Mobile home investing typically happens one of two ways. You invest in mobile homes attached to your own land, OR you invest in mobile homes that are on someone else’s land (typically the land rented in someone else’s mobile home park). Today, let’s talk about mobile homes located on rented land.
First of all, there are no closing costs. In many states, owning a mobile home is very similar to owning a car or a truck. For us as investors, that can mean no title insurance, no real estate taxes or insurance prorations, no fees, no surveys, and no doc stamps or other costs that typically come with home ownership.
Mobile homes located on rented land, such as mobile home parks, do not close at a title company or attorney’s office. You can close “traditionally.” I even encourage that in some cases, but you can save those dollars once you understand the process for your area. As I mentioned, mobile homes in parks are considered “personal property;” and for that reason, it may be as simple as buying or selling an automobile, boat or lawnmower.
The second reason to invest in mobile homes is you have built in bird dogs and lead generation. At the start of my mobile home investing career, I was almost too embarrassed to tell people I was investing in mobile homes. I really thought that my investor friends were sure to scoff and think I had lost my mind. What really happened? No one scoffed. Well, maybe a few did at first; but for the most part, my fellow investors were happy for me. They were happy because now, they could do something with all the mobile home leads that had been stacking up for months. They could bring them to me. Investors were bringing me done deals or great new leads on a silver platter every day. It still is amazing to me no one seemed to know what to do with “ready to go” mobile home leads that came to them from their regular marketing efforts.
The other “built-in bird dog” resource is the park residents themselves. Once you start visiting the parks, you will be amazed at the people who will simply strike up a conversation. They will begin telling you not only their business, but everyone else’s as well. If you are willing to take the time to listen and ask good questions, those conversations often lead to additional inventory, information about market needs and motivated sellers and buyers.
Next reason, avoid the crowds. When I started getting leads and looking at homes listed at $1000, $3000 or even “FREE…MUST BE MOVED,” I really thought that my calls would be answered with “It already sold.” To my delighted surprise, approximately 9 out of every 10 homes hadn’t been sold and the sellers were desperate to play “Let’s Make a Deal.” I remember to this day the voices of anxious mobile home sellers telling me how other investors wouldn’t even talk to them because they had a mobile home or how interested buyers were asking for owner financing and the seller didn’t understand the concept and didn’t feel equipped to handle that situation.
The fourth reason is low dollar deals…REALLY! This is the reason I started buying mobile homes. I didn’t have cash or credit when I started. Mobile homes in parks can be VERY inexpensive. I have gotten many complete homes (appliances included) 100% FREE in terms of purchase price.
With mobile homes, you start with initial investment capital of hundreds of dollars, not thousands. This also helps if you are hung up by a “fear of loss” factor. Although none of us like the idea of losing money, committing a $1,000 “uh-oh” (what we call that the cost of “real world education”) is a lot easier to recover from than a $100,000 catastrophe!
The final reason: going, going, gone! What’s that you say? “Good luck selling a mobile home and making money in this market!” It true selling a used mobile home in a park for “all cash” could be difficult in many markets today. The fact is not many mobile home buyers have $5,000 to $80,000 lying around. But there is a world full of serious buyers ready to own their own home.
Our target buyers have had some credit challenges in the past and may not be bank approved; but they DO have a clean record, savings account and good job history. Plus, they have $2,000 to $5,000 cash for a down payment and the ability to make monthly payments. In my experience, they make the ideal customer; and being able to create a home ownership opportunity for someone that thinks they can never own (or never own again) is AWESOME!
Those are just a few of the many reasons that mobile home investing can be easy and extremely lucrative. I hope to see you in the Rich Dad Education Mobile Home Elite Training, so you can discover more of the profitable approaches to investing in mobile home units and parks. And so, like I did, you can go from skeptic to motivated!
By Jonathan Dugger
Rich Dad® Education Elite Training Mentor