The Science of Flipping - The Secret Mobile Home Fortune

Episode Date: January 26, 2021

The Secret Mobile Home Fortune

What's up, everybody? What's up? This is Justin Colby, your host of the Science of Flipping Podcast. Listen, this is a big question. A lot of people get them, but are mobile homes a good buy? Should you be dealing with mobile homes? I'm going to answer it right now in this episode. But first, as always, make sure you are jumping over to youtube.com forward slash Justin Colby. Subscribe to me, watch my videos. I drop a video a day on business, real estate investing, as well as entrepreneurship. All right, so let's get at it. I know many of you are actively marketing. I know you're doing cold calling, direct message or direct mail, texting, PPC, and many of you are getting mobile homes as leads, such as I.

This week alone, we have done two mobile home transactions. One, if you caught my previous episode, we actually are buying it and we are flipping it. The other, we are actually wholesaling with seller financing. So in my opinion, the answer is yes, mobile homes are very good deals. Now that is because in Arizona, mobile homes are plentiful, you know, around the rest of the country. I have students that will tell me, you know, God, mobile homes in this part of the world, like they're few and far between, no one wants them, they go for like $5, I get it. But if you're in an area where you have like

Arizona, where you have a ton of mobile home options, right, whether they're, you know, mobiles on a piece of land or, or in a park, or in a community, you know, the flip that I'm doing is in a 55 plus community, it is affixed to the land. And so it's a typical real estate transaction. Now, the things that you need to watch out for with mobile homes, is you want to confirm that the mobile home is affixed to the land. So what that means is now you are doing a traditional real estate. The mobile home is actually deeded to the land. You're buying the land and the mobile home. There are times that you will market to someone and the home or the mobile is not affixed. The mobile is actually treated as a car. Okay. You are buying the land and you have to deal with the mobile home

that is on top of it, which has to actually go through the DMV. And so you need to watch out for that, right? Because you might have someone who just wants to sell the actual mobile home and that's okay. Again, mobile homes, in my opinion, are good deals, especially for the right price, because

there's always someone that wants to have affordable living. The reason why right now, for sure, I'm a big fan of mobiles in Arizona is it's really the last affordable living out here right now, right? The rents and the purchase prices of homes have not equaled the same appreciation, meaning a home would typically buy $150,000 home can't afford the $250,000 home so that they would have to rent. Well, I don't want to keep that as a rental because it's not a very good rental. You see what I'm saying? So mobile homes are very, very good because essentially, it's the last affordable housing, right? Like I said, the home that I bought was $79,000. We're going to put $25,000 into it and sell it for $169,000.

$159,000 and $169,000. That's a great deal. But also it rents for $1,400, right? So like just under that actually 12, 12, like just under 1300 is what we did a comp on in terms of rent. So if I bought that in actually just kept it in a rental portfolio, I'm getting $1,300 for something that all in with rehab, I'm into it for 105. That's a great rental, right? So it's affordable for people to live and rent. And it's a good rental for me. Now, the other deal we did, we actually did it where it turned out to be a really good seller finance deal. They just wanted out of the deal. They essentially want $2,500 in their pocket. We had our buyer, we wholesaled it. We had our buyer come in with $6,000 down, non-refundable as the deposit. The $2,500 goes to the seller and we keep the remainder and everybody is happy. They were in a very difficult position.

There was not a lot of room in this deal. The only real way to sell it was to do seller financing because of how much the seller owed. And this is why if we take it to the next step, understanding how to do creative financing and how to do subject twos and how to do agreement for sales is really, really important. Because if you can do that and get creative, you have a lot of options. But to talk to just the point of mobile homes, I am big fan of mobile homes. If you are getting mobile home leads, do not throw them out. I swear to hand to God, I used to throw them out. For years, I would not deal with a mobile home. I literally

be like, ah, it's just a mobile home. All right, next. Dead deal. I would dead the deal. That's how much I didn't want to deal with it. And it was out of pure ignorance. I wish, I wish I had someone on a podcast like this telling me how valuable mobile homes would be. Do not throw those leads away. If you're in Arizona and you're listening to this and you don't want to work the lead, send it to me. I will work it. They are such valuable deals. There's incredible amount of opportunity there. There There's incredible amount of opportunity there. There's an incredible amount of buyers there because again, it's the last affordable living. It's great rental opportunity, buying and holding and keeping your portfolio. It's great seller

financing opportunity. If you are getting mobile home rentals or mobile home leads, I should say, you need to work them as you would every other deal. The things to watch out for for certain is make sure that is affixed to the land. If it's in a park, make sure you can move it. Find out what the terms are to move it. If you can take it out of the park and what that looks like and how much that might cost. If it is on in a community, make sure that it is the original mobile home on that lot. Okay. If you find those three things, you should be safe. Again, 1976 is the year that mobile homes now can be sold with financing. So 1976 and newer. So you really want 1977 and newer essentially, because then you can resell them and you can get

your buyer can get financing. A lot of the reason why people don't like older mobile homes is you can't resell them to someone that has financing. And so that can be discouraging to a flipper. But if you get one that is 1977 and newer, then they can be sold with financing and it's just as normal flip as it normally would be. So hopefully this makes sense to you guys. If you are passing up mobile homes, do not. This is like, you know, I've talked to my team about actually targeting mobile homes in our marketing because that's how good and how valuable they are. Hopefully this finds you guys well. If you have not yet gone to the Science of Flipping and you want some help, if you want some, you know, advice just about the challenges you're seeing, me and my executive team have time slotted to talk to you guys.

Go to thescienceofflipping.com and just fill out the form. There's a quick little tab there. It says apply now just basically sets you up for a time to talk to me and my executive team, go to the science of flipping.com. Happy to help wherever I can. And I look forward to talking to you guys on the next podcast. Peace.