A Guide to Flipping Mobile Homes Intro Thanks for purchasing our book.

First off, mobile home investing has been a huge asset to our real estate investing portfolio. Especially in times where margins are thinner in asset types like commercial, land, MFH, single family residence, and notes.

This isn’t a comprehensive guide by any means. But it is designed for the newcomer in ​ ​ ​ ​ MH’s and/or the wholesaler or flipper who wants to monetize some of the mobile home ​ ​ ​ ​ leads that he/she generates (I know that I left a lot of money on the table when I threw those leads away).

It’s also designed for those who are very interested in possibly making anywhere from ​ 20%-50% (or more) return on their money yearly. ​

This niche has many exit strategies for the flipper who wants to make a quick turnover… or the cash flow investor who wants to create a passive income stream. Or for the developer who wants to build a large amount of value in a parcel by planting manufactured homes into them.

Whatever your goals are, it can be accomplished with mobile homes.

To dive further into the topic and learn specific strategies, then sign up to our email list where we email DAILY tips along with promotional offers to upcoming events, seminars, and information packets at:

www.pauldocampo.com

Paul do Campo, Millionaire Makers Next Generation

DISCLAIMER: We are not financial advisors and do not guarantee any success or return on any investment. The returns and the theories that have been stated here are only just that, theories and do not guarantee a certain return on any investment.

Now let’s get moving…

What is Mobile Home Investing About….

Mobile Homes aren't sexy. I know. Especially compared with all the ads you’re seeing with the wholesaling guru driving his [rented] Ferrari with $25,000 checks in his lap to deposit. I get it. That’s sexy. That’s cool.

You want to know what’s even more dull and un-sexy…? Mobiles homes aren’t ​ ​ ​ ​ considered real estate (unless it’s on it’s own permanent foundation). They are considered personal property. It’s kinda like flipping a car (but a helluva lot more profitable and stays in place).

In fact, when I first heard of it I thought it was the stupidest business idea, “Mobile homes?! Naw, I’m ok. I’ll stay right here looking for regular houses to wholesale or flip.” In reality, I was struggling to find deals in the SFR area, but I would never imagine ​ ​ myself in the mobile home industry.

So why transition into mobiles?

There are two reasons (other than the fact that I was fed up with not finding deals in SFR): 1. It was the low hanging fruit 2. And the cash flow was huge very early ​ ​

Let me start with the first.

Like I said before, I was struggling. The REI market was getting tough with a lot of ​ ​ competition in the field, and margins getting smaller. Once I started marketing for mobiles it was night and day. The result were almost immediately… I had a contract ​ ​ ​ ​ ​ signed in 3 weeks.

Here’s a secret as to why it was so easy to get a contract: There is very little competition in the game, and there are a lot more motivated sellers of mobile homes than SFR.

I know that Andy Teasley, an educator and owner at Millionaire Makers Next Gen, finds a deal in one day when he wants to buy.

The second reason I choose mobiles… cash flow.

When I finally paused my house flipping thing, I realized what I really want is passive ​ cash flow. And mobiles homes gave just that. In 6 months I had $1,300 of passive cash ​ flow. And that’s ALL NET CASH FLOW, NOT:

Mortgage -maintenance -management -capital expenditures ______= cash flow.

No, this was PURE cash flow with no maintenance or management. No Tenants. No Toilets. No Turnover.

And if ROI is important to you (which it should be) then you’re in the right place. ​ Because on my mobiles, I was getting anywhere from a 25% to 44% annual return And, ​ ​ veteran mobiles home investors are getting 50% or more.

To put that into perspective... For a 30% ROI: If you invest $20,000 into a 10 year asset that means you’ll receive over $6,000 a year. Doesn’t sound like a lot. But that’s one deal. And if you’ve been in the REI world for a bit, you’ll know that a 30% PASSIVE ROI is hard to find. (as a newbie, I was getting this right from the gecko).

(This is what it really means to have you money make money for you)

But let’s say you want a quick turnover rather than holding that $20,000 in an asset. If I ​ ​ would have sold that mobile for $40K cash, I would have made $19,000 NET.. That’s about 47% cash-on-cash return (one of my other mobiles would have been a 70% cash-on-cash return). If I do that same deal 3 times that year with that money that means I would make a 141% ROI.

So, if your flipping, wholesaling, holding on for cash flow… these numbers are definitely worth finding out more about this profitable niche.

Now there are a few strategies to consider (and more than one way to skin a cat). I’ll admit though, the only strategy I’m familiar with the most is selling them on a note and for all-cash. There are more advanced strategies that I briefly outline in this book that I’ve come across in my own experience and from others.

NOTE: For this material I refer to mobile homes I’m using that term to describe ALL manufactured homes and mobile homes. But there is difference in definition for both. A manufactured home is built AFTER June 15, 1976 when the US HUD took over the building standards for mobiles homes. Mobiles homes are built before that date. However, these two terms are used interchangeably by many.

Let’s get on to a quick list of mobile home strategies.

Strategies For the most part, mobile homes are generally sold for cash in the consumer market.

That’s mainly because very few lenders lend on mobile homes without a permanent foundation and the ones that do have pretty strict requirements As the mobile home becomes older than 20 years, than finding the lenders for those becomes even harder (however they are out there).

That’s why a lot of investors (who are unfamiliar with mobiles) avoid them like the black plague.

But there’s other ways around that problem.

So here’s a quick list of things you can do if you come across a motivated mobile home seller lead:

1. You can flip them for cash (takes a little more time because with older mobiles home it’s a little harder to get lenders to qualify buyers) 2. You can sell them to a financed buyer and cash out 3. You can wholesale them (Dealers and other investors will buy them but you should know the price points before hand… HINT: it’s NOT the 75% rule) ​ 4. You can move them to a parcel of land you own and rent it out (or flip it) 5. You can move them to an empty park space and either flip for cash or sell on a note 6. If the park permits, you can sublease them (rent it out) 7. You can purchase the land and the mobile home and rent it out 8. If you own the parcel you can sell the mobile on a note then lease out your land to the buyer. 9. If you’re licensed under a MH Dealer or a Broker in your state, you can list them 10.Or, you can sell them on a note (Tying them into notes is just how I have created $1,300 of cash flow in 6 months and many others who created financial freedom through passive income notes.) ​

These aren’t just business strategies. These are also EXIT strategies. However, the two strategies I cover a lot of ground is flipping to sell on a note and selling for all-cash. So, I’ll go into details in order of: - Finding the deal - Determining price - Process of buying - Rehab - Selling

Let’s move on to our first step in flipping a mobile home, and that’s finding the deal. In order to start this journey, you need to start generating some leads.

Lead Generation Obviously, in order to do one of these profitable deals, you’re going to have to start talking with sellers. This may or may not be easy for you depending on your skill set, ​ ​ your persistence, and your market (competition, market awareness, market ​ ​ ​ ​ sophistication ).

You might be reading this because you’re a brand new investor. Or you might be here because finding deals in the SFR is frustrating you, like it was for me. If you’re already experienced in marketing and lead generation for houses to buy, then there isn’t much of anything new here except perhaps having a funnel of leads come from park management. Everything here is equivalent to finding assets to buy outside of mobiles as well.

In either case, I can assure you that in the mobile home market, you’ll find lead generation a lot easier, a lot less time-consuming, and a lot less expensive than in the ​ ​ ​ ​ ​ ​ SFR market. In fact, if you learn this with mobile homes, I can guarantee you can take that newly learned skill of lead generation and deal closing, to any other real estate niche and it’ll be a walk in the park compared to last time.

Because, lead generation, sales, closing, is a skill that must be practiced. Daily if you want to master it. But, when you’re getting wins very early on, like you will be with mobiles, than it makes the ride a lot smoother.

However… this isn’t a quick rich method. All this info is relevant and works today, ​ but it takes time. Depending on how competitive your market is, it may take a lot of time or tweaking on your buying process.

However, that shouldn’t depress you.

Keep working on getting leads every week. (or however much time you have). Even with a lot of leads, no one can guarantee you deals. Because lead generation is one thing… closing a deal is another.

Salesmanship, negotiation, and closing are aspects of REI that won’t be covered in this small eBook. However, if you’ve signed up to my email list at www.pauldocampo.com, we give out a lot of daily tips and promotional material on marketing, business, and selling that’ll help.

Below, I included a list of generic ways to generate leads, however this isn’t a comprehensive eBook on lead generation. Much of it is similar to lead generation for buying SFR (similar kind of offer and message).

Here ye go:

Lead Sources

Sweat Marketing a. Door Knocking (HIGHLY recommended).... I know that it sounds uncomfortable to do, but it doesn’t take any special skills except asking questions and listening. ​ ​ b. Cold calling… calling FSBO or skip tracing your direct mail list to call. c. Network… with managers, agents, and other investors. (HIGHLY recommended). ​ ​ ​ ​ ​ ​ Letting people know what you do. This can time to establish a relationship, but eventually, managers will give you leads. Managers also give out repo lists; ask for it and then contact the seller. d. Online…. I’m referring to the free classified ads you can post in Craigslist and Facebook. I’ve obtained leads and signed contracts this way and I know people who have obtained deals this way too. e. SEO (free if you do it all yourself) f. Flyers g. Follow up (this is a must and you can write a whole book on this)

Paid Marketing

a. Facebook ads (used very little by MH investors) b. PPC (used very little by MH investors) c. SEO (used very little by MH investors… except by me) d. Direct mail e. Bandit Signs

The top three sources that I’ve seen many investors obtain their leads are through: 1. Managers and park owners that send motivated sellers their way 2. Door knocking 3. Bandit signs

I get a good number of leads and deals from SEO (search engine optimization). But this is a long term strategy.

Also, keep in mind, that the volume of leads coming from SEO (or any strategy for that matter) depends on the population of mobile homes in the area; common sense right?

If you have 40 mobile homes parks in a 20 mile radius then you can have larger volume of leads than someone with 5 parks in a 20 mile radius.

Follow up One of the biggest mistakes that people have with lead generation, is tossing out leads after their first contact.

They don’t have a follow up system.

If you’re tossing out leads after your first contact, then you’re leaving money on the table. Arrange for yourself a follow up system; nothing fancy, just write down these leads somewhere and have a schedule to call, email, text back.

Sales Process

Now assuming you have a lead, you need to know determine how much you can offer that lead.

First off, when I do get a lead, I usually ask: - To locate the title, - take pictures of the home, - send me a pic of title.

There are a number of ways to perform this part of your sales process. I usually try and determine a purchase price before I visit them.

But this isn’t a hard and fast rule.

Sometimes I break that rule.

I know some investors that always go on an appointment first, gather information there and then give an offer later.

For me personally, I don’t like to waste time on appointments with non-motivated sellers. I want to gauge them on the phone first. If I sense a motivational situation behind their talk, I’ll go visit.

Me requiring them to send me all those things first is sort of a qualifier. Meaning, if they are motivated they’ll send me what I ask. However, again, like all things in life, that isn’t a hard fast rule.

This part of the sales process (gathering information, negotiation, offer presentation) is a skill set that you’ll learn over time (and I’m still learning today) and through practice and knowledge.

This won’t be a guide to your sales process, but it’s just a little glimpse of it. There are so many great sources out there that teach the sales process.

But mine and many others loosely consists of:

1. Gathering the lead 2. Qualifying the lead 3. Presentation (presentation is more of you going there to ask many questions and figure out what they want then presenting your offer that best suits their wants and needs) 4. close

Now, on to figuring out what you can offer by first...

Determining ARV (or as-is value) Determining your ARV is crucial for knowing your purchase price.

Two ways to do it: - Comparing sold and active listings. - And using the “rent formula” (I’ll explain later).

Comparable value The number one way to figure what your mobile home is going to resale for is to compare it with other mobile homes. (we’ll refer to the method of pricing out your mobile by comparing with others as “comping”)

The biggest source for comping is the MLS (multiple listing service). Which is an online source where multiple brokers can list their homes for sale and records of old listings and sales.

Ok, so If you have access to the MLS, then you can look there. There's a lot of detail that can help you determine both an as-is sale (selling your home without any cosmetic repairs), or an ARV. To get access you’d have to have a Broker's license or another agent will be nice enough to give you access.

If not, the next best thing are free online sources like Zillow, Redfin, Trulia, Realtor.com, etc.

The only down side of MLS, is that depending on the park ,you might not have any information on there for that specific park. Because, sometimes, certain parks don’t really have brokers making listings for them. It might be a park where homes are a low values (like $10,000 or less) so it’s not worth it for a broker to make a listing. If that’s the case, then you’ll have to use other sources.

And, before I forget… when looking at comparable homes, you want to ONLY look at solds and actives in the same park. Even a park across the street isn’t relevant in your price (unless the park is very similar in feel, type, and rent space). ​ ​ ​ ​ ​ ​

Now back to comping. ​

Other than the MLS, you have three other sources: 1. Zillow.com ,Redfin, Realtor, etc. ​ 2. The Santiago comparable sheet… this is in California. There’s a Manufactured Home Dealer and lender that keeps very good records of sales. This may or may not be in your state. But if you can find out if your State or private entity keeps records like this, its a gold mine.

The only downside is that there are no pictures. So it’s a little hard to figure out what is an ARV and as-is sale. You’ll have to look at other sources in combination with this one.

To get the Santiago Comp sheet you have to go to www.santiagofinancial.com. It ​ ​ is expensive though. Best thing to do is find a local dealer that’ll give you access.

3. Ask around… asking the local Dealer/Broker and park manager will give you an idea. But be careful of Brokers over exaggerating just to win a sale. 4. The rent formula (more advanced but I briefly cover below)

Use a combination of all these to get an idea of what you can sell your mobile home ​ ​ AND the days on market (this is important to know how many months you’ll be paying ​ ​ for rent space)

When comparing, you want to look at homes that are SIMILAR to yours. There are two factors: 1. Year of home (don’t look at a 2008 if your mobile home is 1970’s) 2. Size (not only compare double wides with double wides, but also look at similar square footage or dimensions)

Understand, that this method is for obtaining a CASH comparable value. You will hopefully find two values, an ARV, and a “as-is” (as it sits today) value.

As-is value The reason why an “as-is” value is important is because you may want to just sell as is, and you might want to look at what it takes to get it to an ARV value. Sometimes, an ARV isn’t worth it in certain parks.

For instances, if you find that almost all the sales in a specific park weren't fixed up and they all sold for $20,000. Well then that’s your “ARV”. Now determine what it takes to get YOUR mobile home to the same condition that those $20,000 homes sell for. If it’s exactly the same, then awesome, you don’t have to do much.

Throw this into the scenario: you have a few $20,000 homes that sold and that aren’t ​ ​ ​ ​ fixed up that sell in 45 days. Then you have some fixed up ones that sell for $40,000 but ​ ​ ​ take 4 months to sell. You spent $9,000 to buy your mobile home. Is it worth it for you to spend another $8,000-$13,000 to get it up to a $40,000 sale price?

That’s up to you and what you want to receive in your ROI and how fast you want your ​ money money back.

Keep this mind… Some investors love to rehab. It adds value to the park and makes you look good to the manager if you’re trying to win more deals from them. ​

(pro tip: you can make your decision based off of the best ROI. If selling on a note, use your financial calculator and solve for your yield. You’ll be surprised that for the above scenario, you best ROI is selling it as-is)

Estimating values can be a guessing game. Because sometimes, values aren’t cut and dry. There may be very few pictures on the MLS. Or very few sales to compare with.

Selling for 25% more If selling on a note, you can sell your home for 15%-25% more than the cash comps. ​ Because selling on a note is a slightly different product than selling for cash. Your giving an extra feature that is hard to find in the market so i justifies a higher value.

I should bring up here that there’s another formula which Andy Teasley teaches in his class at Millionaire Makers Next Generation in which you can determine a resale value based off the average rents in the area. That requires researching what the average apartment rents and then using the financial calculator to solve for your principal value.

So below is a brief description on calculating out a note payment (this would be important since if you’re selling on notes you should know what you can reasonably charge a buyer), and then using that payment to figure out a MAX price.

Rent Formula (advanced) This something that Andy Teasley teaches in his class at Millionaire Makers Next Generation, and I haven’t heard anyone use this.

This is the method I use in addition to using comps to help determine my MAX sales price when selling it on a note. However, using comps alone might be sufficient enough.

I will got into a very brief description ASSUMING that you understand the financial calculator. However, this method is taught in detail almost exclusively by Andy Teasley in one of your videos at Millionaire Makers Next Generation.

If you don’t understand the financial calculator (most importantly the 5 buttons on top of the calc) or you haven’t taken Bill Tan’s class or Andy Teasleys course, then this will go right over your head. If you’re on our email list at: www.pauldocampo.com we’ll often have events on ​ ​ these classes or have promotional offers on audio/video courses on the subject.

First you need to calculate your max…

Note Payment

To determine your resale price on a note you must FIRST find out what is your max payment ​ you can charge your end buyer (or the NOTE PAYMENT). ​

To find out the note payment, we look at average apartments rents in area: 1. Research and find out comparable apartments in your mobile homes’ area (if you have a ​ ​ 3 bed mobile home ,find out what 3 bed apartments go for). 2. Once you’ve estimated what the comparable apt rents go for, subtract $100-$300 from that (EX. if you see that 3 bed apartments usually rent for $1,500 then remove $200 and now you’re new number is $1,300)... the reason why we do this is to give more incentive to buy rather than rent. 3. This number ($1,300) is what your end buyer can reasonably afford every month as a ​ ​ TOTAL payment (space rent + note payment for home) 4. Subtract the rent space from the that total number above ($1,300) and you now have your max monthly note payment (EX. if rent space is $700 and the total number monthly ​ ​ payment (rent + note payment) is $1,300 then your max note payment is $600)

Ex. Average 3 bed apt rents = $1,500 ​ ​ Total payment buyer can afford ($1,500-$200) = $1,300 ​ ​ Rent Space = $700 Note payment (1,300-700) = $600 ​

When you calculate out a note payment, you can then work backwards to figure your you TOTAL max resale value.

Resale value based off note payment

(now we get into the calculator stuff… if you don’t know the financial financial, don’t worry, just rely on comps… but I do advise to learn the calculator as it can do some very cools things for you)

Now that you have your monthly payment number, take your financial calculator and solve for ​ (PV)... assuming you’re (N) is 120, and (I/YR) is 10%.

Solving for PV gives you your MAX resale price.

Warning on this…. This works best on lower rent areas. In higher areas with mid range value ​ mobiles homes, this will exaggerate the resale price (PV). That’s why it’s good to use comps to verify. You can only reasonably sell a home on a note for 20%-25% more than cash comps. ​

How to Buy Buying is the most important part of your business. It’s creates inventory. Some investors who’ve built a scalable business in flipping, entrust no one but themselves in this part of the process; i.e. making the “yes or no” decision on an investment.

So, you need to know how to BUY these investments at the right price . I’ll cover the ​ ​ ​ ​ process of taking title after this.

To make things simple, I’m going to first be explain the formulas ASSUMING we are talking about selling a mobile for ALL-CASH (or selling to a lender qualified buyer). However, if your exit strategy is selling on note, the purchase price isn’t different; this process below goes hand-in-hand with selling on a note.

NOTE: when I say all-cash or selling for cash, I mean getting full cash value to you at sale. So this includes being able to sell to a lender-qualified buyer. However, like I mentioned earlier, finding a lender on a mobile is a little harder but can be done.

Before we go on to the nitty gritty…. If you’re selling for cash, ask yourself, “what’s my ​ ​ desired net profit?”. Depending on what your desired profit is on these, is going to ​ determine the value you’ll be focusing on.

Here’s what I mean: Some parks are real cheap. Where you’ll find homes where the resale value is $5,000-$15,000. So are you comfortable only making $2K-$5k on that? That’s up to you. But just so you know, Brokers and dealers charge $3,000-$9,000 to list a mobile. Personally, I’d rather not take on all the risk and all the work just to make the same amount or less than someone who takes on no risk.

(that’s why a lot of investors just sell it on a note with these “cheapo” priced trailers)

$5,000-$15,000 are the cheap parks. There are plenty of parks with higher values. Like regular sales of $40,000-$90,000.

Let’s get to the math...

Here are a couple of formules you can use to determine what your initial purchase ​ price is. As you see in the examples, depending on your desired profit, they all roughly land on the same number except for the 70% rule. ​ ​

The 70% rule can mean you pay double for a mobile home. So if you’re a wholesaler trying to assign a mobile home to another mobile home investor, know that your usual formulas used for SFR, won’t work. However, the 70% rule works a little better as you get closer to $100k.

● All-in cost is 50% of ARV…. Meaning, you take half of your ARV, subtract the ​ estimated costs, and then you have your purchase price. ○ Here’s an example: ARV= $30,000. 30k/2= $15K. Rehab=$5K Holding costs=$2k 15k-$5k-$2k =$8K Max Purchase price = $8,000

● 70% rule… the usual rule that SFR flippers use. But make sure that the profit is ​ your desired profit. This won’t work very well with cheaper priced mobile homes. ○ For example: 70% of ARV of $30,000= $21,000 Rehab costs= $5,000 $21,000-$5,000=$16,000 Purchase price = $16,000 Net profit = $7,000 (After holding costs)

Do you really want to risk that to make $7,000? That’s up to you, but there are better deals out there. If that’s ok with you, I recommend listing mobiles homes instead. You’ll get the roughly same amount with no risk.

● Subtract all costs and profits…. Take the ARV, and subtract your desired ​ profit, a cushion for risk, the rehab costs and the holding costs and you'll find you purchase price. For example: ARV=$30,000 Desired profit=$12,000 Rehab cost=$5,000 Holding costs=$2,000 Cushion=$3,000 Purchase price=30k-12k-5k-2k-3k=$8,000 ​ ​

I know that may seem like a steep discount. But this is often what investors buy these mobiles at. These are smaller priced assets. So, why should someone risk money, time, and work for $5K of profit?

Whatever you do….Don’t over pay! ​

You want a cushion just in case the market turns around and your mobile sits, or prices start dropping.

Here we have been talking about ARV. But you can use the same formulas when you’re going to sell for “As-Is”. The as-is value of the same mobile home in the above example maybe somewhere around $15,000-$25,000.

Process of buying

So now you have a motivated lead that’s willing to part ways with their mobile at a price that fits your max price.

Now what?

1 . Get the contract signed. ​ ​

When you know the amount they owe on taxes or registration, and you verified ownership, then head on over there to get a contract signed. This isn’t a comprehensive lesson on negotiation by any means. Getting a seller to sign a contract is a skill on its own; a selling skill.

This is a personal property contract. So a lot of investors either just type one out themselves, or they have the seller actually write you out my hand. Andy Teasley teaches this in his course which we have at www.pauldocampo.com. ​ ​

NOTE: I’m not an attorney. For knowing what contract to use, contact your attorney, or your state.

2. Find out if any taxes or registration is due and verify ownership ​

This can all be done on the county/housing dept website or a visit to the county/housing dept office.

Before you hand any money over to the seller, find out how much they owe in taxes or registration. Each state is different, but head over to your states governing institute for Mobile Homes (usually the Housing dept) and find out if your mobile home owes any back taxes or registration. (HCD if you’re in California for registration, and your county for taxes)

While you’re at it, check to make sure there are no encumbrances on property. Usually, ​ ​ if seller has the title with them it means they own the property free-and-clear, but you want to make sure there weren’t any liens placed on it.

In California, head over to your county tax assessor (either in person or phone, or website) and find out how much is due in taxes.

NOTE: In California, not all mobiles homes are under county property tax. Some are under the old system and that means they just pay registration to HCD. To know whether or not your mobile is under Property Tax or not check the decal # on title… if the Decal number starts with an “A” it means its NOT under property tax and you just need to make sure at HCD they don’t own any registration fees. If the decal number starts with “L”, it means it’s under the property tax and you’ll have to check through County Tax assessor to verify if they owe.

3. Head over to the park and get park approved and check how much is due for rent ​

Management controls whether or not you can buy the place. So be up front with them on your intentions. You might be in a park where the owner actually flips the mobiles himself and won’t let you buy them. If that’s the case, move on to the next park.

Ask if there is any back rent space due while you’re there

But, if they are ok with your intentions, then it’s preferred that you get a storage agreement with them rather than a lease agreement (they'll have their storage agreement). If they say no to your storage agreement, then you’ll have to go under their lease agreement. Just make sure you read it.

4. Re-negotiate if needed ​

Does you’re price with the seller included any back space rent or back taxes? If not, and the seller didn’t tell you about the default amount, you may have to go back and renegotiate if that amount is a deal breaker for you.

If not, then, head on over the sellers home and prepare to purchase your first investment.

5. Get a Cashier's check (or cash) and the proper documents ​

Once you’re approved, go exchange title for cash (I’ve done a personal check btw. It’s not mandatory to have a cashiers check or straight cash)

Depending on what state you’re in, the proper documents vary. But the regulating government body will be able to tell you the proper documents to buy and transfer a mobile home.

In California, you’ll need the seller to sign title, registration card (if mobile home is NOT under local property taxes. To find out, If decal number has an “A” in front f it, its NOT under local property taxes), bill of sale, and Multi-Purpose Transfer form.

You can get all the forms at HCD website.

5. Get a Tax Clearance Certificate ​

Once you get title. Send in for a tax clearance certificate (if your mobile home is under local property taxes; has a “L” in front of decal number). You can either stop by at the county tax assessor office and request it. Or send in through mail. Go to the Assessor website and download the form, fill out, then send in.

In California, the Tax Clearance Certificate is required to officially transfer title of a mobile home. Once you have the Tax clearance certificate you either go down to the HCD office (or the states regulatory institute that governs mobile homes) and transfer title with the rest of the documents (signed title, bill of sale, MPT form).

Now all these steps might seem little overwhelming, and if you prefer to just go through an escrow you may do so.

However keep this in mind if you do use an escrow: 1. It costs (anywhere from $200-500) 2. It can take longer for the seller to get his/her money.

If you’re seller is on a time crunch you might not be able to go through escrow as it can take a few days.

But, it does save the hassle of going to HCD or mailing everything in.

Rehab/Re-Condition First off..

It’s very easy to OVER rehab/recondition a mobile home. If you’re coming from the SFR industry you’re going to have this mentality of putting extra stuff and more quality things to raise the value. But, the value on mobiles doesn’t go up much with extras or higher quality material. Stick with the basics; basic paint, basic flooring.

I once spent $17 a square foot on a 2005 mobile home that was once used as a crack house. Every wall had holes, every door was chewed up, there was grease and grim everywhere, subfloor damage, complete kitchen makeover, and cats lived in it…. I considered that to be an expensive rehab.

You don’t need to do that unless the home needed some SERIOUS repair. A “hands-off” basic cosmetic rehab may range from $7-$10 a square foot depending on the price of your contractors (this is mainly floor, paint, hardware). If you need to do some subfloor work, reglaze counters and tubs/sinks, minor carpentry, roof work (assuming it’s a $200-$500 repairs), and small misc. things, then make it a $10-$12 a square foot repair.

If any major items need to be repaired like plumbing, electrical, HVAC, or major roof then add the costs of those individually.

NOTE: in extreme weather areas like the desert, some investors always add a central A/C. Some even replace the old single pane windows with double, however that can be an expensive repair for a mobile.

Go through a checklist of your home before hand : ● Are there signs of water damage at floor, walls, or ceiling? ● Signs of a leak? ● Any subfloor that needs to be replaced (soft spots?) ● Cabinets in bad condition? ● Water runs with no problems? ● Electrical problems? ● Does the front need landscape? ● HVAC working? ● How’s the water heater?

This type of checklist is something you can carry with you on seller appointments, and can be used as a negotiation tool if needed.

First and foremost the most important items that need to be absolutely fixed are functionality items (damaged floor, plumbing, leaks in roof, major leveling, water damage, etc, HVAC). Often, subfloors are damaged and roofs have leaks. So getting those repaired is a must. After you do that, it’s entirely up to you if you want to cosmetically fix it up or not.

Fixing with minor repair

And yes, you can sell it with NO cosmetic repair. Lonnie Scruggs, the pioneer of flipping mobile homes, did just that. He even kept the same carpet but just stretched it out a bit.

But of course, there are exceptions to every rule. So this entirely depends on the market that you’re in. If you’re in a market (especially luxury mobile home parks) where there is a demand for beautifully done homes, then you might have to give that to them.

Also, If you wanted to make a good impression on the park management it might be a good idea to do your best to get future deals your way.

On mid range priced homes ($30,000-$50,000), if you choose to do a cosmetic repair, most people just stick with plain basics: ● white paint ● The low cost laminate ● carpet in bedroom, vinyl in bathrooms… or even vinyl in kitchen if you choose). ● If you can reuse the counters, great. If they are a funky color you can reglaze the counters (this is more of a re-condition rather than a rehab).

Most investors hire handyman to do pretty much everything. But you still want manage them efficiently. This isn’t a detail “how to manage contractors” manual however, there are plenty of free sources online for that, and managing is skill that has to learned through experienced.

But, from my experience, you definealty want them to report to you on a regular basis. And have a timeline for them. Whatever you do, don’t pay them ahead of time. Get a bid beforehand and an estimated time of completion. Have them agree beforehand that if they go past that due date, than they start losing money on their bid.

Here’s a list of the items to repair in order so that things go smoothly:

1. Plumbing 2. HVAC 3. Electrical 4. Carpentry (doors, subfloor, windows, cabinets, etc) 5. Drywall 6. Paint 7. Floor 8. Finish (hardware, cleaning, misc)

This isn’t a manual on “how to fix mobiles”, that kind of info can be found online, and Andy Teasley teaches a comprehensive “how to repair mobile homes” section of his class that you can find at www.paul.docampo.com. Usually the handyman who’s familiar with mobiles can help you and if he's reasonable he’ll be a great source.

Now onto the strategy that can literally grow you (with time through compounding) huge wealth (even $1 million if you use a self directed IRA wisely).

Sell with Payments - Note Investing This is a cash flow strategy

But what’s the difference between this cash flow and renting?

You’ll never have to handle maintenance. You’re the bank. What you own is a piece of ​ ​ paper that says that the new buyers owe you.

This is the strategy that I primarily use, and can produce for you a massive ROI and large amount of cash flow very quickly.

I love this strategy because I become the bank and own a piece of paper that tells the world that the homeowner is obligated to me to pay a certain amount. You may or may not be familiar with note investing, but this essentially a type of note investment… Lonnie Scruggs was the pioneer of selling mobile homes on notes. Check out his material on Amazon.

So here’s what this is about:

1. You purchase a mobile home, 2. you fix it bit up (or not) 3. and then you resell with a down payment from the new buyer and a monthly payment with a fixed interest.

If you’re using your own money, you can get anywhere from 20%-50% Return on your investment, or more, a year.

And that’s from ONE deal. With ONE of these deals you can get $400 a month (or even $900 a month in higher-rent areas) and add to your portfolio $40,000 to your net wealth.

Then you do another deal, now you have $1000 dollars of cash flow total a month. Then another, then another, until you have secured yourself a very nice steady stream of income that is the most PASSIVE income you can find.

Because you don’t have to ever deal with toilets or tenants.

Of course, you may be thinking, “well what if they don’t make the payments?”. ​

Well here’s the quick answer to that… it’s not a big deal, it’s easy to fix, and you make ​ ​ sure from the beginning you’re putting in quality tenants with stable income.

Here’s the long answer… If your tenant starts to default, you’ve spoken to him/her about ​ ​ ​ the situation, and there’s no way of him/her paying back and paying you every month, then they are going to have to find another place. It’s just the way the cookie crumbles. I know it sounds harsh, but you and me don’t get a break from creditors,and that’s just the way life is.

So, if they are at point of no return, you politely kick them out.

But it’s not a bad deal on your end… because that means you get to extend the note ​ even further and lengthen your cash flow. Remember, this was a 10 year note. But if ​ they default on the 5th year, and then you find a new buyer to put a new down payment and create a new note with them… you just create an EXTRA 10 years of payments which means potentially DOUBLING your ROI DISCLAIMER: I hope that no one reading this turns this into a shark loan business, because that’s exactly why the Feds came out with the SAFE act, to protect consumers from predatory lending… and because it’s just plain wrong (if you are a predatory ​ lender, just know, that I regularly hassle, make fun of, use as examples, and look down ​ ​ ​ ​ ​ ​ ​ on those type of people in my daily emails… so don’t even sign up to my list, or ​ purchase our material)

You are a provider of affordable housing to people who can’t afford (or have the ​ credit) to purchase their own house and rather own than rent. Unfortunately, kicking a family out because they aren’t making payments isn’t fun and can be emotional. But, on a pure business operation and financial decision, it’s not bad on your money, it’s just a hassle and can be painful sometimes.

How to lessen your chances of foreclosing

You can dramatically decrease your chances of ever having to call on someones loans by properly, and legally, qualifying those you put into the home (also, a larger down payment secures people's interest in making sure they make a payment). If you can get over the idea/fear of ever having to foreclose on someone, and start buying these homes at big discounts, then you can start growing your financial freedom with one mobile at a time.

However, again, I’m not an attorney, but this steps into the laws of the SAFE act established after the 2008 crash. The Dodd Frank Laws were made to prevent predatory lending and it limits an investor selling through seller-finance. By consequence, it inhibits the traditional mobile home investors who sells on a note. How I, and many others, sell mobile homes on a note legally and abide by the Dodd Frank laws, is by using a licensed Mortgage Loan Originator. Mine cost $650 for each transaction and he even qualifies the buyer for me. But again, I’m not an attorney so you should consult with an attorney who specializes in the Dodd Frank Laws.

Selling

Now that you have you purchased your mobile home investment, and are getting ready to rehab it…

Selling it is ALMOST the same as flipping for a quick turnover. Everything from purchase to rehab. The purchase offer might be somewhat similar and rehab might be slightly different.

But, the biggest factor on the difference between a cash sale and selling with payments is…. They’re two different markets. ​

If you have two mobile homes that are exactly the same in the same park, and one you’re selling for all-cash and the other you’re selling for payments… they are going to be two different types of buyers.

The market that’ll be buying your mobile on payments is considered the affordable housing industry. They’re buyers who don’t have a lot of cash at hand and may be at a lower income level. They may only have $5,000 at hand, and make only $3,000 a month.

So, when deciding what you’re going to fix, know that people in the affordable house market might prefer a “handyman” special where they can save a little more money. ​ ​ Lonnie Scruggs loved these deals. He loved having good buyers who have some sweat equity into the property. They fix it up (if they choose) rather than you. Remember, when selling on a note, you don’t own the property any longer, just a piece of paper.

Qualifying

When you sell the property, it’s important to get your buyer qualified. To avoid any ​ ​ infringement of the SAFE act you must use a licensed Mortgage Loan Originator (MLO) to qualify the buyer. (Andy Teasley of MMNG, veteran real estate investor, teaches a different method in his class that we have on video).

What most investors look for in a qualified buyer is: 1. Income that is 2x more than their housing costs (rent space + note payment) 2. Stable and consistent income 3. Good credit or some investors will accept bad credit if it can be explained (or you can make good credit a standard. Some accept bad credit as long as there’s an acceptable reason) 4. No evictions

Explain to your MLO all the criteria and he’ll check the buyer and give him/her a thumbs up or a thumbs down.

After he says “yes”, you have your new buyer fill out and sign all the appropriate paperwork that I explained in the “How to Buy” section including a promissory note. Make sure you arrange how and where the buyer will be making payments to you (you can either do this manually or there are services out there that will keep track for you. I use Zimple Money).

Then trade keys for their down payment.

And there you go, you’ve just sold a home and now you are a note holder with some good monthly cash flow.

On qualifying people: I’ve had to disqualify very nice people and seemed to be ​ trustworthy but they just didn’t have enough STABLE income to support the kind of payment I was asking. I remember one being an Uber driver and he only showed $5,000 on his taxes that he earned the prior year. His explanation was, “most of my money I make on tips and I don’t claim that”. But I couldn't risk putting him in the house. I’ve heard it said a few times, it’s better to have your home sit vacant a couple more ​ months than it is to put a bad tenant in the house.

On the Promissory Note: it’s a contract that lays out all the terms of the note. You can ​ sell the house with up to 9.9% annual interest. You can write up your own contract, escrow might be able to provide one, you can find one online, or if you’ve taken the classes taught at MMNG you can get them there.The Promissory note contract will lay out all the terms, the interest, and payment date.

Disclaimer: I’m not an attorney. Consult with your attorney before attempting any of this ​ to obtain proper advice regarding the Dodd Frank Laws with appropriate paperwork

Financial Calculator

Selling on a note is a little hard to do without knowing how to use the financial calculator.

Without knowing how to use a financial calculator, it’s hard to calculate payments, principal value, and your yield. If you’ve taken Bill Tan’s class (an educator at MMNG event) or watched Andy Teasley’s class the next steps in pricing a mobile will be somewhat familiar.

What do you need learn on the financial calculator? The 5 buttons on top: N, I, PV, PMT, FV. Learn how to use those 5 and how to solve for one another

Financial calculator comes in very handy for not just creating mobile home notes, but for every other type of investment and in-home use as well (like checking to see if your lender is ripping you off). Every savvy and creative investor knows how to use this. It’s a must.

Now we’ll move onto how to market these wagons.

Marketing to Sell

There’s a number of ways to market for buyers.

Using an agent Although, not a preferred way of selling your mobile home in a park by a lot of investors, it is a hands-off approach. A lot of investors sell themselves because these mobile homes deals can be really cheap (like $5,000-$10,000) and in those cases in makes sense to NOT use an agent or all of your profit will be given to them.

But, if you can afford it, use them. Just make sure they’ve done many mobile home sales ,they understand the transaction of a mobile home, that they are from that area, and they work hard. Many agents are lazy, and just let homes sit.

FSBO If you decide to list it yourself, there a number of things you can do. One good way to find buyers is to contact all the agents in the area and let them know about your home, if you can afford paying them a commission. I’ve done this while the house was being rehabbed and have sold homes before construction was done.

NOTE: Check with your state if you need to be a licensed Salesperson to buy and sell mobiles homes for a profit. (If this is a concern for you. For some investors it isn’t.)

You can use a huge number of sources to market your property (use all if you can): ● MLS ● Craigslist (very good source) ● Facebook marketplace (very good source) ● MHVillage ● Zillow (and all the other free online site) ● Flyers around town ● Calling Other agents ● Calling MH lenders (they may have qualified prospects already) ● Calling other investors ● Take home box (for foot traffic) ● Banners

Marketing when selling on a note

When you’re selling on a note, you’re marketing to the affordable housing market. So make the downpayment and the monthly payments the headline/message of the ad. ​ They don’t care too much about the price, only if they can afford it or not.

(remember, if you choose to rehab, it’s IMPORTANT to start marketing right away. Signs up at yard. Ad’s online. Start building that list of people interested. Even show people while it’s under construction. I’ve sold a couple while they were still under rehab and it’s a great feeling.)

Next stop, since there’s a lot of wholesalers out there, we’ll go into how to wholesale these.

“Wholesaling” Them I know that a lot of the pro’s aren’t a big fan of this. Mainly because you leave a lot of money on the table if you can find ways to do it yourself.

But I included this section because: ● You might be a wholesaler who’s looking to help the lead and get compensated for your marketing ● You might not have any capital OR any private investors to help you purchase it ● You have too many projects at hand ● The park may not allow you to purchase it with a storage agreement without having a license (I have ran into this situation).

There are two types of buyers:

1. Investors 2. Dealers/Brokers

The investors are those doing these type of deals anyway. But, they aren’t going to pay ​ a lot for it. So if you’ve read the section on how to buy a mobile, then calculate out a purchase price and add you’re wholesale fee on top, or reduce the purchase price to include your wholesale fee.

But, keep in mind, that you’re dealing with low numbers and if you tie up a mobile home for $7,000 and add $5,000 to it for a wholesale fee, do you think that an actual mobile investor will pay almost double?

In most cases, the people who have wholesaled mobiles frequently, only get about $500-$2,000.

Dealers/Brokers will often purchase these as well. They see it as an investment and will flip it to their buyers lists. I have seen dealers/brokers pay a little more for mobile homes (with $5,000 wholesale fee) because they usually sell it right back to their buyers list. They often purchase these at higher prices than your usual investor.

The process of wholesaling

Trying to wholesale a mobile is a little tougher than SFR.

Because you really have to trust that the buyer (investor /dealer) will pay you. Or, you go into escrow, but that gets complicated. Because, escrow takes time, and your seller might want cash today. Going through escrow just so you can secure your $500-$2,000, might not be an option.

Or, You can trade cash for title THAT DAY and now you’re the owner of it.

I don’t recommend going through escrow. It can be cumbersome for just $500-$2,000 of pay. You’re investor might not like having to pay for escrow costs when he/she doesn’t have to.

If you trust the dealer and/or investor enough, the process becomes very easy and you can avoid escrow.

It’s as easy as tying up the contract with seller, and then contacting your investor.

Then from there, there’s three ways to get paid: 1. You pay the seller first for title, then sell the title to the investor with your added fee 2. You and the investor meet the seller and the investor pays the seller for title, and then pays you. (NOTE: paying the seller in a cashiers check or actual cash is best) 3. If the dealer trusts you enough, you take their cashiers check, go over to the seller by yourself with investors check to pay her for title, and give title to investor for your fee. 4. You hand over the lead to the investor, the investors closes on it and then pays you a referral fee

That’s it for wholesaling. Hopefully, if the reason you’re attempting to wholesale is lack of capital, you can eventually learn to raise investment capital from others (a hugely important skill in RE)

Mobiles on Land There’s quite a few investors that purchase mobile homes on it’s own land; where you own the parcel. The home can be on its own permanent foundation or not (although it if is it greatly increases the value of the real estate).

Many move into this market when the SFR market is getting crowded and there are fewer deals to be had with smaller margins.

In markets where the flip deals are getting slimmer, more investors and buyers, and prices are increasing, this is a good strategy to move into because these prices usually stay relatively lower than SFR. Also, in markets where it’s hard to find cash flowing properties, this can be a good strategy to move into fif you a buy and hold person, because the lower prices will grant you a better cash flow.

A mobile home on land where I’m from might go for $100,000-$200,000. Of course as investors we always buy on a discount, but even buying this at retail MIGHT give you cashflow (I don’t encourage that though when there are plenty of motivated sellers out there). Rents in the area are anywhere from $1,000-1,700.

Depending on how you pay for it, if you calculate out the management fee, vacancy, capital expenditures, and maintenance you can see decent cash flow. Not the huge amount of cash flow you see when you originate a mobile home note, but it’s cash flow for life on a parcel you own, and in an area with increasing rents.

If you wanted to flip it you certainly can. By adding a permanent foundation, a separate garage, and rehabbing the mobile you can dramatically increase the price.

Figuring out a purchase price depends on your exit strategy.

If you’re holding it, obviously looking at rents in the area is your first step. Then calculating out cash flow.

If you’re flipping it, then you would comp it.

Rehabbing this might be completely different than the section “Rehab/Recondition”. How you rehab it depends on the market and your goal. Holding on to it is USUALLY a lower quality rehab than flipping. And you might be in a market where they don’t care much about superior quality material.

There are no hard and fast rules on this. Like any industry in any type of product/service, what you sell is LARGELY dependent on what buyers are already buying.

Now let's say that you want something more advanced. Or you come across a lot of leads that need there mobile home moved… Then we’ll step into you last and more advanced strategy of…

Moving Mobiles The name says it pretty clearly of what this entails. But, basically, you purchase a mobile and move it.

Let’s say that a motivated seller calls you, and says he has a 2008 double wide that he’d like to sell and move out of his parcel because he has plans to build on it. Now what?

Well, there’s a few things that you can do.

You can:

- find a buyer for it (there are many retail buyers out there that are looking for newer mobiles to move into their lot… but coordinating that gets complicated) - Move to a park to flip in the park - Move to a parcel you own to either rent or flip

Often you can find many mobile home owners that have a mobile on their parcel or rented space that needs to be moved. Sometimes they are junk and you can’t do anything with it, but sometimes (depending on your counties age requirements on mobiles) they are very valuable.

This is more of an advanced strategy and I just want to make you aware of its possibility. If you’re interested in moving mobiles to your own parcel and building that piece of land to either re-sell or rent, then get in touch with your local investor that does it. Developing is a very advanced strategy but can be very profitable if the market is asking for it.

Know that each state and each county has different rules when it comes to planting a mobile home onto its own parcel. So before you make any “moves” on this, seek out more information.

This strategy can be highly profitable. But it does step into the realm of developing. Which is the pinnacle of RE. It takes a lot time, back and forth arrangements with municipalities and utilities. To find a mobile home transporter, contact your local dealer, find them Craigslists or your newspaper. I’ve seen a single wide for set up and transport quoted at $5,000. A double wide at $10,000. If the home is on permanent foundation that adds some costs as well.

There are obviously a number of things you can do as an investor in the mobile home industry. A lot more than what I’ve addressed here. But, let this be an intro to broader investments that one can put their money into. Because at the end of the day, what ​ matters is your return on your investment. Whether it be in real estate or in mobile ​ homes, it doesn’t really matter to me as long as my money is making money for me. ​

For all this is a big thanks for veteran creative real estate investors in my area who some I team up with at Millionaire Makers Next Generation to get you excellent, “non-guru”, quality education in REI.

For more information about mobile home investing or creative real estate visit www.pauldocampo.com

DISCLAIMER: We are not financial advisors and do not guarantee any success or return on any investment. The returns and the theories that have been stated here are only just that, theories and do not guarantee a certain return.