Creating value and making money with mobile homes inside pre-existing mobile home parks is a very real opportunity that most investors never consider.
This is also why this type of investing is so lucrative. This short article will look at eight ways to make money with mobile homes inside mobile home parks.
Disclaimer: In this article, we are discussing purchasing only the mobile homes and not the land in which the mobile home sits upon.
1. Buying and Renting
Many mobile home parks will not allow you to rent out, sublet, or sublease a mobile home you own in the park. This is because most mobile home park managers and owners don't want to deal with renters' mentality and transient nature. For this reason, most mobile home parks will require the person living inside of the mobile home to be the owner of the home.
Renting by the room: If a mobile home park allows you (as an investor) to rent out your used mobile homes, consider renting each room separately if financially advantageous. Some examples include student housing, transient/migrant housing, and/or oil worker housing.
Pro Tip: Check with local park managers to find out which parks allow renting; many will not. Parks near military bases may typically allow renting more readily than other areas of the country.
2. Buying and Selling for Cash
Seven days a week around the country there are private buyers and sellers of mobile homes making win-win transactions. Many of these buyers pay cash or arrange bank financing to purchase these used mobile homes from private sellers.
Pro Tip: As an active mobile home investor, you will want to pay much lower than the retail price for any investment home you purchase. This is partly done by clarifying your market and regularly making multiple offers to multiple sellers.
3. Buying and Selling via Payments
In many mobile home parks, a knowledgeable seller/investor may choose to sell their property through a down payment and monthly payments from a tenant-buyer. All buyers must become approved with the park directly and should also pass your background/application process. When selling via payments, an interest rate may be applied to the balance being paid.
Pro Tip: When selling via payments, make certain all paperwork and applicants meet current local and national seller financing rules and guidelines.
RELATED: Why Seller Financing Makes Sense
Similar to single-family homes, wholesaling a mobile home inside a mobile home park will allow you to create value between a buyer and seller without actually purchasing the mobile home. As an active mobile home investor, you will obtain a purchase contract on the mobile home and quickly aim to sell this contract to another investor or end-user buyer for a profit. In this scenario, a buyer is NOT paying you for the home; specifically, they are paying for your contract to purchase the mobile home.
Reality Check: In many cases, wholesaling a mobile home inside an existing mobile home park will not be extremely lucrative. You may only receive a $500 – $2,000 assignment fee for your contract in many areas. However, in some high demand areas, it is not unheard of to make over $30,000 as an assignment fee on a higher-end mobile home, depending on your acquisition/contract price. In some situations, this fee may be paid by either the buyer or the seller.
5. Bird Dogging
As an active bird-dog, you can help investors find mobile homes for sale. The act of bird-dogging mobile homes inside parks is finding and reporting all FSBO properties that fit an investor’s criteria to the active mobile home investors you already know. As an active bird-dog, you should know the exact types and criteria of mobile homes each of your mobile home investors are looking for.
Pro Tip: Ensure your investors follow up with the leads you provide them. A bird-dog is typically paid only on properties in which the investor closes.
6. Adding Homes to the Community to Resell
Many of the mobile home parks you encounter will have empty spaces or vacancies to hold more mobile homes.
Some mobile home communities will offer “incentive programs” for park-approved homeowners that are willing/able to move in a park-approved mobile home. Some park incentive programs will pay for 100% of the cost of moving in and setting up your used mobile home.
Now, let’s discuss the sellers. Some sellers will need their unwanted, used mobile homes moved off their plots of land for various reasons. These advertisements may say something like,
“Must be moved by new owner.”
When a mobile home must be removed from its current property, it should be transported by a licensed mobile home mover. These local movers can work directly with your favorite mobile home park to add/install this used mobile home into this local (or not-so-local) mobile home community. Once the home is set up with all utilities connected safely, secured, and permitted, the home may be resold or rented for a profit.
Pro Tip: When speaking to any new community manager, aim to understand any/all move-in incentive programs for future mobile homes and the age/condition/size of mobile homes the park would consider allowing you to move into the community.
7. Selling Directly to the Park
When dealing with a more expensive mobile home or double-wide mobile home (one that must be moved after purchasing), it may be attractive to re-sell the mobile home to a local mobile home park that you know is looking for more units.
When selling directly to a mobile home park, you'll want to understand what each park is looking for in a used mobile home and how much these parks are willing to pay.
If your end goal is to sell a mobile home directly to a mobile home park, make sure you clearly understand what the park is looking for and be prepared to show the park owner/manager pictures of the mobile home (inside and out) for their approval. The park will typically pay you before handling the move, permits, and set up themselves.
8. Moving Unwanted Mobile Homes from One Park to Another
If a park owner wants a mobile home removed from the community, perhaps you can help.
Occasionally, some mobile home parks will wish for the older or less attractive homes to be removed from their communities to add new homes for profit.
Traditionally, mobile home park owners want homes pulled out of the community when serious repairs are needed because of fire damage and/or simply being outdated. However, some fancy communities will want slightly-older homes removed because they are more than 10 or 20 years old.
If a mobile home still has value, moving it to another location to be re-sold or rented may be feasible. Check with local mobile home movers and your local permit office to verify the age of homes that can be moved into your area.
As you can see, there are several ways to create value as an active mobile home investor – some more realistic than others.
Keep in mind that nothing will happen without serious action and daily commitment on your part. Even though there are many ways to make money in real estate, there are countless ways to lose profits.
Have fun and take daily action to reach your financial goals. If you have questions, feel free to ask them in the forum. Plenty of active investors are around to give you help and guidance if you ask for it.