For years I was spec building single family homes and doing very well until 2008. As we all know what happened then, since then it has been a down hill battle. Through the past few years I have become very interested in mobile home parks. I have tried partnering up with investors to acquire some parks but most people don’t understand the concept and eventually walk away from the deals. So after all these disappointments I have decided to go about this on my own, start at the bottom and attempt to flip a mobile home. Hopefully through this process and a handful of flips I will have the cash I need for a down payment on a MHP.
Has anybody or does anybody flip mobile homes? if so, please share any experiences that maybe helpful or anything I should stay away from.
I flip homes in my own park. The problem is that the profit margin is very thin. My homes, post reno, usually sell in the 70 - 80 thousand range. Reno costs are about $30,000 on a total Reno (inside and out, windows, siding, roof, new kitchen and bath, flooring,doors,paint, drywall, plumbing etc.) and $5000-$8000 on a quality lipstick reno. Depending on my purchase cost profits will range from $10000 to $25000.
If in your area homes are not of a high value flipping is not worth the trouble. As with anything you must know your market.
Greg, I live in CT, half hour from manhattan so the closest MHP to me is about 45 min north. Nice homes in those communities are ranging from $40k-60k+ there are not many for sale but the one that I am currently looking at is FSBO and I believe I can make a deal in the 10k-12k range with 12k-15k reno cost. Looking to be all in around $25k. Would put up for sale for $49k I like the thought of a quick (1-2 week project) and the thought of making $20k on a $25k investment but I don’t know how long it will take to sell. I would hope quick being that it’s the cheapest home anyone can purchase. My main concern is will a potential buyer be able to get funding? I certainly don’t want to tie up $25k for 6-12 months.
Financing for buyers is always a problem. As a park owner I insist that a potential buyer has their financing in place before the real estate agent brings me their application for approval to buy. There is no point in me bothering to screen applicants if they ultimately end up failing to get financing.
This is actually one of the reasons I have selectively purchased all the older homes in the park for reno and end up pricing them at the top of the resale range for my park. By raising the standard of the community with the higher prices I attract more affluent buyers that have cash to purchase. Mostly seniors selling another home and wishing to scale down.
When a home does go up for sale I try to educate the sales agents that my park is not for first time home owners or welfare recipients. I suggest they target retirees. I would suggest doing flips only in the best quality parks, paved roads, street lights, obvious pride in ownership, and the highest priced homes. The reputation of any park is generally well known so it is very important where you chose to invest.
When flipping mobile homes the old adage of the worst home in the nicest neighbourhood is 100% spot on.