Is investing in manafactured homes a great way for beginners?

Question

Just starting and I haven't seen many discussions on people investing in manafactured homes, would it be a great way to start just to get a feel for it amd work up to single/multi family homes?

Paul Moore · Answer

Hi @Theodore Menchaca. I agree with several of the comments above.  I am in my third decade as a real estate investor. I can tell you that mobile homes are the very worst investment I have ever made.  But investing in mobile home parks is tied for my favorite all time investment. Why?

Owning and renting out mobile homes means that you are owning and managing a cheaply built home to tenants who don’t have a history with an ownership mindset.  There is a lot that can go wrong including extreme maintenance and capital expenses.  Three of the four mobile homes I owned and rented out were destroyed by the tenants, and two had to be hauled off to the junkyard with no chance for repair. I would never do it again.

Investing in mobile home parks is entirely different.  You are owning and leasing out dirt and infrastructure. The cash flow and potential profitability are very high.  It is critical to buy from a mom-and-pop owner and there are lots of things to look out for.  Many pitfalls can be avoided by getting proper training and mentorship. I recommend a recent book The Mobile Home Park Manifesto. You can also listen to a BP podcast from Frank Rolfe and check out his training as well.  Happy investing!

Theodore Menchaca · Answer

Thank you Paul Moore!. . Definitely makes alot of sense, for starting I will definitely steer another direction.

Theodore Menchaca · Answer

All The Info Is Very Helpful And Much Appreciated! It All Makes clear Sense, Being In Austin I've seen a few for sale Recently, But definitely plan on attending seminars and reading more into real estate as a whole. I'm seeing now it's more or less just picking a route out in which you plan to grow with that determines the direction to go in, correct?

Corby Goade · Answer

Contrary to popular belief, investing in mobile homes is an advanced strategy, not a beginners one. Most people believe the opposite because generally the point of entry is lower, but financing, strategy and management are not anywhere nearly as simple as they are on SFH and MFH.

As mentioned above, many mobile homes aren't considered real property, and understanding how and why that happens plays a big part in property value and analysis. They don't appreciate like real property- even if they are converted to real property. They ones that are not, actually become worth less over time, not more, which can actually lower your net worth and ability to leverage and scale if you don't strategize properly.

IMHO, the best way for ANYONE to get started who has no experience is to house hack a small multi.

Best of luck!

Eliott Elias · Answer

There should be no difficulty difference wether you buy a manufactured or single family home. Jump into what ever you interests you and run with it! The only asset class that gets a little more difficult is multifamily

Rachel H. · Answer

@Theodore Menchaca With any type of real estate asset class, it can be done. Mobile homes are no different. Though, it's definitely a niche within real estate investing.

It requires a lot of studying and also field work. Unlike single-family homes and other real estate asset classes, it's pretty difficult to get data when it comes to market research for mobile homes. It requires a lot of local networking and talking to people in the industry such as mobile home park managers and owners, mobile home dealerships, contractors who work on mobile homes and other mobile home investors to name a few.

However, you can be successful with it with enough persistence and experience over time. I've been in this niche for a while. Its had its ups and downs just like any other real estate asset class. Though overall, it's been quite profitable.

Personally, it took me almost a year to find and buy my first mobile home. In the beginning, I did a lot of market research and talking to people in my local area. Getting to know market values and visiting other mobile home sellers on a regular basis helped me to learn a lot about the business and how things worked. There was a lot of trial and error on my part especially when it came to marketing and networking. Some methods worked for me while others did not. Though, it was worth it in the end.

If you're looking to get started in a specific niche (perhaps mobile homes), it's best to learn and focus on that specific niche. Follow a system and adjust along the way.

Hope that helps!

Don Konipol · Answer

Manufactured homes, also known as mobile homes, formerly called trailers, are NOT real estate legally, they are personal property.  Real Estate, or real property, is land and structures affixed to the land permanently.  Most mobile homes reside in mobile home parks, where the owner of the home pays a monthly land rent to the owner of the mobile home park.  Owning a mobile home park, on the other hand can be a great investment.

If the owner of a mobile home places the home on a parcel of land he himself owns the land is real estate while the mobile home is still real property.

Some people have devised what seems like a way to “permanently affix” the mobile home to a parcel of land, and thereby believe the home and land are now both real property.  However, in ALMOST every instance, the method of affixation has resulted in what APPEARS to look like it is affixed, but in reality is not.

All that aside, there are books, YouTube videos, courses, seminars and mentorship’s available from people with varying degrees of success, experience and knowledge, relating to how to make money investing in, or investing time in, some aspect of mobile homes.  However, consider this; when one purchases a single family home, or any other piece of improved real estate, the expectation is that over the next 20 years the value of the land will increase considerably (although not true in all areas), and that even while the structure depreciates it too will become more valuable to due to the rising cost of construction. On the other hand, do you know the value of a 20 year old mobile home?  It’s about 0.

Is investing in manafactured homes a great way for beginners?

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