3 Ways to Help Reduce Holding Costs While Mobile Home Estate Investing

An entire real estate transaction is made up of many pieces; a few of which are finding a deal, funding, fixing, paperwork, holding, repairs, marketing, selling, managing, communication, leadership, and so on. Each piece, like a muscle, should constantly be exercised and improved upon.It is for this reason that a real estate transaction is only as strong as the weakest piece in the chain of events.One of these is holding time and more importantly holding costs.Holding costs are any costs that arise from having to own the home from when you purchased until the day you sell or rent the home for a profit.

Our goal as real estate investors should be aimed at minimizing vacancy time for each property we control.Below is a short list of techniques and tricks that can help to reduce this carrying cost.

Iron out wrinkles in sales process:Know your sales process from start to finish.Know when and where you will advertise.Will there be open houses?Who will be answering your sales calls?What are the qualifications to live there?The buyer loves the home… now what?

One simple change I made was to instruct potential renters/buyers to fax me a copy of their credit reports in addition to their application.This process is another hoop for the tenant-buyers to jump through for the property and easily allows you to “pre” pre-screen every applicant without taking the property off the market while you wait for the background check to be returned.

Negotiate no payments:If you have utilized owner financing in a real estate deal when buying, request that you make no payments to the seller for 3 to 6 months.Asking for a delay to start the owner financing payments is a simple way to offset thousands of dollars in potential holding/carrying costs.

In my business I made it a mandatory policy to require a minimum of three months of payment free months to allow time to clean, remarket and fill the home (with a qualified homeowner) before any payments are made to the seller on the note we created to purchase the home.The goal here is to turn a profit via “thousands cash down and first month’s payment” from your tenant-buyer before you must pay money on your note.

Qualified buyers list:Continually be building a renters or buyers list.Whether you are planning to wholesale, retail or rent your properties you will need people that will give you money to occupy your investment property.

Most applicants looking to become renter or tenant-buyers do not stay available for long.That is to say that many potential renters will find homes within weeks, not months like traditional home buyers with conventional loans.My experience has taught that the few thousand dollars that a potential tenant-buyer or renter may save as an initial down payment or deposit does not remain in their hands long.Expect a renter or rent-to-own buyer only be “still looking” a short period of time; it is for this reason we must continually market and advertise for applicants (and there are always more applicants with money to spend.)

Happy Investi Fed

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