own 4 walls, floor, ceiling, private yard for kids and pets, private parking, for 2 cars usually. No noisy neighbor on a common wall, public parking, no yard, etc. Beats apartment rent all day long.

Plus once paid off they just have park rent. Half or less than half of apartment rent.

Some people have said "I don't want to pay rent, better to buy a house". Good if they can. But they would also have property taxes. Park has rent. They're paying anyway.

You MUST do market analysis. Know your market. What are rents (apartment vs park), park vs park, sales prices, etc. In many areas there is very little inventory. Places are selling within a week or 2 of listing. We sold 2 last year BEFORE we were done. Put out signs during finish work and they were gone. Listings can be Realtor, Zillow, Craigslist, MHVillage.com, etc. 

Talk to realtors/dealers who sell mobile homes. As what they are seeing for sales. Not all do.

Also will the park allow flipping? Some do, some don't. If they don't, DO NOT QUIT. Others will allow it.

I don't tell them I'm an investor or flipper. Bad word. I say I fix places up and finance them. Now you are on the peer level of a bank or credit union instead of a flipper. Make sense?

I've been told no several times. In one park we just sold our 9th flip in April after they told me "No we don't allow that here", 6 years ago. In another I just sold 2 in June and July this year during the virus lockdown. That park told me "No" initially too. No, doesn't always mean No. 

Happy hunting. There are lots of deals in Portland area. Yell if you have any further questions.