Mobile Home Cash Flow Win

[Mark Howland]

Investment Info:

Mobile home buy & hold investment.

Purchase price: $34,000
Cash invested: $2,000

I attended college in a small town and found a niche that I could take advantage of. They have mobile homes that rent for as much or more than SFH's and other college housing. So small capital investment BIG ROI. Is it sexy? Far from it. But I will enjoy my cashflow as people shake their heads and judge. People that see the opportunity are those that I want to surround me and not those who would scoff.
I ran the numbers and found that buying it cash was better than leveraging it because mobile home loans aren't as good as SFH's so that is the only downside. Although on the flip side, if I had done a SFH, I probably would have had a similar down payment 30 years of payment and not much difference in income/cash flow. So I'm not mad about it.

What made you interested in investing in this type of deal?

I had seen people renting these homes for more money than I could imagine so the numbers seemed inflated... but it turned out to be real.

How did you find this deal and how did you negotiate it?

I found it on Zillow listed for 42,000 and I got him down to 34,000 and he paid all closing costs including the inspector fee, all taxes for the year (Bought it in Feb 2021 and he paid through December). I actually almost lost the deal because I was negotiating for an even bigger drop and he gave it to someone else who was willing to pay 34k so I came back and matched that offer and got it.

How did you finance this deal?

Cash

How did you add value to the deal?

New appliances and minor cosmetic fixes. $2000 was all I did but it made a HUGE difference, it looked pretty bad before.

What was the outcome?

Steady cash flow, solid tenants, I'm only 8 months in but no problems to date.

Lessons learned? Challenges?

My biggest lesson was listen to the numbers and not to your emotions. I was scared because of the negative connotation that goes along with trailer parks etc. Turns out, a deal is a deal. I had a lot more in my power than I realized when it comes to negativity. For instance, I could screen my tenants and make sure I don't put sketchy people in there. It was an empowering lesson to help me overcome future fears

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

I actually did everything myself on this one.