Home dealer business model

It used to be pretty commonplace for a mobile home dealer to place a new home in a park, set it up, and sell it move-in ready. It appears to me that this business virtually doesn’t exist anymore. Does anyone know why that is? What’s the history behind it? Or do you see examples of this still occurring?

We became dealers so we can sell homes in our parks. It is an Indiana requirement and the suppliers require it for wholesale pricing. We do place new homes all set up and ready to go in our parks to sell. Certainly that adds roughly 10-12k in costs but that gets recouped after the sale.

I was told by one dealer near me that their floorplan lender doesn’t cover homes that aren’t on their sales lot. In other words they’d be coming out of pocket to place homes in communities which would be a very speculative and require out of pocket cash whereas we as park owners can floor the new homes in our parks essentially with no money out of pocket.

Why does it matter? The fact is they don’t do it and you have to come up with an alternative. Change with the times or be left in the dust.

I have a potential alternative method to infill lots. Understanding the past and the ‘why’ is essential to developing an effective plan for the future. So it does matter.

Just curious if you’d be interested in sharing your possible alternative?

In 2000, I had dealers paying space rent on vacant lots so they could bring homes in. I had one dealer paying me $4500 per month just for the option to fill up empty spaces.

In 2021, I have found it more difficult to get a dealer to move a spec home in. One dealer we have worked with wants to have the space rent free until they pre-sell a new home for the lot. I don’t like this, as the dealer can tie up the space for 6-12 months, if they don’t get a buyer they just walk.

Here’s my hierarchy of preference.

  1. Dealer brings in a Spec home. I give them 3-6 months free rent to sell the home. Dealer does all the lot prep etc.
  2. I do the lot prep etc. and dealer/homeowner brings in new home with 3-6 months free rent. I get paid back for all the lot prep once the homes sells.
  3. I do the lot prep etc. and dealer brings in new home with 12 months free rent. I get paid back for all the lot prep once the homes sells.
  4. I do the lot prep and bring in a New home.
  5. I do the lot prep and bring in a Used Home.
  6. I do the lot prep and let the dealer sell a new home on the lot (pre-sale). I give them up to 6-12 months to sell the lot before I move up to number 4.

Each of these scenarios is dependent on the park, the rent, and the market.

One thing that has worked for me in the past is to bring in New Homes myself, sell them (sometimes at a loss), and repeat until the dealers takes notice. Obviously, I don’t want to lose money on each home, but I have found that losing money on the first few helps convince dealers and prospective tenants that the park is worthy of new homes ( A $5-10K loss on one or two homes in insignificant if the value of the park goes up by $50-100K). A good tip here is the bring the home in yourself and let the local dealer sell it for you. Once you start making $20K per new home sale they will take over and put new homes in for you.


Thank you for sharing. Very useful. I am considering placing infrastructure for an extra lot (we have the acreage) on a current Park. Once the permitting/government hurdles and utility installs are overcome, then I will need to consider how to get the lot rented. Our current model is all TOHs, but I would maybe consider a POH

  1. You now need to be a licensed mortgage broker to sell homes on a contract. Or fall into another exception. Thank you greedy mortgage guys who got us all regulated. This killed a lot of the effort.
  2. Dealer license regimes are designed to limit how many people are selling homes. This made sense when things were booming, but now, hardly anyone will sell homes into parks.
  3. Get your mortgage broker’s and dealer’s license and sell homes on a contract for a modest interest rate and create a second income stream.