5 Benefits While Investing in Manufactured Homes
There are so many ways to create value with regards to real estate investments. In reality many of these methods and strategies to profit with real estate are valid and realistic depending on an investor’s area, location, market demand, supply, available capital, time, ambition, goals, and more. This article discusses some of the benefits with regards to mobile home investing.
Investing in manufactured homes and mobile homes may certainly not be the end-all-be-all when it comes to real estate investing, however there certainly are some unique benefits this type of investing allows for its investors.
1. Lack of traditional financing
At first glance this may not seem like a benefit for us mobile home investors, however it is a big benefit and advantage compared to traditional real estate. Many banks and lenders may have few (if any) lending programs available for mobile homes on private land or mobile homes located inside pre- existing mobile home parks. When banks and lenders do have lending programs available for mobile homes, the underwriting guidelines may be quite stricter than borrowing for a single-family home. Often times the mobile home, the mobile home’s foundation, the park, and the mobile home buyer must pass approval before a loan is approved.
In short:The lack of bank financing makes it difficult for mobile home buyers to obtain a loan to cash out a mobile home seller. This may allow mobile home investors to rent a mobile home or sell via monthly payments to an approved buyer.
The lack of bank financing as mentioned above is a partial cause for our ability to help mobile homebuyers and sellers. A mobile home located within a pre-existing mobile home park or attached to privateland will sell or rent monthly for a price comparable to local basic apartment rent.
Example: If a 2/2 local basic apartment (not a luxury apartment) rents for $750 a month, then a localmobile home inside a pre-existing park or attached to private land may rent or sell monthly for a similarprice per month. In this example the $750 includes any monthly lot rent or debt service on the property.
In short: Expect to collect a monthly payment similar to that of local basic apartment rent.
3. Providing value
If you would describe yourself as a person that likes to take and not give back then this bullet point may not be a benefit for you. As active mobile home investors we certainly provide value and help to our local mobile home parks, buyers, and sellers. As an active mobile home investor, it is our goal to…
- Increase the value of local mobile home communities in multiple ways.
- Help answer questions for mobile home buyers and sellers.
- Give sellers options to sell their manufactured homes. Be a one-stop shop when sellers need help.
- Give buyers options to purchase or rent your mobile homes.
Keep in mind that it is not realistic that you will help every mobile home seller. In reality many mobile home sellers do not need the help of a mobile home investor. However, there are absolutely some sellers, park owner, park managers, other investors, Realtors, etc. that do want or need our assistance selling in unwanted mobile home.
In short: This is a people business.
Your nearby location may or may not be a benefit. Typically, the more mobile homes on private land and the more mobile home parks around you the better. Curious how many mobile home parks are located around you within a 50-mile radius? Follow the steps below to discover the nearby inventory.
- Click here to be taken to a third-party website where you can search for mobile home park locations.
- You should see an area on this page to enter in your location. Enter your location here.
- Next, make sure to expand the radius to “Within 50 miles” under the Fine-to your search options. Do not select any other options to fine-tune your search.
- Now click the green search button.
- View all of your results within a 50-mile radius of your location. Please keep in mind that this list of mobile home parks will include some senior communities, rental only parks, and parks with overpriced lot rents. This is also only a partial list and only represents roughly 70% of the parks
around you. More than 50 parks in a 50-mile radius is a good inventory.
In short: The more mobile home parks around you the better. There are likely more parks and mobilehome neighborhoods around you than you are aware of.
When it comes to mobile home investing or real estate investing money can be spent very quickly. Whether you have $5000 set aside or $50,000 set aside, this money can be wasted in a matter of hours or weeks if an investor is unclear about what he or she is doing.
Mobile homes and manufactured homes represent some of the last types of affordable housing in the country. While there absolutely are mobile homes in many areas of the country that sell for over $100,000 located in pre-existing parks, there are absolutely opportunities to purchase complete mobile homes for less than a few thousand dollars in most areas of the country.
In short: Around the country much less than $10,000 may be needed when purchasing used and possibly damaged mobile homes located inside pre-existing mobile home parks. Additionally, structuring creative purchasing terms with sellers of mobile homes attached to private land is absolutely possible in a variety of situations with less than $10,000 cash needed to close. Disclaimer: This business requires daily effort and daily action.
In conclusion every mobile home is a unique property. Every mobile home seller and buyer is typically in a unique situation. There are typically no cookie-cutter approaches or purchase offers to make with mobile home sellers. It is best to fully understand exactly what you are making an offer on, buying, who
you are working with, and the steps needed to safely move forward in any win-win transaction.
Did we miss anything? Please feel free to comment below.
Love what you do daily,