Is it possible to make money as a real estate investor, flipping or owning mobile homes?
Yes.
But first, don’t you hate that part, you need to know what you are doing.
Making the money part is good when it happens, and it can be very rewarding when it works right.
So how do you go about flipping them?
Here’s the basic rundown on doing this. I will try to go into each part a little more, but this first part is to give you a general idea.
The basic idea here is to locate one you can buy for one price and sell it at a higher price. This can be done the same day or the next, or you could choose to sell at a later date.
How you go about the timeline is up to you, and it also depends on if you intend to keep this mobile home or just make money from it.
Taking two days to make $1,000 or $10,000 is up to you.
Mobile homes can be lucrative as an alternative to the high market values going on at this time. Residential homes have skyrocketed up, over the last 18 months.
The good part of this is that mobile homes are a somewhat cheaper alternative to own or flip for good money.
(Note) Pinellas County, Florida had the highest concentration of mobile homes per square land area in the United States a few years ago. This is because the land area is small, although many mobile home parks are located there for people that retired from colder climates and purchased a winter or retirement residence there.
Other areas and states have more mobile homes in them, but their land area per county is much larger.
A park that owns the lots are, a riskier investment area, as there are many times lot fees, and if you can’t quickly flip this out for a profit, the fees could seriously erode your intended profit. I will do another article on investing in parks at a later date, in order to keep this post shorter.
(I have seen this happen where the lot rents are $900.00 a month. The people that bought it paid the right amount, did some renovating, and held it too long, losing many thousands of dollars in this transaction.)
Don’t be those people.
The cleanest type of mobile home investing and flipping is a mobile home that sits on its own land where the property owner owns the land and the mobile and pays whatever taxes on it for a laissez-faire lifestyle.
There are many ways to work with mobile home parks that charge lot rents, and I will get to that later.
Something you should do before making a purchase of a home on land is to know what it will sell for as-is, repaired, or totally renovated, then subtract the intended profit you expect to make. This would be your purchasing range price.
Too many would-be investors take this part too lightly and when it bites into their profit, they get sour on flipping mobile homes.
Holding costs are the next calculation that needs to be done. Water, electricity, or any other utilities you intend to use should be considered.
Taxes come right after that.
Got those things figured out? Let’s move on.
How are you intending to sell this thing? And for how much?
After all of that math has been figured out is when you know approximately what your profit is going to be.
Some people, after doing one or two deals like this can do some pretty quick calculating in their head and get really close. You might be able to also, if not, break out the calculator.
It doesn’t need to be a financial calculator; this is just simple math.
Now that you have made your offer and hopefully bought the deal, where do you begin?
Are you just advertising it as is for a quick profitable turnaround?
What if you have no idea how you are going to do this, you were just happy to have done the first part of buying something?
Go back and read the part right after I mentioned laissez-faire down to here, again!
I get it, sometimes the deal just comes at you, and you just need to buy it before someone else does. Been there! Done that!
Moving on, no matter how you got it, what’s the timeline.
Remember, every day you own this deal costs you money somewhere.
Taxes especially, but things like the utilities, and now you might need to hire people or if you do your own handyman work, you should line those things up right away.
So, let’s say it took you 30 days and you have the place all cleaned and shined up for the next buyer so you can collect your profit.
How are you going to sell it?
You could go with selling it yourself if you know how or enlist a real estate agent that is known for selling mobile homes.
(Some agents may take the listing, although they have no clue or they get lazy about promoting your listing, so that it sells fast, which is why a mobile home friendly agent is suggested).
One thing we almost always rely on is, could we live here if we needed to? If the answer is yes, be proud of what you did.
No matter how you intend to sell this for your profit, when it is all done and everyone involved has gotten paid, how did you make out?
And can you do it again, over, and over.
Now we have the basic part worked out. Buying, selling, and flipping either mobile homes or block homes, they both work about the same way.
Now we can begin to look into many other types of investing if we have money to purchase them with.
This is not a complete or totally accurate tutorial on the many working parts of mobile home flipping or investing, as each state varies with holding title, and how you need to go about buying and selling. You will need to check with your state and county you choose to buy in, to know the laws, regulations, or rules on the complete information you need to know before making any such investment.
Although the basics are the same, there are many more things to consider BEFORE looking for a mobile home for sale in a park.
(Here is a way that one person invested in mobiles accidentally and later owned the whole park)
I met a man a while ago and asked him what he did as he was almost always buying newer things, and fully funded a race car team out of his savings.
He gave me rundown of his life, obviously not the full details, but on how he made tons of money over time.
He had gotten divorced and gave his ex-wife everything he owned and moved to Central Florida, with his clothes, $1,000.00, some tools and a truck. He needed a place to live so he rented a one-bedroom mobile home in a kind of sketchy in a park.
He had to pay the rent and then the owner paid the lot rent out of the rent money. He got a job locally, and a few months after, the owner of the mobile he was renting asked him if he could buy the mobile from him, as he was moving out of state.
They worked out the details and he bought the mobile, now the lot rent was his problem.
As it turned out, there were other mobiles in the park that needed work, and either the owners had abandoned them or had them for sale.
He inquired at the management office and many of them had past due lot payments, or the park now held title to the abandoned ones. He asked them to finance the abandoned ones to him for a reasonable payment, and he would go about fixing them, with not lot rent payment until he got his first tenant.
They agreed and then he set about renovating them one at a time, while he was still working.
Moving on, he had about 7 mobiles he owned, and rents out and part of the rent covered the lot payments.
He continued purchasing them until he owned more than 50% of the homes in the park. By then he got the idea that as a majority owner, maybe he should work on either purchasing the rest of the homes, or just own the park.
He got an early Christmas present when the owners of the park approached him about purchasing the land the park owned, on Christmas Eve.
With the money he was making and saving, as he still lived in the one bedroom he started in, he worked out a deal to finance the land only from proceeds of the park itself, when the rents and other owner lot payments came in, once a month.
He said they couldn’t have reacted faster and sold to him on those terms.
He then said that if the previous owners had just waited to sell, they would have been approached in a few months by a National Company to purchase the park for development.
They ended up purchasing this park from him for about 15 times what he paid for it from the original owners.
Now you have an idea of how owning one mobile home can turn into many.
Look for a future post about mobile home money on investing in parks.
There are many more things to be aware of when you invest in a home there.
Renting out or owning a single piece of land with a mobile on it is a good way to begin, as you will learn about either owner financing them, renting them, or flipping them.
In many ways they are easier to maintain, the profits are almost as good in many cases, and you can carry what you now learn about them, into the mobile home park to invest in.
I am not intending to leave you stranded here, although there will be many more articles that will apply to things such as owner financing, being a landlord, or ways to finance almost any property with your future profit in mind.
Next time you see a mobile home on a single piece of property, inquire as to whether it is for sale or not. Then take the time to learn as much as you can about purchasing it. Done well, it could change your life.