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Mobile Home Investing for Beginners

Manufactured and mobile homes are young industries, relatively speaking. So it’s understandable if the concept of mobile home investing is confusing for traditional real estate investors. Even more so for novices still learning their way around real estate investing.
To make it easier for new entrants in the industry, here a few things that can help paint a bird’s eye view picture of this unique niche in real estate investing:

Differences Between Manufactured and Mobile Home Investing

The earlier part of this article can make it seem like manufactured and mobile homes refer to the same thing. It’s this tendency to use the two words interchangeably that led to a lot of confusion among new investors.
Both manufactured and mobile homes are factory-built and delivered via wheeled transport. Where they differ has to do with more stringent building codes implemented by the Department of Housing and Urban Development (HUD) in June 1976 for factory-built housing.
Any home built in a factory before June 1976 is a mobile home. Since the HUD codes make the homes safer, the industry felt the need to distance themselves from “mobile” homes, and so coined the term “manufactured homes” for housing built in the factory after June 1976. But as long as you know the distinction as largely age-based, you can use the terms interchangeably.

Mobile Home Investing: Private Lands vs Parks

When it comes to mobile home investing, novices will have to learn how to adapt a strategy based on where the mobile home is located. Some mobile homes are situated in mobile home parks, but there are also mobile homes installed on the owner’s land instead.
A real estate investor must know the distinction between private lands and parks: if you buy a mobile home located in a park, you are only purchasing the home itself. You cannot buy the land because it belongs to a 3rd party (or in a lot of cases, by the state.) On the other hand, a mobile home attached to the owner’s land can result in a deal which includes purchase of the home itself and the land.
So investors need to adjust offers and to clarify specifics – it’s not uncommon for novices to overpay for a mobile home because they thought the land is part of the deal as well. You need clear written agreements on whether the land is part of the deal or not.

Restrictions in Communities

When you buy a mobile home, you also need to pay attention to any rules or restrictions set in the communities they belong to. Sellers of mobile homes don’t have the authority to contravene these restrictions. They will apply to any buyer who ends up with the house.
These restrictions could be anything related to the general upkeep of the community:

  • age restrictions (some retirement communities only allow adults over 18)
  • credit restrictions
  • number of residents
  • income restrictions
  • restrictions on allowed pets

Take Local Supply into Consideration

When it comes to mobile home investing, you can increase your chances of success if there are more mobile homes located in the market or location you are targeting. The ideal goal is to have as many mobile home parks situated around you within a 50 mile radius.
You can easily create a strategy for his by relying on third party sites catering specifically to mobile homes, such as MHVillage.com. This is mostly for people looking for a place to park their mobile home in. But real estate investors can also use it to fine tune their strategy.
Finally, it is crucial to remember: mobile home investing may rely on formula and strategy, but there is no real magic bullet that will make you successful every single time. You have to be quick on your thinking, and must modify or adapt your purchase offers to accommodate different mobile home sellers.

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