The Science of Flipping - Why Mobile Homes Are Such A Great Investment

Episode Date: September 16, 2021

The #1 training and coaching system to launch, grow, and scale your investing business!𝐋𝐞𝐚𝐫𝐧 𝐌𝐨𝐫𝐞: http://www.thescienceofflipping.com Become a 𝐓𝐒𝐎𝐅 𝐈𝐍��𝐈𝐃𝐄𝐑 and get access to exclusive training and resources:https://insider.thescienceofflipping.com 𝐈𝐍𝐒𝐈𝐃𝐄𝐑𝐒 𝐆𝐄𝐓 𝐅𝐑𝐄𝐄 𝐀𝐂𝐂𝐄𝐒𝐒 𝐓𝐎: ✔️ Science of Flipping Academy  ✔️ All the systems and software I use in my business✔️ All the tools you need to run your business ✔️ All my Scripts, Contracts, Spreadsheets✔️ Special Discounts✔️ And Much More... 𝐇𝐚𝐯𝐞 𝐚 𝐪𝐮𝐞𝐬𝐭𝐢𝐨𝐧?Get immediately connected with a team member on messenger:http://split.to/tsof-messenger 𝐁𝐞𝐬𝐭 𝐑𝐞𝐬𝐨𝐮𝐫𝐜𝐞𝐬 𝐅𝐨𝐫 𝐖𝐡𝐨𝐥𝐞𝐬𝐚𝐥𝐞𝐫𝐬✅ 𝐁𝐞𝐬𝐭 𝐑𝐞𝐚𝐥 𝐄𝐬𝐭𝐚𝐭𝐞 𝐒𝐨𝐟𝐭𝐰𝐚𝐫𝐞: http://bit.ly/tsofsoftware✅ 𝐁𝐞𝐬𝐭 𝐃𝐫𝐢𝐯𝐢𝐧𝐠 𝐟𝐨𝐫 𝐃𝐨𝐥𝐥𝐚𝐫𝐬 𝐀𝐩𝐩: http://bit.ly/tsofd4d✅ 𝐁𝐞𝐬𝐭 𝐒𝐤𝐢𝐩 𝐓𝐫𝐚𝐜𝐢𝐧𝐠 𝐒𝐞𝐫𝐯𝐢𝐜𝐞: http://bit.ly/tsofskiptrace✅ 𝐁𝐞𝐬𝐭 𝐓𝐞𝐱𝐭 𝐁𝐥𝐚𝐬𝐭𝐢𝐧𝐠: http://bit.ly/tsoftext✅ 𝐁𝐞𝐬𝐭 𝐃𝐢𝐫𝐞𝐜𝐭 𝐌𝐚𝐢𝐥 𝐒𝐞𝐫𝐯𝐢𝐜𝐞:: http://bit.ly/tsofmail✅ 𝐁𝐞𝐬𝐭 𝐃𝐚𝐭𝐚 𝐏𝐫𝐨𝐯𝐢𝐝𝐞𝐫: http://bit.ly/tsofdata 𝑾𝒉𝒂𝒕 𝒕𝒉𝒆 𝑷𝒓𝒐𝒔 𝑯𝒂𝒗𝒆 𝑻𝒐 𝑺𝒂𝒚 𝑨𝒃𝒐𝒖𝒕 𝑱𝒖𝒔𝒕𝒊𝒏: “Justin is one of the best trainers in this space. He really gives everything to his tribe.”– Brent Daniels (TTP) “Justin’s ability to connect with people and help them understand what he is teaching, is unparallelled”– Kent Clothier (REWW) “We have been in the trenches flipping homes in Phoenix for over a decade, he is one of the best to do it.”– Sean Terry (Flip2Freedom) 𝐀𝐛𝐨𝐮𝐭 𝐉𝐮𝐬𝐭𝐢𝐧:Justin Colby is the founder of The Science of Flipping Podcast and The Science of Flipping Coaching Program and is an active Real Estate investor having flipped over 1500 homes in multiple markets across the U.S. Justin runs an 8-figure real estate wholesaling business that closes 20+ deals each month in multiple markets across the U.S and has helped 1000s of clients learn how to become successful real estate investors. Justin subscribes to the philosophy of "Wholesaling To Wealth" and is the foundation of his coaching program which teaches you how to get started wholesaling or streamline and scale an existing wholesaling business as well as build long term wealth through wholesaling, flipping, and building a rental portfolio. Subscribe To Justin Colby:http://youtube.com/justincolby View All My Videos:https://www.youtube.com/c/JustinColby/videos  

Yo, yo, what is up? What is up, everybody? Welcome back to the Science of Flipping. As you can see, if you're watching this on YouTube, I am still at my home office with these two incredible athletes, Bo Jackson and Michael Jordan. If you are listening to this on iTunes, I would highly encourage you get over to YouTube. Subscribe to my YouTube because not only do I drop three golden gems of real estate podcasts right there on YouTube, I also drop three more videos about business, entrepreneurship, and real estate right there on YouTube. I also dropped three more videos about business, entrepreneurship, and real estate right there on YouTube. So if you have not yet gone over and subscribed to my YouTube channel, I highly encourage you to go do so, youtube.com forward slash Justin Colby.

Now this episode is going to be about mobile homes. Why are mobile homes such a great investment? Now I had a long learning lesson about this. When I say that, I mean roughly 10 years because just recently I found out so many great ways to monetize mobile homes. And so I want to use this episode to teach you what I know and help you not spend 10 years avoiding mobile homes. And so I want to use this episode to teach you what I know and help you not spend 10 years avoiding mobile homes, but actually taking advantage of so many great opportunities that will likely come across your plate because of mobile homes. So let's dive in here. And again, if this is your first time on this podcast, whether you're listening to it on iTunes, whether you're maybe watching me on YouTube, this is all about the systems, tools, processes, strategies to become a successful real estate

investor. And all of that, not just a wholesaler, but a flipper, not just a flipper, but a buy and holder, not just a buy and holder, but also someone who can wholetail as well. So let's jump in here because I think this is a conversation that must be had. I spent the better part of 10 years in my business kind of avoiding mobile homes. I just really thought that, first of all, as I was a flipper, I wasn't really going to be flipping mobile homes. Now, I actually have some close friends that make a killing flipping mobile homes, but that's aside the point. What I want to bring to light is I was not looking at mobile homes in the right light, as a matter of fact. Again, as I was a flipper, I wasn't going

to flip it, so I kind of found no use for them, but it's just incorrect. As I just mentioned, first of all, I have a handful of friends that actually flip mobile homes and they do it very, very well. Myself, I've even flipped a mobile home now. Can't say I crushed it. The mobile home actually was a 1977 build according to the County of Maricopa, City of Phoenix. And so we bought it. And the reason why that's important is point number one. You cannot get standard financing on mobile homes built 1976 and older, meaning they won't be able to go get a conventional FHA or VA loan if you are flipping it. So your end buyers kind of caught either using hard money or cash. Doesn't mean they can't use that, just means you limit

your buyer's pool. So I knew that rule already. And I saw the discount we were getting on the purchase price of this mobile home. And so I said, let's go ahead and flip it because it's built in 77. Let's go ahead and do it. Well, flipped it, got a buyer under escrow, under contract in escrow. And when it came to prove the HUD stamp, which is typically found under the mobile home, shocking. There was no HUD stamp to prove the age of year built. Another place that you can find this stamp would maybe be on the back of the mobile home. It was not there either. So I've had three different crews, two different engineer companies try to go under the mobile home to find this stamp, typically on the beam

on the front or on the beam on the back, or maybe the beam in the middle, and no one has been able to find the stamp. So rule number one of mobile homes, make sure that they're built 1977 and older. If you're going to flip it, well, I didn't intentionally break it, but I broke it. Somewhere along the chain of title, someone fraudulently gave Maricopa County records that this was built in 1977. And it was unfortunately handwritten and it was approved by the county. And I just didn't do my due diligence to double check with HUD. So completely my fault. I will always take onus where it is due. And so rule number one, if you're going to flip these things, make sure they're 77 or newer. You don't need that to be

the case, but it makes it a whole lot easier, right? If it is 1976 and older, there's just really tough chance getting financing. There is financing out there, just harder for buyers to be able to utilize that financing or less likely that they're going to want to because they tend to require 20% down instead of 3% interest is 6% interest. So a lot of buyers just don't love that. However, I love mobile homes because it's still affordable. Still the only affordable housing left, quite frankly. And so I still am a huge fan. Now let's talk about part number two when dealing with mobile homes. You want to make sure whether they are affixed to the land, which would be like a residential home, right? It is

affixed to the land. The land comes with the mobile. Non-affixed mobile homes are quite literally a mobile home just that was plopped on a piece of land. Those are the mobile homes that tend to not have too much value. And as a matter of fact, again, a friend of mine is buying those type of mobile homes regardless of year built. Typically, he's buying them anywhere from $3,000 to $10,000. Those are typically 1976 and older builds. So they don't retain their value. He's actually going in, he's remodeling them, making

them like new, and then essentially selling it off to someone who wants a good looking mobile home at a discount on their land. Now, when this happens, you are essentially going to be buying a car. There's not even escrow that you're going to be going through in the sense of like, it's not real estate. It's not affixed to a piece of land. So it is only a car. You actually have to use that transaction, go through that transaction with the DMV. Yeah. So it's a whole lot different of a transaction. Now, is that still a good play or a bad play? It just depends on your exit strategy, right? So you need to be aware if there's a statement of a fixture on these mobile homes. So if you find a home or a homeowner, I should say, that you're speaking to that has a mobile home on a piece of land, verify, make sure they give you a

receipt of a fixture to verify that that mobile home is actually affixed to that piece of land, verify, make sure they give you a receipt of a fixture to verify that that mobile home is actually affixed to that piece of land. That can make a huge difference of whether you should pay $30,000 for it or you should pay $3,000 for it. Okay. But nonetheless, what I even like about these older mobile homes on land is the idea, again, that means it's a fixed, is the strategy of creative financing. There are a lot of buyers out there that can't afford to go, A, since the home is old, won't be able to go get a loan, but also might not be able to afford or credit won't afford them the ability to buy it outright. So you have the opportunity to buy it. Let's just say you buy it for $30,000

and you can sell it to someone for $45,000 with a $15,000 down payment and you could do a seller financing to that buyer for them, right? And now you have a totally great creative financing opportunity. You bought it for 30,000, you put you have a totally great creative financing opportunity. You bought it for $30,000. You put $15,000 in your pocket because that was their down payment to buy. So you're

really only into it for $15,000. And then you created a note for the remaining 30 for, let's say, 15, 20, or 30 years. It is a great creative financing opportunity. And as I just mentioned at the beginning of this, mobile homes is like the only last affordable housing out there right now, right? And so I'm just a huge believer in mobile homes. I think there's great opportunity in mobile homes. And then let alone if you want to start talking about possibly buying mobile home parks. So a few other things that I want to review here on this episode just about mobile homes. First of all, like I said, if you're not watching this on YouTube, go to youtube.com forward slash Justin Colby. Make sure you subscribe.

If you're watching this, make sure you're hitting the like button. Make sure you subscribe. Make sure you turn on your notifications so you get all the notifications for all six YouTube videos I drop each and every week. So make sure you're liking this. Anyways, a few other things that you want to be aware of. A, if a mobile home is in a park, is the mobile home affixed to the piece of land, the lot, right? Like mine was. Mine is not in a park. It is in a community, right? It's a 55 plus community. But if it is in a park, are they leasing the lot? Okay. Again, because if they are, that means the mobile is not affixed. That means there is a land lease. If you were to quote unquote, buy that mobile, which you totally could,

but then you're going to have the park lease for the lot that is sitting on. You want to be very aware of that. And then again, if the home is, or the mobile is 1976 or older, and someone's asking $30,000 for it, probably not the greatest deal, right? Mobile homes tend to depreciate, not appreciate. So again, if you're dealing with one that is in a lot, it's likely leasing the land that is sitting on. You want to confirm that. You want to know how much the lease is. And can you take the mobile off the lot?

And if you can, are there any costs for it, right? And is there any remaining term to any type of lease agreement if there is one remaining for the lot that the mobile is actually sitting on? So those are the three kind of rules of thumb. I have a friend that just went and bought like a handful, like 14, I think actual mobiles that were in a park and they took them out of the park and actually are going to go create their own kind of opportunity and start their own park as a matter of fact. But they negotiated independently with the homeowners, which are the mobile homeowners. They made sure that the park did not have any remaining leases

or there wasn't a big cost to that. And they essentially bought them directly from the homeowners and took them off the lot, out of the park and created their own park. I'm telling you guys, mobiles are still a fantastic way to do real estate. They can be a little bit more unique if you've never done one. But again, I'm a big fan. Just understand the top three rules, which is, is it 1976 or older? Is it a fixed to land or not? And then if you are dealing with it in the park, what is the lease for the land? Can you take it off the, out of the park, um, et cetera. So hopefully this is a good episode for you guys. Hopefully you're looking at mobile was in a little different light. Um, and if you guys have any mobile home parks, I have a friend that is buying them. So hit me up besides that guys go subscribe

to my YouTube, youtube.com forward slash Justin Colby, and make sure you give me a five-star rating right there on iTunes. See you guys later. Peace.