Why You Can't Make Money Buying and Re-Selling or Renting Mobile Homes

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THE WINNING APPROACH AND WHY MOST BOOKS ARE WRONG  There’s no money in owning and re-selling or renting mobile homes.  There, I’ve said it. Anyone who tells you otherwise is wrong.  That being said, there’s huge profit in owning and re-selling and renting mobile homes in your mobile home park as far as the increase in the value of your mobile home park property. That is the primary difference in our opinion on this process as compared to just about everyone else.  We believe that only someone who owns the mobile home park makes money in selling and renting mobile homes, and even then, only in the increased value of the mobile home park.  If you are buying, selling, or renting mobile homes in other people’s mobile home parks, we believe that you are not creating any value with your time, effort and risk.  We have tried it, and although we have had a couple of winner deals, the loser deals far outweigh the winners. Let’s examine this in more detail. SELLING OR RENTING HOMES IN OTHER PEOPLE’S PARKS The Economics of Mobile Home Selling or Renting if You Don’t Own the Mobile Home Park Let’s assume you don’t own the mobile home park where the home is going to go.  Here is what the economics look like for renting a mobile home:
COST OF MOBILE HOME INCLUDING FULL REFURBISHMENT, BLOCKING, LEVELING, SKIRTING, STAIRS AND A/C HOOK-UP:                  $12,000
LOT RENT IN MOBILE HOME PARK:                             $200 per month RENTAL RATE FOR HOME:                                             $500 per month
INSURANCE COST:                                                           $50 per month
PROPERTY TAX:                                                                $30 per month
REPAIR AND MAINTENANCE:                                             $100 per month (yes it’s really that high)
SALES EXPENSE:             lets assume you do it all yourself so $0
Sample Profit and Loss Statement
Revenue                   $500 per month COSTS Lot rent                      $200 per month Insurance                  $50 Property tax               $30 Repair and maint.    $100   Net income                $120 per month
Hey, that’s only about a 10% return on investment! But wait…it gets worse. We’ve left out a few other real world expenses that need to be in there.
  • Vacancy
  • Bad Debt
  • Evictions & Filing Fees
  • Make-ready when the tenant destroys the house and steals all of the appliances.
  When you add these items in, you are losing probably $100 per month, or more.  Is this worth investing your time and money in if you don’t own the park?  Hardly. By Frank Rolfe Frank Rolfe is a mobile home park investor and owns over 100 parks with his partner Dave Reynolds. Frank also leads regular Mobile Home Park Investing Bootcamps through the MobileHomeUniversity.com.