Used Mobile Home Investment

How To Select A MH Park For Your Used Mobile Home Investment

There are a lot of Mobile Home Parks that will have the type of home your looking for. However, not all parks are friendly to someone wanting a used mobile home investment.

First we'll review what a good used mobile home investment is and then explore the the criteria for choosing the right park.

Used Mobile Home Investment Guidelines

Our goal is to find a very inexpensive home, in an existing mobile home park, that we can buy for all cash. Then do as little work as possible to it, and resell it with owner financing. We get some of our initial investment back by getting a down payment from the retail buyer. The bigger the margin between what we pay and what we sell it for, the better.

We have to manage our costs to keep our profits margins high. The top budget busters are repair costs and lot rents. We'll cover repairs in another article. For now we'll look at lots rents and our relationship with the park manager and owner.

Relationships, The First Key To Used Mobile Home Investment Success

The Mobile Home Park Manager and Park Owner hold the keys to the Kingdom. The park owner's goal is to have income from each lot in their park. And a vacant home does not produce income. This motivates park owners to get it occupied. And there is generally an ongoing turnover in parks so they are always managing occupancy. The good news is that some parks will work with investors.

First we need to know if they are open and friendly to investors. Stop at the office and visit with the manager. Our first goal is to find out if they will allow us to make a used mobile home investment in their park. This will make or break the deal. If the answer is yes, then we want to know if they will agree to forgive the lot rent while the home is being sold. If not, move on to another park.

Second, find out if you like the manager and owner. They passed you first test and will let you invest in their park. But not so fast. Don't jump on this deal yet. We're going to invest in this park and be involved with the ownership and management for several years. It's important to get to know, like. and trust them. And for them to feel the same way about you. Hang around the park, get to know them and ask smart questions. I'll expand on this in more detail in another article.

Concessions, The Second Key To Used Mobile Home Investment Success

We've established that the park allows investors and will forgive the lot rent while we have it on the market. We're building a relationship and thinking about what comes next. From personal experience I'd say that you need to consider what will happen if you have to repo the home? And what if the new buyers have a violation of the park rules? Or they get behind on the lot rent? The park knows that you have a lien on the property and will ultimately come back to you to make it right.

Before you make you first used mobile home investment in the park, get them to agree that you will not be responsible for lot rent if the home is repossessed. That they will get lot rent when you resell it. I did not do this early in my career and it cost me a lot of money. Now I will not invest in a park otherwise.

Why? When you get a home back you will incur the expenses to clean, repair and resell it. Plus any repo cost and re-titling fees. Any expenses cut into you margins. And $200 - $300 per month will do it fast. Run, don't walk away from this park if they do not agree.

Support For Your Used Mobile Home Investment

Your relationships and the concessions will make or break you in any park. Stay away from institutional parks because you cannot build a personal relationship with a corporation. And if you aspire to eventually own a park you can learn a lot about the business through the manager and owner.

They also know what homes sell for and what the average down payment is. We will explore this in depth in another article. In the mean time, go make an informed used mobile home investment.