Hi, this is Robert Woodruff with North American Real Estate Investors. What I’m going to do is discuss the 10 most frequently asked questions about mobile home investing. We are going to cover the 10 most important questions you should be asking but you may not know to ask these questions yet. Hang in there. Fasten your seats. Let’s get started.
1. What is a mobile home good for?
Why would we buy these things? They’re these things that people live in??? Do people actually want to live in a mobile home?? They’re undesirable right?? Aren’t the mobile homes often in bad neighborhoods? I wouldn’t want to live there myself so why would I want to buy one? Well here’s the answer. Mobile homes are good for cash flow. I know everybody that gets started in real estate investing often try to do flipping because they want these big paychecks but the big paychecks, they come and they go. Reality television makes lots of money off showcasing how easy and fun rehabbing a home can be. However, cash flow doesn’t go anywhere, it stays there for a long time and it’s the way you obtain your financial freedom. So the more cash flow, the more mobile home investments you have, the more assets you acquire means the more post office paychecks you’re going to have coming in. Imagine having to go to your post office every month for your paycheck. So, that’s why mobile homes can be a good investment and not just something to disregard in your investment portfolio, you invest in mobile homes for the cash flow alone.
2. Do I need money to get started?
No. You do not need money to get started in mobile home investing. This is the biggest myth ever and some of the worst talk you can hear from some of your peers or your family is that you need to have money to make money. That’s a self-defeating prophecy.
This is False!!!!!
If you do not have time to invest in learning how to make cash off real estate investing then you will need money…. But, if you are sitting on a large savings account then you just need to put more time and effort on your part to make investing profitable for you. Put forth a little bit of effort to go out and find some deals, wholesale some deals, help out sellers, find some motivated sellers who need help and pocket thousands of dollars. Take that money and put it into your assets and keep doing the same thing over, over and over again until you have enough to acquire your financial freedom. Easy enough, right??? If you are laughing just keep reading and learning.
3. Do I need a dealer’s license to be a mobile home investor?
No. No you do not. Now if you ask a dealer this they’ll say yes. Yes you do, why do they say this? Just like if you ask a realtor if wholesaling properties is okay, they might say its illegal, because without a realtor they make no money. You do not need a dealer’s license to be a mobile home investor. Now if you’re selling, or flipping a certain amount of mobile homes every year you’re going to qualify for needing to get your dealer’s license but if you’re just dealing the properties or using them as rentals you need not have your dealer’s license.
4. Can I rent mobile homes in a mobile home parks?
Yes you can, But this is the number one mistake I see mobile home investors do is that they will pick up the phone and call all the mobile home parks in their area and t say, “Can I rent a mobile home in your park?” You know what they’re going to say? “No because I don’t want the problems of you coming into my park and doing a rental agreement with somebody and then your tenant thinking what’s in your rental agreement is more important than what is in my lot agreement. You understand? That causes problems. So just by picking up the phone and calling around asking everybody if you can rent in their park shows that you do not know what you are doing. Do not do that. Do not make this newbie mistake. Can you rent in parks? Yes. If they tell you that you can rent in their park go ahead. Just don’t ask them. Rule of thumb, don’t ask them. However, be smart enough to read the parks contract on lot rent and mobile home usage within their park.
5. Will a mobile home appreciate in value?
Well the Manufacturing Housing Institute says yes. I say no, not at all. The longer you own a mobile home the less its worth until eventually one day it’s going to be worth very little. That’s going to be the maximum value that you can get for the home in your area. Now other than that can they appreciate? In theory, well if there is mobile home parks in Florida where mobile home junkers go for $10,000 a piece but yet there’s mobile home parks in South Carolina where the mobile homes go for $500 or even free, so obviously there’s a difference in value being the different areas. So now all of a sudden if South Carolina real estate switched to be like Florida real estate well in theory then a mobile home could appreciate but does a mobile home appreciate? Generally, no. However, if you have read the first part of this post then you already realize that appreciation is not what you are striving for with mobile homes.
6. Should I buy a mobile home that needs to be moved?
Generally, no. You don’t want to do that because if you have to buy a mobile home and then it has to be moved, then you are now paying the amount to purchase the mobile home and also paying for the mobile home to be moved. You really do not want to do that. This extra expense could make your numbers go into the red. You will be adding all that extra expense into the purchase price of your mobile home. So what does this mean?? Well, what that means is that it is now going to take twice as long to get all your money back that you have invested into your mobile home. Do you want to wait 2-3 years before you actually make a buck or do you want to make it now? Do you want to do it in 6 months or 12 months, me I prefer 6 months so I try not to move mobile homes.
Now in my system “The Keys to Cash Flow”, I teach you how to get a mobile home moved for free. That’s right, for free. I show you how you can still go out and buy a mobile home that needs to be moved and use a different strategy where somebody else will be paying to move it instead of you. Yes, there are ways that you can buy a mobile home if it has to be moved and still make it into a deal. Just remember that the rule of thumb is that if you’re going to go out and buy a mobile home that has to be moved, it is going to increase the cost of the asset and delay your profits.
7. What kind of financing is available?
Generally, not much and usually none is available. No bank or finance company wants to finance mobile homes. When you get a whole bunch of mobile homes and you go into the bank and you say, “Well I’ve got a bunch of these mobile homes that I’m going to use as collateral towards something else.” No, the banks will not use them as collateral. Really a mobile home, is really only worth how much money it is getting in every single month or how much money it can be wholesaled or flipped for. So that’s the true value of the property, how much money does it get monthly and beyond that the banks really do not care how much it is worth. It is a mobile home. It’s a wobbly box. That’s the way they look at it. Banks will not refinance them and a lot of them have a hard time even giving you financing on them. If you go into a mortgage officer they are not going to be able to do a loan for you. Some try to go to a branch bank and they might do a loan for you or there is actually a smarter route out there called private moneylenders. Now when you start getting involved in being a mobile home investor other investors see what you are doing and they will say, “Wow, there’s some really big numbers there. Why don’t you let me give you the cash to go ahead and fix that deal and put some money in it.” Well that all works out great. You give them a better interest rate than they can get any place else bar none and still have a great deal on your hands. If you can give someone clear up to 15% on a 12-month or even a 3-month then that’s amazing. Now imagine if you had your deal with them where they were making 15% every 3 months imagine if you have that with them for a full 12 months that could be up to a 60% return per year. Who offers that? This makes it a win win situation for private moneylenders and for the average investor to make monthly cash flow off a small investment.
8. Singlewides or doublewides?
Singlewides!! Doublewides are double the expense. You think, “Oh, if it’s a double wide is it going to be double the amount of money I get each month for it?” Nope, not really. Often what’s going to happen is doublewides are going to have a mortgage payment on them. So every month there is nobody paying you rent, you will still have to pay a note to someone. This stops the benefits of investing in mobile homes as the benefit is the large monthly rent and the money you can make flipping the homes. If you are constantly making a payment on a large note then you might as well invest in a single family home where you will get equity. Stay away from doublewides in mobile home parks; they are not good investments and do not produce enough cash to invest in them.
9. Can I buy mobile homes, no money down?
Absolutely. Here’s the neat thing about mobile home investing is that there are people out there that are having really big problems and very motivated to sell. Maybe they have to move out of state, maybe they have got behind on their payments, maybe they have to sell it immediately and they have to move someplace else. Whatever reason they have, they are now motivated sellers. Now, even with a percentage of our population living in mobile homes and being motivated to sell you still do not see realtors fighting over mobile home listings. Most of the time the motivated seller’s only choice is to go to the dealer and see if the dealer will take it back and do you think they are? No. No of course they are not, so here’s what happens, it either sits there and it gets taken back by the bank or they try to rent it out to a family member who will end up shagging the place out or you know just a number of negative things that will happen there. So really the only help that they have is you and I. We are the only ones that will cater to this population. We are the only ones that will help them. So you can make a lot of money just solving someone’s problems by buying mobile homes, no money down.
10. How old should the mobile homes be?
Well, I spoke earlier that we don’t want this huge bill looming over our heads because the longer it takes us to pay off the mobile home the longer it’s going to take for us to actually get any money off the deal. Generally, you want a home that’s really close to being paid off or is already paid off so that you can start reaping cash flow off the property immediately. So what you’re looking for is probably 15,20 year old mobile homes but of course we said no doublewides so keep it to singlewides and that is your honey hole properties.
Join me December 29,2016 as I discuss “How To Find Killer Deals” with special guest, Stephanie Woodruff.
This Webinar will be focused on finding motivated sellers of single family home, mobile homes, and multifamily properties. Stephanie invests in assisted livings and has found all her investments thought the techniques we will be discussing on the webinar. These techniques for finding motivated sellers can be used for houses, mobiles, and commercial businesses.
Join me in January 2017 in South Carolina and Florida as I do live training events on “51 Ways to Find Motivated Sellers”