Why Mobile Homes Are Such A Great Investment

Why Mobile Homes Are Such A Great Investment

Why are mobile homes such a great investment? Now I had a long learning lesson about this when I say that, I mean roughly 10 years. Because just recently, I found out so many great ways to monetize mobile homes. And so I want to use this episode to teach you what I know and help you not spend 10 years avoiding mobile homes, but actually taking advantage of so many great opportunities that will likely come across your plate because of mobile homes.

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So let’s dive in here. And again, if this is your first time on this podcast, whether you’re listening to it on iTunes, whether you’re maybe watching me on YouTube, this is all about the systems, tools, processes, strategies to become a successful real estate investor. And all of that not just a wholesaler, but a flipper, not just a flipper, but a buying holder nice to buy and holder, but also someone who can wholesale as well. So let’s jump in here because I think this is a conversation that must be had, I spent the better part of 10 years in my business kind of avoiding mobile homes. I just really thought that, first of all, as I was a flipper, I wasn’t really going to be flipping mobile homes. Now I actually have some close friends that make a killing flipping mobile homes. But that’s beside the point. What I want to bring the light is I was not looking at mobile homes in the right light. As a matter of fact, again, as I was a flipper, I wasn’t going to flip it. So I kind of found no use for them. But it’s just incorrect. As I just mentioned, first of all, I have a handful of friends who actually flip mobile homes and they do it very, very well. myself, I’ve even flipped a mobile home now I can’t say I crushed it. The mobile home actually was a 1977 build, according to the county of Maricopa city of Phoenix. And so we bought it. And the reason why that’s important is point number one.

You cannot get standard financing on mobile homes built 1976 and older, meaning they won’t be able to go get a conventional FHA or VA loan if you are flipping it. So your end buyers kind of caught either using hard money or cash doesn’t mean they can’t use that just means you limit your buyers pool. So I knew that rule already. And I saw the discount we were getting on the purchase price of this mobile home. And so I said let’s go ahead and flip it because it’s built in 77. Let’s go ahead and do it. Well flipped it got a buyer under escrow, in under contract in escrow and in when it came to prove the HUD stamp, which is typically found under the mobile home. Shocking, there was no HUD stamp to prove the age of year built. Another place that you can find this stamp would maybe be on the back of the mobile home. It was not there either. So I’ve had three different crews, two different engineer companies try to go under the mobile home to find this stamp, typically on the beam on the front on the beam on the back or maybe the beam in the middle and no one has been able to find the stamp. So rule number one, have mobile homes, make sure that they’re built 1977 and older if you’re gonna flip it. Well, I didn’t intentionally break it but I broke it somewhere along the chain of title. Someone fraudulently gave Maricopa County records that this was built in 1977. And it was unfortunately hand written and it was approved by the county and I just didn’t do my due diligence to double check with HUD. So completely my fault I will always take onus where it is due. And so rule number one, if you’re going to flip these things, make sure they’re 77 or newer. You don’t need that to be the case. But it makes it a whole lot easier. Right? If it is 1976 and older. There’s just really tough chance getting financing there is financing out there just harder for buyers to be able to utilize that financing or less likely that they’re going to want to because they tend to require 20% down instead of you know, 3% interest is 6% interest. So a lot of buyers just don’t love that. However, I love mobile homes because it’s still affordable. Still, like the only affordable housing left, quite frankly. And so I still am a huge fan. Now, let’s talk about part number two, when dealing with mobile homes. You want to make sure whether they are a fixed to the land, which would be like a residential home, right, it is a fixed the land, the land comes with the mobile, non affixed mobile homes are quite literally a mobile home just that was plopped on a piece of land. Those are the mobile homes that tend to not have too much value. And as a matter of fact, again, a friend of mine is buying those type of mobile homes, regardless of your built, typically, you know, the, you know, he’s buying them anywhere from three to $10,000. Those are typically 1976 and older builds. So they don’t retain their value, he’s actually going in, he’s remodeling them, making them like new, and then essentially selling it off to someone who wants a good looking mobile home at a discount on their land. Now, when this happens, you are essentially going to be buying a car, there’s not even escrow that you’re going to be going through in the sense of like it’s not real estate, it’s not a fixed to a piece of land. So it is only a car, you actually have to use that transaction go through that transaction with the DMV. Yeah, so it’s a whole lot different of a transaction. Now, is that still a good play or a bad play just depends on your exit strategy, right? So you need to be aware of there’s a statement of a fixture on these mobile homes. So if you find a home, or a homeowner, I should say that you’re speaking to that has a mobile home on a piece of land, verify, make sure they give you a receipt of a fixture to verify that that mobile home is actually a fixed to that piece of land. That can make a huge difference of whether you should pay $30,000 for it, or you should pay $3,000 for it. Okay. But nonetheless, what I even like about these older mobile homes on land, is the idea. Again, that means it’s a fixed is the strategy of creative financing. There are a lot of buyers out there that can’t afford to go a since the home is old, won’t be able to go get a loan, but also might not be able to afford or credit won’t afford them the ability to buy it outright. So you have the opportunity to buy it. Let’s just say you buy it for $30,000. And you can sell it to someone for $45,000 with a you know $15,000 downpayment. And you could do a seller financing to that buyer for them. Right. And now you have a totally great creative financing opportunity. You bought it for 30,000, you put $15,000 in your pocket, because that was their downpayment to buy. So you’re really only into it for $15,000. And then you created a note for the remaining 30 for let’s say 1520 or 30 years, it is a great creative financing opportunity. And as I just mentioned the beginning of this mobile homes, like the only last affordable housing out there right now. Right? And so I’m just a huge believer in mobile homes. I think there’s great opportunity in mobile homes and then let alone if you want to start talking about possibly buying mobile home parks. So a couple of few of the things that I want to review here on this episode just about mobile homes. First of all, like I said, if you’re not watching this on YouTube, go to youtube.com forward slash Justin Colby, make sure you subscribe. If you’re watching this, make sure you’re hitting the like button. Make sure you’re subscribed, make sure you turn on your notifications. So you get all the notification for all six YouTube videos. I drop each and every week. So make sure you’re liking this. Anyways, a few other things that you want to be aware of a if a mobile home is in a park. Is the mobile home affixed to the piece of land the lot, right like mine was mine is not in a park. It is in a community, right? It’s a 55 plus community. But if it is in a park, are they leasing the lot? Okay, again, because if they are that means the mobile is not a fixed that means there is a land lease if you were to quote unquote buy that mobile, which you totally could, but then you’re going to have the park lease for the lot that is sitting on. You want to be very aware of that. You know, and then again, if the home is or the mobile is 1976 or older, in someone’s asking $30,000 for it. Probably not the greatest deal right mobile homes tend to depreciate not appreciate.

So Again, if you’re dealing with one that is in a lot, it’s likely leasing the land that is sitting on, you want to confirm that you want to know how much it leases? And can you take the mobile off the lot? And if you can, are there any costs for it right? And is there any remaining term to any type of lease agreement if there is one remaining for the lot that the mobile is actually sitting on. So those are the three kind of rules of thumb, I have a friend that just went and bought like a handful like 14, I think, actual mobiles that were in a park, and they took them out of the park, and actually are going to go create their own kind of opportunity and start their own Park as a matter of fact, but they negotiated independently with the homeowners, which are the mobile homeowners. They made sure that the park did not have any remaining leases or there wasn’t a big cost to that. And they essentially bought them directly from the homeowners and took them off the lot of out of the park and created their own Park. I’m telling you guys mobiles are still in fantastic way to do real estate, they can be a little bit more unique if you’ve never done one. But you know, again, I’m a big fan, just understand the you know, top three rules which is, Is it 1976 or older? Is it a fixed to land or not? And then if you are dealing with it in the park, what is the lease for the land? Can you take it off the out of the park? etc. So hopefully this is a good episode for you guys. Hopefully you’re looking at mobile’s in a little different light. And if you guys have any mobile home parks, I have a friend that is buying them. So hit me up. Besides that, guys, go subscribe to my YouTube youtube.com forward slash Justin Colby and make sure you give me a five star rating right there on iTunes. See you guys later. Peace.


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