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A Guide to Flipping Mobile Homes Intro Thanks for Purchasing Our Book 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.
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