In today’s Mobile Home Investing Podcast episode #27, I’m very proud to welcome active mobile home investor George to the co-hosting microphone. In today’s 34-minute podcast episode we dive into a few of George’s mobile home deals, helpful tips, and what to do when dealing with a park that forbids you to resell for monthly payments.
I am super proud of everything George has accomplished in such a short period of time. In only 18 months George has already been able to help multiple families purchase safe manufactured homes that they otherwise would not have been able to own so quickly. These buyers pay George every month to one-day own their manufactured homes free-and-clear in the future.
Special thank you to George for being so candid in today’s Podcast in order to help other investors he’ll likely never know.
What would you do? Scenario #1 (Podcast topic)
Main Objection: The mobile home park manager is happy to have you in the community investing/rehabbing individual mobile homes. However the manager requests you sell any mobile home to an all-cash or bank financed buyer. No seller financing allowed in this park.
The possible deal: 1999 single-wide manufactured home inside of a preexisting park. Negotiated price $3,000. Rehab costs under $5,000. Lot rent less than $600/mo. Resale value via all-cash $30,000+. Resale value via monthly payments $50,000+.
What would you do?
✔ A. Pass on the opportunity. This is absolutely your safest option. However if experienced, this may not be the best path forward if there is significant value to be created by helping the seller and a buyer. Do pass if this deal is your first mobile home investment.
✔ B. Sell to an all-cash or bank financed buyer. This may be wise. In George’s audio Podcast below, he mentions that this particularly by-the-book mobile home park manager kept denying his all-cash buyers. This prompted George to then agree to sell to a payment-buyer as described below.
✔ C. Sell to a low-risk monthly-payment buyer under the park’s radar. This may be wise if experienced and selling for cash is not a profitable option. There are certainly do’s and don’ts if you plan to not completely adhere to the park’s rules. Listen to the audio Podcast #27 below for a detailed explanation of what this may look like in your business.
The Risk? If the park manager were to find out that you are selling via payments, he/she may: 1.) ask you to remove the lien from the Title (likely), 2.) change his/her mind and allow you to sell via payments (less likely), or 3.) begin the process to evict you and the home. Eviction is less likely as the tenant-buyers are paying lot rent on-time and the manager may not want to disrupt that regular payment. Additionally, eviction is not very likely in this situation unless the park specifically wants this mobile home for themselves or feels vindictive and is punishing you.
In the audio Podcast episode below John and George cover:
- 2:13 How long have you been investing in mobile homes?
- 2:49 Tell us about your least profitable mobile home investment to date?
- 4:24 How long did this deal take to sell to low-risk end-users? Why?
- 5:49 How long have your other mobile homes taken to sell to low-risk end-users?
- 6:25 Tell us about your most profitable mobile home investment to date?
- 7:15 Why would a seller sell to you for $3,000 versus selling to someone else for $45,000?
- 11:24 How’s your experience been selling via payments inside parks that don’t want you to sell via payments?
- 17:04 What size down payments did you collect on both of these mobile homes?
- 17:51 Who pays the park each month for the lot rent?
- 19:15 Did the park manager need to see proof the home has been sold? What proof?
- 23:01 Have all your monthly payment tenant-buyers been paying on-time to date?
- 23:16 What is your protocol if you take one of these mobile homes back in this strict park?
- 24:42 Sometimes bad things happen to good people.
- 28:16 How many parks will not allow seller held financing or liens within their walls?
- 29:14 George discusses his mindset when helping families own homes, they would not otherwise be able to afford.
- 32:25 What advice would you give to other investors looking to build cash-flow?
What would you do? Scenario #2 (video topic)
Main Objection: The mobile home park manager does not want any investors in the mobile home community, period.
The possible deal: 1999 single-wide manufactured home inside a preexisting park. Negotiated price $3,000. Rehab costs under $5,000. Lot rent under $600/mo. Resale value via all-cash $30,000+. Resale value via monthly payments $50,000+.
What would you do?
✔ A. Pass on the opportunity. This may be wise if new or experienced.
✔ B. Wholesale or broker the mobile home for a $2,000-$10,000 profit. This may be wise if experienced. Possibly wholesale or bird-dog this opportunity to another investor or end-user. Only arrange a brokering-type-situation with a seller if you are a licensed broker within the state. Ideally you know local mobile home prices and what cash-buyers are paying in this community. This strategy would allow you to help a seller while still creating smaller profit (assuming an all-cash or bank financed buyer can be found in a timely manner).
✔ C. Partner with the seller, put your name on Title (ownership), repair the mobile home, quickly resell to an all-cash buyer, and split the profits with seller. This may be wise if experienced. This strategy requires a meeting of the minds, written agreements, action, and a clear process moving forward. Typically repairs may be needed and lot rent must be paid monthly. Make sure to be compensated 100% of your invested capital before splitting profits with the original owner/seller.
✔ D. Ignore the park manager’s wishes altogether and invest/buy/sell this mobile home within the community. If you are fast you may try to resell for cash without the manager knowing. Try not to do this. You potentially risk the park manager evicting you from the park. Some park managers are friendlier and/or more forgiving than others. Please watch the video below with regards to Scenario #2.
Bonus: 4 Reasons some park managers may not want you inside the park & how to change that.
The vast majority of mobile home community managers are willing to work with local, helpful, goal-oriented, knowledgeable investors. To most park managers we are free-help. However there are some parks/park managers around the country that may not be willing to work with you immediately. At first these managers may simply say, “we do not allow these activities inside our community”. Aim to press these managers further to find out the specific reason (1, 2, 3, or 4 below) why these managers do not want you in their community. Some of these manager objections are possible to overcome.
Park managers oftentimes have very thankless jobs. Every day people talk behind their backs and lie to their faces. When you can present yourself as knowledgeable, sincere, humble and proactive, many park managers will work with you if possible.
Objection #1. Corporate policy.
After you explain why you are in the mobile home park and how you intend to help, a park manager may explain to you that you are not allowed to buy and sell within the community because of a corporate policy. Very few mobile home communities have instilled a corporate policy that forbids anyone from purchasing and reselling a home.
While we investors do not like this type of corporate policy, we certainly respect the park’s decision. We can still thank the park managers for their time and ask for them to point us in the direction of any local mobile home parks that may be more helpful. To these managers we may also offer to wholesale/sell used mobile homes homes to help fill their park, and also removed any unwanted homes for free that the park wishes to remove.
Pro Tip: If a corporation owns multiple mobile home parks in your town, do not incorrectly assume that because one park manager will not allow you there that every park owned by this same company feels the same way. Some park managers use the corporate policy excuse as a way to get rid of local investors without any arguments. You are highly encouraged to make contact and introduce yourself to every local park manager in and around your area.
Moving forward: This objection is difficult to overcome. If the park does not want you there, then you do not wish to be there either. In your area there are likely many other communities to help.
Objection #2. You’re competition.
A minority of mobile home parks employ their own sales teams, full-time handymen, landscapers, and/or rehab crews within the community. These handy folks are typically in charge of repairing any vacant or abandoned mobile homes within the park. Once these homes are repaired, the park may then rent or resell these homes for a profit.
Typically in high-demand seller-markets mobile home park owners are more aware that repairing and reselling their vacant mobile homes will lead to a quick profit. Keep in mind that a vast majority of parks will still mainly create their revenue solely from renting home-spaces monthly and not rehabbing/reselling used mobile homes.
Parks aggressively buying homes: Some mobile home parks try to purchase and vulture every single mobile home they can from every seller/resident within their walls. Some parks may have a first-right-of-refusal to make sure they can purchase every mobile home (before an end-user can purchase it) within their community. Very few unethical parks harass their residents, make it nearly impossible for their residents to sell, continually deny buyers, and force s...
