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Mobile Homes - The Potentials
| | Monday, March 08, 2004 @ 08:00 AM EST
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Contributed by: S N
S N Properties
Read more archived articles about Buying
I thought I will write about the tremendous opportunities which lies in mobile homes..Lot of people see it as a depreciating piece of clunker.
But if you know what you are doing it can provide quite a yield.For people new to the Investing,this can be a start too as it takes very little money to buy and turn around and sell a mobile home.
Lets take an example of how this works.You go and buy a mobile home for say $2000(yes the price is very much possible!).You put in some repairs for say $500 at max.You have a holding cost of say 3 months
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lot rent at 300 each month(just as a cushion!).Add ads for $60 Your total cost is 3460.You sell it for 6900 with a 500 down and holding the note for 6400 at 12.75% for 48 months.Just calculate your awesome yield!!.Thats tremendous return for a few days of effort.
Now that we realize the potential for mobile homes,How do we find the deals?
1.Drive around the mobile home parks.This is perhaps the best way for a beginner to get their feet wet in the business.while driving around you observe the different types of mobile homes.The singlwide and the doublewides,their makes and basically it will give an idea of what you are looking at.
Now you have identified a few parks in your area.TALK TO THE PARK MANAGER/OWNER.I cant emphasize enough on the need to cover this very important criteria to make your mark in the mobile home industry.Talking to the park owner you can introduce yourself as a kind of bank which finances for used mobile homes and say how you can help the park.Remember that when you convince the park of your intentions and that you are there to help the park too to get site/lot rent,They see that its a win-win situation for all.
Having convinced the park owners that you mean business,start knocking on the for sale by owner signs in the park.Dont buy right off the bat..Thats a sure sign of biting off more than you can chew!Find out what the seller wants for the mobile home!Remember if you speak you lose.Let the seller come out with the price they want and go through a few FSBO signs before you understand the mechanics of the price,age of the home correlation.
Now you have a fair idea how much to give for a mobile home based on its condition,age,and the size.This is the time you go and talk to the potential seller(s) again.Always use these words as the close of your negotiations irrespective of how less you had bargained earlier..."If I pay in cash,whats the best possible price you can give!!" Let them decide after that.Mostly you will get the mobile home at the price you wanted.Usually at the 100o to 2000 price I mentioned(prices are for singlewide.Doublewides the price maybe higher and the average age of the home maybe 10-15 years or so).Remember we should always buy the mobile home at wholesale price(All the depreciation and decreasing value you should quote when you buy the mobile home!) whereas you sell at retail which is usually at a higher price obviously. But whats your finepoint?Holding a note and financing for people who normally dont get a break from any other finance company or they get at very stiff terms!
2.Other ways to find potential deals are other than the regular newspapers,to scan the free publications like the pennysaver or the flyer and so on.
Usually the people who want a mobile home scan these for finding reasonable mobile homes.
The buyers of these mobile Homes are usually single moms ,newly weds trying to start their lives with a starter home and in case of 55+ senior parks,older people who look at it more as a retirement community!
when you are ready to sell,this is the place you advertise your homes too.Put in a word with the park manager too that you are selling the mobile home and be generous in passing a tip or commission to the park owners for finding you the buyer.It will not be a bad idea to place a test ad in one of these publications to feel the pulse of the market.
Read all the relevant books like DOW and articles so that you have enough information to make a intelligent decision on a buy! Remember you make your money when you buy!
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