Mobile Home Investments — How to Find Them Off Market

I’m going to assume here that you ALREADY understand and want to buy with a mobile home park or a mobile home trailer as a real estate investor (I’m going to break down those two differences as they are widely different).

So instead of giving you the spiel of why you should invest in mobile home parks..

Let’s talk about how to find, negotiate, and FUND these.

NOTE: First off, we should state here we’ve got the perfect letter to find these bad boys. A “commercial acquisition letter” built to speak directly to the owners of these. You don’t need many of them.

Mobile Homes: For Both Experienced and New

 

Dive into mobile home investing with just two allies by your side: knowledge and confidence. The realm of Single-Family Residences (SFR) might seem a world away from mobile home parks, but when you break it down, the art of the deal isn’t that different.

Whether you’re a wholesaler looking at SFRs or a syndicator scouting for mobile home parks, it’s all about finding the right opportunity and seizing it.

Now, if you’re a new investor and you’re thinking, “Mobile home parks are for later,” well, think again. Mobile home parks might sound like the big leagues, but with the right knowledge, they’re as approachable as any other real estate venture. And the payoff? Well, let’s just say that finding just one killer deal could set you up with a steady cash flow that would make your future self do a happy dance every month.

So, gear up, future mobile home mogul. With the right tools, a dash of courage, and a sprinkle of persistence, the world of mobile homes is ripe for the taking. And remember, it’s not about how long you’ve been in the game, but how well you play it.

How to Find Mobile Home Deals Off Market

Let’s shift gears and discuss the how-to of finding these gems. And guess what? We’re going old school.

Using Direct Mail

No, direct mail isn’t a thing of the past. It’s just that not many have realized the goldmine it is, especially in the mobile home investment world. If done right, it’s like fishing with dynamite. And the best part? It doesn’t burn a hole in your pocket.

Now, let’s break down this process:

– Pulling a List from ATTOM: Starting off, you’ll want a list of potential sellers. ATTOM Data Solutions offers a comprehensive list of mobile home parks and mobile homes. It’s the groundwork for this operation.

– Driving for Dollars: If you’re thinking, “I don’t want to spend on ATTOM!” – no worries. Get in your car and go mobile (pun intended). Drive around areas where you suspect there might be mobile homes or parks. It’s a bit more legwork, but sometimes, the old ways work wonders. Plus, nothing like a bit of reconnaissance to get the real feel of a place.

– Mail them “Commercial Acquisition Letter”: Now comes the direct mail part. Craft a compelling commercial acquisition letter that speaks to the owner’s needs and potential benefits. Remember, you’re not just looking to buy; you’re offering them an opportunity.

We’ve got just the right letter for you here:

Biggest key takes always for mailing:

  1. The message must be direct: DON’T be generis saying “I want to buy your commercial property”. Instead speak directly to their asset: I want to buy your mobile home park on…”
  2. Mail more than once
  3. Skip trace the Return to senders and find the right contact information

Cold calling

No body likes cold calling...

But fortunately for you, it won’t take many calls.

Cause mobile home park lists are small.

The best time to call them is AFTER you’ve sent mail.

Here’s a break down:

  1. Skip trace the list you pulled from ATTOM
  2. Call them referring the letter you sent them

Here’s a script for you to go by: 

**You**: Good [morning/afternoon], is this [Owner’s First Name]?

**Owner**: Yes, this is [Owner’s First Name]. Who’s calling?

**You**: Hi [Owner’s First Name], this is [Your Name] from [Your Company Name]. I hope I caught you at a good time. I’m calling in relation to a letter we sent you recently about your mobile home park at [Property Address]. Have you had a chance to look at it?

**Owner**: [Possible answers: Yes, No, I don’t remember, etc.]

**(If Yes)**

**You**: Fantastic! What were your initial thoughts on the proposal?

**(If No or I don’t remember)**

**You**: No worries! To jog your memory, our letter discussed the potential opportunity for [buying/selling/collaborating on] your mobile home park. We’ve been helping numerous park owners in the area with [specific benefits such as “streamlining operations” or “achieving better returns”]. We’re genuinely interested in understanding your goals and seeing how we can potentially collaborate.

**Owner**: [Their response]

**You**: I appreciate your feedback. Our main aim is to create a win-win scenario for both of us. If you’re open to it, could we perhaps schedule a more in-depth chat to discuss this further, maybe over coffee or at a time convenient for you?

**Owner**: [Their response]

**You**: [If positive] Great, let’s set up a time. [Proceed to schedule a meeting]

[If negative or hesitant] I understand your concerns, and I appreciate your time today. If you ever change your mind or have any further questions, please don’t hesitate to reach out. We’re always here to help!

How to Negotiate Mobile Home Park Deals

Mobile home park deals require a particular blend of analytical rigor and human touch. But before diving into the soft skills, let’s get down to the nitty-gritty, the numbers that drive these deals: NOI (Net Operating Income) and CAP rates.

1. Determine the Real Value: Start with the NOI. It’s the annual revenue from the park minus all operational expenses. But, don’t take the seller’s word for it. Review the financial statements, verify income sources, and validate every expense. Remember, a higher NOI increases the property’s value.

2. Crunch the CAP Rate: The Capitalization Rate (CAP rate) is a metric that gives you the potential return on your investment. It’s the ratio of the NOI to the property’s current market value. In simple terms, if a mobile home park’s NOI is $50,000 and it’s listed for $500,000, the CAP rate is 10%.

3. Target the Ideal Yield: When you’re syndicating and doing the heavy lifting, what return should you promise your investors? Some might be content with a 6% yield, given the relatively stable nature of mobile home parks as an asset. But many investors, especially those used to higher-risk, higher-reward scenarios, will look for 9% or more. Gauge your investors’ appetite and set expectations accordingly.

4. Understand the Seller: With the numbers in hand, shift focus to the person across the table. Why are they selling? Personal reasons, market predictions, or something about the park itself? Unearth their motivations; they’re golden nuggets in your negotiation journey.

5. Build Rapport: Deals are not just made on numbers but on relationships. Cultivate trust. Share experiences. As the adage goes, people like doing business with those they like.

6. Employ Leverage, but Balance with Fairness: With NOI and CAP rate knowledge, you’ve got leverage. Use it. But also be fair. A deal that’s skewed heavily might close, but it might not be sustainable or amicable in the long run.

7. Think Outside the Financing Box: Sometimes, the unconventional path leads to the treasure. Explore seller financing, partnerships, or lease options. An unconventional approach might just make your offer stand out.

8. Be Ready to Walk, but Also to Return: Know when a deal’s not right. However, also remember, sometimes stepping away can make the seller reconsider and come back with improved terms.

9. Due Diligence is Your Safety Net: After all’s said and signed, don’t skip on thorough due diligence. This step will ratify all claims and ensure you’ve got no unexpected surprises waiting.

The dance of negotiation in mobile home park deals blends hard financial metrics with the softer nuances of human relationships.

As you step into this world, let the numbers guide you, but never underestimate the power of understanding, rapport, and trust.

How to Fund Mobile Park Deals

Ah, the world of mobile park deals. A market of infinite opportunities, but, as with most good things in life, it requires some… well, cash. Or does it? Let’s deep-dive into the various avenues you can explore to fund these golden geese.

 1. Syndications

Syndications are like the potlucks of the real estate world. Instead of everyone bringing a dish, everyone brings some capital. This allows a group of investors to pool resources together and buy something more substantial than they could’ve individually.

In the context of mobile home park investments, think of a syndication as a partnership where you, the lead investor, identify the deal and manage the property, and passive investors contribute capital. In return, they get a slice of the ownership pie (and a portion of the profits).

2. Partnering with Other Investors

There’s strength in numbers, and in the investing world, there’s also capital. By partnering with other investors (also called private lending), you can tap into their financial resources, expertise, and networks. It’s like teaming up in a game where each player brings a unique skill to the table. While one investor might have the cash, another might have the expertise, and another might have the connections. Together, you’re an unstoppable investing machine.

3. Your Own Money from Wholesaling

One of the tried-and-true strategies in the real estate realm is using profits from wholesaling to fund larger deals. Think of wholesaling as the stepping stone; quick cash without holding onto an asset. Once you’ve accumulated enough from your wholesale deals, pivot and channel those funds into mobile home parks, transitioning from quick, smaller wins to long-term, passive cash flow.

4. Creative Finance & Seller Financing

Enter the creative zone of real estate financing. Instead of traditional bank loans, let’s think out of the box. Ever considered asking the seller to finance the deal? In seller financing, the seller acts as the bank. Instead of paying a bank, you’re paying the seller monthly based on agreed-upon terms. This method can be especially advantageous if banks are tightening their belts or if the property has some quirks making it less appealing to traditional lenders. The beauty of this method is its flexibility; terms are not set in stone and are negotiable between you and the seller.

Mobile Home Trailers — Investing Beyond the Concrete

Ah, the world of mobile homes. Not the parks. Just the homes. As we transition from our chat about how to fund the real estate equivalent of small towns (mobile home parks, in case you were wondering), let’s pivot a little. Instead of talking about the piece of earth these homes sit on, let’s focus on the homes themselves. These can be gold mines if you know how to navigate the terrain.

1. Lonnie Deals: Mobile Home Mastery Without Owning the Land

Lonnie deals are a curious and yet oh-so-simple method. The name may sound quirky, but the strategy is straightforward. Here, you’re buying a mobile home (often at a low price), sprucing it up, and then selling it with financing.

Think of it this way: Imagine spotting a neglected mobile home in a park. You see potential, so you buy it at a bargain price, give it a little TLC, and then sell it at a markup. But instead of asking for the full price upfront, you provide financing to the buyer. They give you a down payment and agree to make monthly payments with interest. Over time, these monthly payments (with the added interest) can end up being more than the home’s actual selling price. The kicker? You don’t own the land. You’re simply leveraging the home as an asset.

2. Mobile Homes with Land: Your Plot, Your Rules

Now, let’s up the ante. Here you’re not only investing in the mobile home but also the plot it’s resting on. This is a game-changer. Owning the land means you can rent out the whole package or even sell it outright, and often at a premium.

The strategy here is to buy both the home and the land, typically in more rural or suburban areas where land comes cheaper. Once you own both, you’ve got options:

Renting Out: Just like a traditional home, you can find tenants to rent out your mobile home. And because you own the land, you don’t have to worry about lot rents or park rules. Your land, your rules.

Flipping: Just as you’d flip a house, you can flip a mobile home. Improve the home, landscape the yard, and sell it at a profit. With both the home and land in your control, the sky’s the limit for adding value.

Wrapping It Up

Mobile homes, whether on rented land or your own plot, are versatile investments. They offer a more accessible entry point compared to traditional real estate and can yield impressive returns when played right. They may not have the same curb appeal as a suburban McMansion, but in the investment world, it’s not about the glitter. It’s about the gold. And trust me, mobile homes can shine just as bright.

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