New evidence shows manufactured homes appreciate as well as site-built homes!
Just read another pro mobile home article.
As an investor, many of us prefer stick built houses. Nice and normal. Average. Mainstream. Middle of the Road. Everybody does them.
After all, you might say, I’M AN INVESTOR. I wouldn’t stoop to mess with… excuse me (with my nose in the air)… mobile homes.
Well… I said that too, for over 10 years. To say I was a dumb@ss, would be kind.
Trailers, depreciate, crack alley, low life, blah blah blah!
The economy at the moment is doing great. But after the real estate crash in 2008, and the current market, things aren’t all in equilibrium yet. People are working, yes, but their credit may not have caught up yet. Not a big enough down payment. Self employed and don’t show enough income. Etc etc.
So, that brings us back to mobile/manufactured homes. When we buy, fix and sell one of these babies we look at a slightly lower price point market sometimes. We can sell quicker and not deal with title company or realtor many times. Paperwork is simple and quick. We’ve done deals the same day if it was just a quick flip without repair work.
Why would I want to do a mobile home over a stick built? Economics 101, preference, path of less resistance, ROI… shall I go on?
So… If you have $200k tied up in a stick built flip, sell at $230k and net $30k. ROI 15%.
OR you have $30k tied up in a mobile home, sell for $45k and net $15k. ROI 50%.
Which is more appealing?
Houses cuz it’s real estate. I made $30k vs $15k on these examples. Prestige, I’m an investor, etc.
Plus same argument, I’ve heard 100 times. Mobile homes aren’t real estate. They depreciate, they’re trailers, low life, crack alley, etc.
Yes. But you also have $200k tied up, inspections, title comp, realtor possibly, etc.
And how quickly can you put your money back to work?
Hiccup, inspection goes bad, more repairs needed, loan fell out, sale falls thru, costs more to fix than expected, etc.
Plus competition. Here’s a pic of what I found, when going to a foreclosure sales at the courthouse in the morning. At least 15 hungry investors. Everybody fighting over the same bone.
The old dogs (experienced investors – see them on the left?) will ‘bid up’ rookies.
What’s that mean? Well, if a rookie pays too much for a foreclosure property, they won’t make any money on it.
Why would they do that? Then they’ll be out of the biz. One and done. Weed out the competition. Plus they have a lot of money in a no return deal. Makes people nervous.
People wouldn’t do that! Oh, ok. New to investing? You’re not from around here, are ya?
So is that the game for newbies? Or anyone?
By the way, I took that pic as I was walking past them to go register a mobile home inside the courthouse. Skip the lines, right?
Now look at the latest numbers. Going up. Plus the previous article about mobile values going up with houses.
I’ve mentioned before that even though the economy is roaring, lots of folks are still playing catch up. Not enough disposable income to move up yet.
So again… Which is more appealing?
There are several ways to do mobile homes, as you may know. We’re providing affordable housing so more widely desirable.
1 – Own the park and rent the dirt (as the saying goes). Collect rent monthly or annually depending on your arrangement with the residents.
2 – Own the park AND the mobile homes.
3 – Just deal with individual units. That is, buy, fix and sell them individually, as you go.
So, depending on your ambition, drive, motivation… money… you can decide which way, or multiple ways, to go.
Here’s more about that in this article.
Read full article at Urban Wire