My partners and I just purchased our fourth mobile home in the past two months…
This one is a 3 bedroom, 2 bath double-wide in the same park as our first mobile home. It’s about 10 years old and in very good condition. It needs some patching on a small part of the roof, and has a lot of trash inside, but it shouldn’t cost us more than $300 for all the work.
The home was a bank-owned foreclosure (as all our MHs have been), and we paid $1500 for it. It was actually part of the group of REOs that we had been negotiating last week. We think we already have a buyer for it — he filled out an application at the park today, and is waiting to be approved. We would likely sell it for between $4000-4500.
As for MH #3, we’re pretty sure we have a buyer for that one too…turns out it was in a great park, and we received a number of calls from some very eager buyers. Hopefully we’ll have that one sold in the next few days as well…
Before you purchase these MH’s do you need to speak with the park manager ahead of time to make sure you will be able to buy and do you explain to him your plan to buy and then flip with owner financing?
And can these park managers give you past sold’s so that you can try to come up with a value of your MH?
Hey Rob –
We always talk to the park manager before we buy, for a couple reasons:
1. We try to get reduced lot rent for the time that we’re holding the property. Because parks are generally happy that we’re agreeing to keep the home in their park, and because they know we’re actively looking for a buyer (so they don’t have to), they often agree to give us reduced — or even free — lot rent for the first month or two.
2. We let them know our business model, and make sure they are okay with us buying and selling in their park. While they technically probably couldn’t stop us, we want to have good relationships with the parks, and probably wouldn’t work in a park where we weren’t wanted.
3. We want to find out the criteria for buyers to be allowed to live in the park. This will help us to find our buyers.
4. We ask the park manager to help us find buyers for the homes in the park, and we offer them a bonus (generally $200-500) if they find us a buyer.
As for finding values, we haven’t found a good comp model for mobile homes. It’s really whatever the ability is for your new buyer to pay and the number of months they’re willing to pay the note. We’ve found that most buyers don’t care about price…all they care about is how much they need to pay each month and how many months they need to pay. If those numbers work out for them, they don’t care if they’re paying $2000 or $5000…