Money From Mobile Homes

Money From Mobile Homes

Considering the economy and a reluctance of banks to lend money to investors I will present to you here a low investment required way(s) to make money in todays market.

Over the last few decades I have bought and sold a few mobile homes, further I have met several men who have and do make tens of thousands of dollars from mobile homes. One man I know in San Antonio, Texas has 22 rental units (used mobile homes), his rental income is in excess of $12,000 per month. Another Man in Sequin, Texas owns a mobile park and he replaced the lot renters with homes he purchased used when ever anyone moved out. He was getting $225.00 to $295.00 a month to rent the lots, with the used mobile homes he gets an average of $650.00 a month rent. The used mobile homes cost from $5,000 to $10,000 each. Giving him a payback on the additional investment of one to two years.

Renting is not the only way to make money with used mobile homes. You can also buy, fix up and sell them. You can sell them on a rent to own. You can buy them for cash, then sell them on an owner carry note and make 20% plus annual returns on your money, or you could do a combination of all of these.

Let us look at each of these and run some numbers. For a reality check I will do up dates on this article of one actual deal now in progress, more later on it.

Renting mobile homes can be very profitable and a low cost way of getting into the rental housing business. Let us suppose you buy a used two bedroom mobile for $8,000 and spend $2,000 sprucing it up for a total investment of $10,000. You rent this unit for $650.00 a month. Your lot rent should be about $250 to $300 a month leaving you with $350 a month cash flow. After taxes your cash flow should be about $3,500 a year. That is a pay back of 28 months, in less then three years you have all your money back. Get ten of these and you have a real nice extra income. I prefer the single wide units because double wides units cost more to buy and to set up, yet the rent is not that much higher.

Buying and selling mobile homes can be a nice profitable side line and-or a way to pay for rentals. Using the same example you buy a single wide house for $8,000. You spend $3,000 fixing it up to sell, that will mean just slightly nicer upgrades and fixtures then for a rental. You want the customer to say “wow” when they walk in the door. New decorator paint, new carpet, new bath room fixtures, new faucets and lighting etc. And you stage the home like a model home. You list the unit for sell at $20,000. Your classified ad might look like this,

For sale newly remodeled mobile home.

14' x 56' 2/1 beautifully done interior.

$22,000 owner financed $2,000 dn.

You sell the home somewhere between $22,000 and $20,000 with $2,000 down. You finance the buyer at 14% interest. If you carry the note for $20,000 at 14% for 6 years their payment is $412.00 a month. If you carry 18,000 at 14% for 6 years their payment is $370.90 per moth. They will pay because they can't live anywhere else cheaper then that. You then sell the note or use it to borrow at the bank for your next deal. There are plenty of people who will buy 14% notes.

Do both. You could sell a few and use those profits to finance your rental fleet until you have enough rental units to provide the monthly cash flow you think is sufficient for your needs.

I purchased a single wide mobile home on Sept 22 end of this year. The lady was selling to clear her mothers estate. She was asking $10,000 and getting offers under $6,000 I offered her $6,000 cash or $1,000 down and $1,000 per month for seven months at zero interest. She jumped on that deal. I will spend $3,000 to $4,000 remodeling this unit into a “for sale” condition. I am looking for the “wow” factor to enable me to come as close to a doubling of my investment I can. The mobile home park ($300 lot rent) does not allow rentals, so a sale makes sense. The house is on a corner lot so it will show well. The outside only needs new light fixtures and door locks and a new entry porch. The inside will get new carpet, decorator paint, new linoleum, new fixtures, mini blinds, all new trim, curtains and a new shower, vanity and bathroom mirror. I will keep you undated on the progress.

Update: 8-14-2009 We got lucky and the city had a trash pick up last week so no demo debris hauling cost. The shower pan was $318. light fixtures $328.00 and I have not got my Lowe's card bill yet. Labor has not given me a bill yet either, but at $10 per hour it is adding up. My budget is $1,500 labor and $2,500 materials.

See the article on Making money From Mobile Homes for more information