SHOULD I BUY OR RENT A MOBILE HOME LOT?

So you’re buying a mobile home and need to figure out where to put it. Should you put it on raw land? Should you rent a lot inside a manufactured home community? There’s no right or wrong answer. Except the one that’s right for you.

Financial Requirements

From a financial perspective, the mobile home park lot has less up-front cost, as it already has utilities and infrastructure (like a road, parking pad and patio). Raw land may require you to install water, sewer, electric, parking pad, etc., and that can run tens of thousands of dollars, in some cases. So the first question, when you are considering raw land, is what it will cost to make it “move-in” ready.

Hidden Costs

There can be other hidden costs when buying raw land to install your mobile home, other than what you can see. Don’t forget that you will have to have a real estate closing, and that’s going to require a title company charge, a survey, and other expenses.  Plain and simple, buying land to develop into a home site is capital intensive, and you have to be ready.

Repair & Maintenance Concerns

In a mobile home park, the park owner must provide all utilities and road repairs. You are only liable for repairs to your home. However, when you own the land, you’ll have to be ready to fix anything that breaks, such as the water line, sewer line, power line, driveway, etc. That’s all part of land ownership. So make sure that you have those numbers in our personal budget.

Location

The overriding benefit to owning your own land is that it’s in a location of your choice, and not predetermined by the location of the mobile home park. This means that you can be by the lake, or by town, or wherever you want to be and can find land for sale.  Buying your own land opens up a whole lot of freedom and options for where you end up living. And that’s worth a premium to many people. It is important to note, however, that many cities do not allow mobile homes on lots within the city limits, and mobile home parks may be the only game in town if you want to be in a certain city or school district.

Financial Considerations

When you own the land, you eventually pay it off. When you rent the lot at the mobile home park, you never own it, so the rent continues forever. However, it’s not that simple. When you pay off the land, you still have to pay the property tax and repair and maintenance.  So it’s not exactly an apples to apples comparison if you just use the park’s lot rent vs. your land payment.

Conclusion

There are millions of people who have chosen to put their mobile home inside a mobile home park. And millions more who have elected to put it on raw land. There is no right or wrong answer – only the answer that is right for your individual needs and goals.

 
By Frank Rolfe
 
Frank Rolfe is a mobile home park investor and owns over 100 parks with his partner Dave Reynolds. Frank also leads regular Mobile Home Park Investing Bootcamps through www.MobileHomeUniversity.com.

 

WHERE TO FIND CHEAP MOBILE HOMES FOR SALE

Being a good shopper is a virtue. But, to get a good price, you have to look through a lot of inventory to find that one great deal. When we say “cheap”, we are talking about buying it for less than its actual value, not buying a home of poor condition. So how do you find enough cheap mobile homes for sale to find that diamond in the rough? Here are some suggestions.

Understand that price is not the only factor

Before you begin your quest, you must first realize that there is more to buying a cheap mobile home than price alone. If you buy a mobile home for $5,000, and then have to put another $5,000 into renovations, it’s not really cheap, right? You have got to be looking at the condition of the home as part of that overall purchase price.

Find a deal, not a nightmare

There is no shortage of sellers that want to mislead you on the home’s condition, and to unload on you their home that is a total lemon. So again, you have to be proactively on your guard against the potential threat of being taken to the cleaners. Don’t get so excited about that $2,000 mobile home that you overlook the fact that it has no title, or that the frame is broken. Don’t get carried away by low price alone.

Drive through mobile home parks

One great source of cheap mobile homes is simply getting in your car and driving through mobile home parks, looking for signs in yards and windows that say “For Sale”. Make a giant list and then starting calling the owners and seeing what they are asking. And don’t take their initial claims of asking price as the true story of what they will take for the home.  Many a mobile home has been purchased from the owner for 50% or less of asking price. These people are not mobile home dealers, and they just want to get it out the door – more like a garage sale than shopping in a store.

Newspaper

Consult the advertisements in the local newspaper under “mobile homes for sale”. Again, you should find at least 10 to 100 homes at any one time in this manner. And these are just like the homes you found while driving through the parks; they are very willing sellers and highly negotiable. Some of the best deals have been things like sellers who are trying to settle an estate, or have to move immediately to take a new job. When you find a motivated seller, put on your best negotiating personality and see how low you can go.

Craigslist

Just like a newspaper, Craigslist offers a list of mobile homes for sale that you can call and try to negotiate good price on.  Remember that the key to any search for a cheap home is volume – the more deals you look at, the better your odds.

MHBay and other websites

The internet revolution has ushered in the ability to look at hundreds of mobile homes simultaneously. Go to www.MHBay.com and other websites to find potentially cheap mobile homes. On MHBay, you will also find a list of “repo” newer homes that are now in the possession of the banks, such as 21st Century Mortgage and Vanderbilt. If you are looking for a cheap newer home, these lists are essential. The only drawback to repo homes are that the sellers are not normally as aggressive at price cutting – but there are still plenty of really great deals to be found.

Conclusion

When you mine for gold, one of the most important factors is moving as much dirt through your sorter as you can, to increase the odds of finding that nugget of gold. The same is true with trying to find cheap mobile homes. If you follow these suggestions, you will have no trouble literally hundreds of mobile homes are sale immediately, and finding the ideal cheap home will not be difficult.

By Frank Rolfe

Frank Rolfe is a mobile home park investor and owns over 100 parks with his partner Dave Reynolds. Frank also leads regular Mobile Home Park Investing Bootcamps through www.MobileHomeUniversity.com.

MARKETING USED MOBILE HOMES FOR SALE BY OWNER

So you’re selling a used mobile home. Do you hire a broker? Do you do it yourself? How do  you find a buyer? In today’s world, selling a mobile home on your own is not that hard, if you know the correct steps.

Get it ready to sell

A big part of successful selling is in the advance preparation. Before you even run that first ad, you must have the home, at a minimum, ready to sell. That includes 1) yard mowed and clean of debris 2) solid stairs and/or deck to access the home 3) door that opens easily with working lock 4) house immaculately clean and smelling good 5) interior walls painted or cleaned 6) exterior painted or cleaned 7) skirting 100% installed 8) a sales contract already printed and ready to sign. The time to start work on the home is not when the first customer calls, or as you get out of the car to show them the home.

Newspaper

We have a tremendous amount of success with simple classified newspaper advertisements. You simply put your ad in both “mobile homes for sale” and “mobile homes for rent”, so that you cover all the bases. We have found that most everybody looks to the largest metro newspaper when making big-ticket purchases like homes, boats and cars.

Craigslist

This is a great resource because it not only has great traffic, but is free. You get a lot of response from Craigslist, but you also get a lot of weird calls, so be sure to screen the customers to make sure they are legitimate and not wasting your time.

MHBay and other on-line resources

This is the final stop on your marketing campaign. These websites have devoted followings with potential home buyers. The great thing about these sites is that the people who come to them are definitely real shoppers looking to buy a used mobile home so. Unlike Craigslist, there is very little wasted effort.

Be Easy to Buy From

Many sellers shoot themselves in the foot by being impossible to work with on days and times to show the homes, or refusing to negotiate effectively. Some even fail, once they have a real buyer, to timely produce the sales contract, and lose the buyer to another seller. If you are not going to be 100% committed to selling the home, then don’t bother advertising it.

Conclusion

Selling a used mobile home is not that hard. The demand has never been higher. The ability to hit millions of potential buyers has never been easier. All you have to do, to be successful, is follow the road map we just showed you, and you can be successful immediately.

By Frank Rolfe

Frank Rolfe is a mobile home park investor and owns over 100 parks with his partner Dave Reynolds. Frank also leads regular Mobile Home Park Investing Bootcamps through www.MobileHomeUniversity.com.

HOW TO PREP USED MOBILE HOMES FOR SALE

Just as important as knowing how to buy a mobile home correctly, is knowing how to sell one. There is indeed an art to maximizing value and minimizing time spent on the market. A little time and cost on the front end will yield big dividends in terms of the money you will realize upon sale.

Structural

Any good buyer will be able to spot significant repair issues. So instead of trying to hide them and losing sale after sale, it’s easier and more efficient just to fix them now and get it over with. If the plumbing leaks, fix it. If the hot water heater is broken, replace it. When a buyer finds that you have been try9ing to hide the defect they will lose trust in the deal and move on to the next.

Exterior

Make sure that the exterior is free of any rotted panels, and that everything is fastened down and straight. A fresh coat of paint will work wonders, but so will washing the exterior down with bleach. Remember that first impression is extremely important, and if the home looks bad on the outside – even if the inside is fantastic – it will be a complete turn-off for the customer.

Interior

For starters, the interior needs to be clean and smell good. This is an easy starting spot. If the interior smells of mildew or pet odors, it is unlikely that a buyer is going to come forward. You can do wonders with a plug-in air-freshener, a vacuum cleaner, some Windex and Formula 409, and some elbow grease. You will also gain immensely from painting interior walls and, if necessary, replacing carpet or vinyl. Use the “golden rule” here: would you buy the home if you were the buyer?

Detailing

Small details cost very little, but have a huge impact. Make sure that the exterior windows have shutters. These cost only around $20 a set.  Make sure the door opens and closes easily, That the lock works. That the cabinet drawers open. That the toilet flushes. These are small things that can ruin a sale, or cause a price reduction far in excess of the cost to fix them.

Conclusion

Selling a home effectively requires advance preparation. Follow these tips and you should have no problem selling your mobile home at a good price.

By Frank Rolfe

Frank Rolfe is a mobile home park investor and owns over 100 parks with his partner Dave Reynolds. Frank also leads regular Mobile Home Park Investing Bootcamps through www.MobileHomeUniversity.com.

USED MOBILE HOMES VS. NEW MOBILE HOMES: WHICH TO BUY?

A common issue with any mobile home buyer is “should I buy new or used mobile home?” There is no right or wrong answer. However, it is important that you know the facts, so that you can make an educated decision that is the right one for you and your family.

Price

Of course, the single biggest consideration is price. If the price were identical, everyone would buy new, right? So there are two key considerations: 1) how much can you afford to pay and 2) how much of a premium are you willing to pay for a “new” home?  In most areas, a new mobile home is going to cost over $30,000. If you’re budget is $10,000, then the answer is easy. However, if your budget will allow for either new or used, then the important consideration is value for your money. Obviously, you can always pay less with a used home over a new home. But there are more than price considerations.

Floorplan

New homes, in general, have better floor plans. The manufacturers have done a terrific job of improving the quality of the product, and new homes general reflect modern tastes. However, if you do not need to have the subtle improvements of floor plan – and are just happy with having the right number of bedrooms and bathrooms – then a used mobile home may be the right choice.

Finish-Out

New homes have different color choices and wall textures than older homes. To some people, this is a big deal. To others, it may be of no concern at all. At the end of the day, a white wall is a white wall. And, of course, you have the freedom – and money – to change the colors and carpets on a used home to match your tastes 100%.

Re-Sale Value

New homes always sell for more than used homes (assuming similar condition). So new homes always win the battle of maximum re-sale value. However, there is something else to consider, and that’s the depreciation from what you pay for the home. If you pay $40,000 for the new mobile home, and sell it for $30,000, then you lost $10,000, even though it sold for more than the used home that sells for $15,000 but you bought for $17,000. Rarely can new homes go up in value, but it is fairly common in used homes.

Conclusion

Buying a mobile home can be a difficult enough decision, but is even more complicated when having to decide between new and old. Make sure to cover all your bases and consider every angle before making a decision. There is no right or wrong, so the decision will be based on your individual needs and goals.

By Frank Rolfe
Frank Rolfe is a mobile home park investor and owns over 100 parks with his partner Dave Reynolds. Frank also leads regular Mobile Home Park Investing Bootcamps through www.MobileHomeUniversity.com.

TOP 10 REASONS TO BUY A MANUFACTURED HOME

There are many reasons to buy a manufactured home, but here are the Top 10 of those reasons. As you can see, a manufactured home makes a smart choice in today’s market.

Lowest cost per square foot

In a world in which traditional stick-built homes cost around $100 to $200 per foot, manufactured homes only average about $15 to $30 per square foot. That is a HUGE different – the manufactured home costs roughly 85% less! This one benefit alone should be all that it takes to convince you that manufactured homes are the way to go. Think of what you can do with the $100,000+ you are saving.

Higher quality thanks to factory controls

All of the pieces in the manufactured home are controlled and tested, in a way that traditional homes are not. In addition, they are assembled under ideal conditions in a factory, as opposed to sloppy methods in the rain out in the field, with sporadic supervision.

Little wasted space

What’s missing in the manufactured home? Nothing – just a lot of wasted space. Traditional homes have bigger hallways and more wasted space in the common areas. Why pay for the parts of the house that you don’t use?

Low maintenance

Manufactured homes are designed to be relatively problem free.  They contain a minimum of items that will break down on you, such as only one zone of air-conditioning and heating. All of the utility lines run in one central canal, so they are not affected by settling – and there’s no foundation to break.

Low repair costs

It costs only pennies to make repairs to a manufactured home compared to a stick-built. Here’s just a few examples: the roof, the foundation, water line leaks, electrical system shorts.  Each of these items would require gigantic costs in a traditional stick-built home, but cost maybe 90% less with a manufactured home. When things break in a manufactured home, it’s not a time of wondering how to pay your bills or starting to cry – you know it won’t be that much to repair.

Immediate delivery

When you want to get a custom home, it can take months from your order to delivery of the house. But with a manufactured home, the delivery time is days or weeks. That’s because building a home in a factory is so much more efficient, and does not depend on such factors as the weather.

 

No unhappy surprises

There’s no greater certainty then buying something that you can see, touch and feel. And when you buy a manufactured home that has not yet been built, you are able to walk through the exact model you will be purchasing. When you order a new stick-built home to be built, you have absolutely no idea how it will end up looking, and the end result is often not want you wanted at all. And the return policy on the stick-built home? None. Would you buy a car you could not test drive first? You can go to a dealer for Clayton, Fleetwood, and other manufacturers in one afternoon.

Freedom of choice and bidding

When you buy a manufactured home, you have the freedom to choose between a number of different manufacturers and often compare their bids. Stick-built homes are not nearly so easy to compare and negotiate, and you have no choice of what builder can be on your lot – you can only choose between different subdivisions, not builders.

Low utility costs

Because manufactured homes have less wasted space than stick-built homes, they deliver the square footage you need in a compact size. One of the key benefits is lower heating and cooling costs. This extra monthly savings can be applied to your mortgage payment or things you’d rather spend your money on.

Lifestyle

Manufactured homes offer a carefree lifestyle that allows you to focus your time on what you like to do, rather than be a slave to your home and property. The “country” setting of most manufactured home communities is like being on vacation 24/7, and the homes are low maintenance. For many people – even more than the low cost – the lifestyle is the biggest selling point.

Conclusion

Each of these Top 10 reasons is a powerful enough argument to make you want to buy a manufactured home. But when added together, the choice is clear. Manufactured homes offer the best selection for your money, time and happiness. 

By Frank Rolfe
Frank Rolfe is a mobile home park investor and owns over 100 parks with his partner Dave Reynolds. Frank also leads regular Mobile Home Park Investing Bootcamps through the MobileHomeUniversity.com.

WHAT TO LOOK FOR WHEN BUYING A USED MOBILE HOME

There is no better feeling than finding a good deal on a used manufactured home. You can save thousands of dollars, and often buy more home for your money than you were expecting. But to come away from purchasing a used home with a smile, it is important that you know what differentiates a “good” deal from a “bad” deal. So here’s a list of the most important items to watch out for when selecting a used manufactured home to buy.

Exterior in good order

What I mean by this is that the exterior shows no sign of rotting or detaching. You rarely see this problem except when the exterior is made of T-111, which is an artificial wood product that has proven to have extreme inability to withstand moisture. Metal, vinyl, modern concrete-based imitation wood – these are all fine in 99% of the cases. But T-111 is found to be lacking most of the time. Better to avoid it unless it is in perfect condition, as it might cause you to have to re-side the entire home.

Frame straight

This can only be observed when the home is up on wheels,  but you will sometimes see homes that are ready to transport but have a “bow” in the frame. This is a problem, not only for transport, but for leveling and longevity.

No signs of water leakage

Nothing destroys a manufactured home faster than moisture. It will rot the walls and floors, and can potentially lead to black mold. So beware of homes that have water stains on the ceilings, or any signs of rot around windows or doors.

Solid floors

Floors take a lot of beating in a manufactured home, and there are other sources of problems besides moisture than can take their toll. Replacing floors is dirty business, and can require replacement of the entire carpet or other flooring in the room. So walk the home from one end to another and see if you detect any weak spots in the floor.

Floor plan

Many older homes have floor plans that are not in keeping with modern tastes. So see if the floor plan is one that you like. Remember that you can’t really change it, so if it is not perfect, you might want to wait for a different home.

Quality of finish out

Different manufacturers and models have different levels of finish out. Just because it is a Clayton Home or a Fleetwood Home – or any other brand – does not mean that it has the same finish-out as the home you saw a couple days ago. All manufacturers have different price levels of models, and the fittings and cabinetry vary based on the price of that model. See if the way the home is detailed out is what you desire. It is very expensive to change the aesthetics of the home later.

Gas vs. all-electric

Do you want a home that’s got gas and electric, or do you want one that’s all-electric? In many northern climates, customers prefer to heat with natural gas as it is normally less expensive. So think through what you want to power the home with, and make sure that’s how the home was designed to be heated.

Room sizes

One of the big design changes over the years in manufactured homes has been the size of the bedrooms – especially the master bedroom. Make sure that the home you are looking at has a room size that will accommodate your furniture and lifestyle. Since you will spend probably 10 hours per day in the bedroom, it better be what you want.

HUD seal

This is an extremely important item – and one that many people do not know about. All manufactured homes began carrying a HUD seal starting around 1976. This seal demonstrates that the home was built based on the standards of the U.S. Government. Without this seal, the home may not be able to be moved into a manufactured home community in many cities. So make sure that the used home has a HUD seal to save yourself from problems down the road. The seal is normally located on the left, rear of the home (but can also be found sometimes in the hot water closet and even under the sink in the kitchen).

Conclusion

Everyone likes a good deal. So make sure that you are buying one. This list will keep you out of trouble, and set you on the path to buying the home of your dreams – at a bargain price!

By Frank Rolfe
Frank Rolfe is a mobile home park investor and owns over 100 parks with his partner Dave Reynolds. Frank also leads regular Mobile Home Park Investing Bootcamps through the MobileHomeUniversity.com.

HOW TO NEGOTIATE THE PURCHASE OF A NEW OR USED MOBILE HOME

You can read all the books that you can find on negotiating at your local book store – and you’ll find that none of those work in the real world. Negotiating the purchase of a manufactured home requires some special preparation, and the end result of that advance work is what will allow you to get the price you want , not trying to copy Donald Trump’s acumen at “take it or leave it” diplomacy.

Many sellers don’t take well to threats

The type of negotiation that is used in many books on the subject is called “win/lose”. This is based upon a threat to the seller that “if you don’t take my offer, then I’m out of here”. When presented in this manner, most sellers become defensive and their primary instinct is to tell you to get lost. This type of negotiation posture is only really effective when the seller has no other options – but, of course, in this case they do.

Use the sheer volume of the competitive market as your weapon

A better negotiating style is “win/win”, in which both the seller and the buyer have mutual benefit and both get a fair deal. This is the best method to approach the seller. And to show the seller the benefit he will receive from the sale, the key is to overwhelm them with the competitive forces of the market. Tell the seller that you are looking at over 1,000 homes on-line, all that meet your criteria. Tell them that you have the money to close, and will take the first deal that is compelling. Now the pressure is on them to prove to you that they should be the manufactured home that is selected.

Know everything about values

Another key to proper negotiation is to know absolutely everything about market values on new and used mobile homes for sale.  When a seller tells you something wrong, tell them “there are actually nine homes of this same make and model priced at 20% less than that, and I can email you the information on them to prove it to you”. In case after case, the buyer who best knows current values is going to drive the best bargain, and convince the seller of the correct pricing.

Play effective mind games

Despite the win/win negotiation model, there are practical mind games that should be used in negotiation. One is to never appear too anxious. That will send a signal to the seller that they don’t need to make any further price concessions. Also, if the seller won’t accept your price, feel free to walk away from the deal and see if they call you to try and get the negotiation on-track again.

Never get personally attached to any home

No matter what style of negotiation you use to purchase a new or used mobile home, you should never get personally attached to any one home. The key to this business is volume, and you lose that weapon when you narrow the field of acceptable homes to just one. Just because a home has a certain stained glass window in the cabinet does not make it the “perfect” home. You can always add such decorative items into any home for a price. Treat every home as just one of many, and don’t get personally involved in it – that will ruin your ability to negotiate effectively.

Conclusion

Negotiating is an important skill. Buying a new or used manufactured home – and feeling good about it – requires you to drive the hardest bargain you can. Use these negotiation tips to help you get the new or used mobile home of your dreams, at the lowest cost possible. It’s not as hard as it looks.

By Frank Rolfe
Frank Rolfe is a mobile home park investor and owns over 100 parks with his partner Dave Reynolds. Frank also leads regular Mobile Home Park Investing Bootcamps through the MobileHomeUniversity.com.

WHY THE BEST PLACE TO FIND A NEW OR USED MOBILE HOME IS ON-LINE

WHY THE BEST PLACE TO FIND A NEW OR USED MOBILE HOME IS ON-LINE

So you’re looking for a used mobile home or a new mobile home. You want a real deal – one that is a great home at a low price. So how do you find that deal? There are several options. But, by far, the best  method is shopping on your computer. Here are some reasons why on-line is the correct strategy in finding the ideal used mobile home.

Biggest selection

It’s a no-brainer that nobody can compete with the internet as far as selection. Anyone looking for new or used mobile homes can, within seconds, have access to literally thousands of listings. Compare that to dropping by a mobile home dealer and seeing maybe 20 models, or combing the newspaper and maybe finding 50 options. In a world in which volume is king, no other source can yield the amount of potential targets that the internet can.

Saves a ton of time

If you have to go out and get in your car to look at a manufactured home for sale, here’s what happens: you burn about $50 of gasoline and lose about an afternoon of your time. But, even worse, you probably have to go out and look at 100 to find the one that you want, so your investment in time and gasoline becomes crushing. Even worse, what if you don’t find the right one after all that time and money wasted? With the internet, you don’t have to go anywhere or invest any money is gas, and you can look at new and used mobile homes while in the air-conditioned splendor of your favorite chair, drink in hand.

Better pricing

Since sellers know that they are competing with a huge volume of other sellers, they tend to put their best and final price on the internet, while sticking to a higher price on newspaper or other ads. As a result, the internet always offers the best pricing. It’s no different than the price differential you’ll find on autotrader.com versus the car dealerships. The internet tends to make all sellers honest – and aggressive.

Easier to negotiate

There’s a trick in negotiation that you, as a seller, have a better chance of getting what you want if you make the buyer waste a ton of time looking at what you have to sell, because they then have so much time and money invested that they hate to go home with nothing to show for their labor. The same is true with shopping for manufactured homes. You hold all the cards when negotiating on-line, as you have nothing invested and the freedom to contact as many sellers as you want at the push of a button.

Conclusion

Buying a new or used mobile home has never been easier, thanks to the internet.  In only a few minutes on line, you can shop from thousands of mobile homes and find the home that’s ideal for you, and then negotiate a terrific price. You simply can’t beat the deals available on-line for manufactured homes. Check it out today!

By Frank Rolfe
Frank Rolfe is a mobile home park investor and owns over 100 parks with his partner Dave Reynolds. Frank also leads regular Mobile Home Park Investing Bootcamps through the MobileHomeUniversity.com.

 

Mobile Home Investing: What Savvy Investors Need to Know

There are over 60,000,000 Americans with household incomes under $20,000 per year. To this giant market, a mobile home is the only form of detached housing that they will ever be able to afford. And, as a result, the demand for mobile homes has never been higher. But how can you take advantage of this opportunity?

The Basics of Affordable Housing

Before you can begin to invest in mobile homes, you must first understand your customer. For those families with household incomes under $20,000 per year – using the government’s own ratio of housing cost to income of 33% – their housing budget is around $500 per month. At the same time, the average cost of an apartment in the U.S. in 2010 was around $1,030 per month. The point is that this market segment is extremely thankful to find something that they can afford, and is not very discriminating on the quality of the product. They are looking for basic shelter – literally a roof over their head, a solid floor, running water and sewer, and heat in the winter. These customers are not expecting fine carpets, hardwood floors, upscale cabinetry. As a result, a successful investor in mobile homes will not focus on providing more than the basics. That is not to say that the home should not be clean and attractive. But the American obsession with upscale bathrooms and kitchens has no place in affordable housing.

And before you think that this customer is different than you and me, look around you. If you earn $10 per hour or less, you are in this segment. And that is a giant pool of jobs in America today. Almost everyone who works at the grocery store, McDonald’s – everywhere you go – earns in this range. And as America’s economy continues to decline, this number grows.

Why Mobile Homes Are The Answer to Affordable Housing

Mobile homes are the lowest cost form of detached housing to build. It costs less than $30 per square foot to build a mobile home, as opposed to around $100 for a stick-built home. And used homes often sell in the area of $10 to $15 per square foot. HUD has controlled the construction standards of mobile homes since the 1970s, with the goal of keeping costs at a minimum. If there’s been a way to shave costs, it’s been done.

The other key is the quality of life that a mobile home can provide the resident as compared to other inexpensive housing options. Unlike an apartment, the customer has nobody banging on their walls or ceiling. They have a yard. They can have a pet. Basically, mobile homes allow residents to have self-respect, and a “neighborhood” feel that supports a healthy lifestyle.

Why Mobile Homes Are Easy To Renovate

Mobile homes have some unusual attributes that other forms of housing do not share. One is that they have no permanent foundation. A mobile home’s foundation is nothing more than a steel chassis, to which the wooden floor is attached. There are so slabs and no piers – nothing expensive to settle or crack. Leveling a mobile home costs in the hundreds compared to a stick-built home’s thousands. All utilities run in a common “trough” as opposed to the myriad of wires and pipes in a stick-built home. This makes it easy to locate and repair the water, sewer and electric pipes and lines.

One of the most unusual components of a mobile home is the fact that none of the walls are load-bearing. A mobile home is structurally similar to a shoe box – the walls and roof are the only components needed to make it stand up. This gives you much more freedom in renovations, as virtually all internal walls are simply cosmetic.

An Unbelievable Amount of Demand

If the U.S. is in a recession, you would never know it if you run an ad for a mobile home for sale or rent. Even in a small market, you should receive 30 to 50 calls a week in response to your ad. At a mobile home park in Pueblo, Colorado recently, the number of calls exceeded 150 in one week. Why all the calls? Because there is a huge, unsatisfied demand for affordable housing. But that’s not the whole story. The other cause of the giant demand is the poor quality of traditional apartment offerings. Have you seen an affordable housing apartment complex recently? Anyone who thinks that mobile home parks are unattractive has not visited apartments. The true crime center of most cities today are the lower-income apartment developments, with drug dealers standing out in front and prostitutes, gangs and drug addicts living inside. This is a horrible environment for any family or individual to live in, and many buyers and renters of mobile homes are fleeing from these terrible situations. In fact, most cities now view aging apartment complexes as their #1 problem – not trailer parks.

Healthy Numbers

Mobile homes are an attractive investment due to very attractive numbers. Essentially, it is easy to sell a mobile home for much more than you paid for it. A mobile home that you buy and renovate for $8,000 can be sold for $15,000 and a home that costs $12,000 can be sold for $30,000. You can buy them relatively cheaply because most people do not want to invest in this asset type. At the same time, there is a huge supply/demand gap, so you can price them high without much competition. The important fundamental – and the one that needs to be your guide in every decision you make – is to stick with the business model of affordable housing. You have to construct the monthly payment , including mobile home park lot rent, to not exceed around $500 per month. This is what the customer can afford. If you place the consumer in a position of having a bigger monthly obligation than they can afford – as was just demonstrated in the sub-prime mortgage meltdown – you will end up in endless defaults. This serves no one, as you are constantly having to clean and re-sell the home and your customers are denied the affordable housing, and long term benefit, that they are searching for.

Gaining Knowledge In This Niche

There are two websites that contain a large amount of information on this investment sector. One is www.Mobilehomeparkstore.com and the other is www.MHBay.com which together make up the largest portfolio of websites for the industry. There is also a new site that contains a vast assortment of articles and tips on investing in mobile homes at www.Mobilehomer.com.

Conclusion

Affordable housing is going to be one of the key investment sectors in real estate in the coming years. Get in now, on the ground floor. You can obtain spectacular returns and — equally important — provide nice housing to hard-working Americans who need it badly. This is a giant market, and one that you will be hearing a lot more about in the future.

By Frank Rolfe
Frank Rolfe is a mobile home park investor and owns over 100 parks with his partner Dave Reynolds. Frank also leads regular Mobile Home Park Investing Bootcamps through the MobileHomeUniversity.com.