Mobile Home (RV) "flip"- Title questions (San Diego)

[David Frandsen]

I've stumbled into the idea of flipping a mobile home (A mobile home RV might be a better description of this one). I'm looking for feedback on the process/feasibility for those that have experience. I'm in talks with a seller in South Bay of San Diego. It is a very run down unit. 

1) How does one acquire title of a mobile home? Can a title company transact the deal? 

2) What are the transfer fees/Closing costs associated with a transaction like this? 

3) Is a value-add on an old RV feasible? (I know construction but have admittedly never worked on an RV Trailer :)

4) Red flags to look out for? (how to check for liens, back taxes, ect...) 

Thanks in advance for your help. 

[Cory H.]

I can speak to my experience as a mobile home park owner in Idaho. I imagine in California you should factor in higher prices than I'm showing you below.. 

I have twice "flipped" a mobile home that I inherited from a tenant, and two other times have sold abandoned units that were in rough shape to flippers like yourself.

1. Mobile home titles are transferred through the dmv, just like a car. No need for a title company.

2. There shouldn't be closing costs other than title transfer fee and prepaying property tax (total under $50 in Idaho).

3. Can you add value? Yes, but with a caveat: 

   -FINANCING: Most people that you could sell the mobile home to won't have a lump sum of cash set aside in the amount that you will want to sell it for. Just like if you are flipping a regular house, your buyer will need to get financing. This can be much trickier with a mobile home than with a conventional house. if you can help solve that problem for them then you can sell it for a much higher price.

     -Two ways to solve the financing problem: 1) Provide seller financing. BE VERY CAREFUL IF YOU GO THIS ROUTE! The Dodd-Frank act passed after the great recession puts a lot of restrictions on what you can do. if you want to do this I highly suggest you read Lonnie Scruggs' book Deals On Wheels (which is a great presentation of the idea, but technically now illegal), as well as the supplement that Lonnie Scruggs and his attorney published a few years ago that specifically addresses seller financing mobile homes in relation to the Dodd-Frank act. Even more important, talk to a knowledgeable attorney! A lot of people will say you can't seller finance MHs anymore, but that technically isn't right, it's just a little more work. 2) You can help them find financing through an institution that has licensed mortgage loan originators. 21st century mortgage does this, for example.

As far as adding value to the property, it's the same as any other flip. Here's a case study we just went through:

We inherited a unit after an eviction that was in rough shape. I didn't want to suck up a bunch of my time with a mobile home renovation since I've got bigger fish to fry (parks), so I sold the unit to a friend who is getting into mobile home flipping for $3,500. He did a full renovation: paint inside and out, carpet, fixtures, cabinets, countertop, stainless steel appliances, etc. He went low end on the finishes, but they were new and still look nice. At the end he said he was in for $15,000 total, plus a lot of sweat. It actually looked really nice! When he listed it he got a lot of offers. he passed up an offer at $36,000  that would have required owner financing and instead took a $28,000 cash offer.. 

Good luck!