The Top 4 Mistakes Of Mobile Home Rehab Flippers

Welcome back,

This article is designed for the active or soon-to-be active mobile home investor buying and selling mobile homes to create a value in your community – for others and themselves. If this type of investor describes you then this is a must read article for you. In today’s post and video we discuss the top 4 mistakes mobile home investors new and old are guilty of making that can eventually lead to failing while investing in manufactured housing.

Before I really understood this mobile home investing business I was guilty of all of these mistakes more than once. Luckily I am still here and loving mobile home! Helping you avoid these mistakes is a reason this site exists; so that you do not have to go through the same hardening and stressful errors made by me and many others. Sadly, some jaded investors I have spoken with and not be in time to help them have forever a bad taste in their mouths with regards to mobile home investing because they failed to avoid these 4 mistakes below.

Don’t let these mistakes happen to you. Clarity is key.

The video below contains only the Top 4 mistakes investor’s make based on my experience speaking with frustrated mobile home investors and helping guide members of our Mobile Home Deal Maker Formula online training program. The video and list below are missing many other pitfalls however this list is the top 4 for a reason and should be taken seriously throughout your investing career.

For added clarity never hesitate to reach out to me at the email address below.

1. Overpaying:

Do you always know what prices to offer for every mobile home? You should. There is a specific formula for making sure that you always pay the appropriate price (never paying higher than you have to) in order to recoup all your investment capital back within a short period of time while still making the seller happy and agreeing to your win-win purchase offer(s).

Part Math & Part Art: The formula for your 1.) all-cash price and 2.) payment purchase offer(s) comes from:

  • Knowing your market and what buyers are paying for mobile homes locally
  • Understanding current repairs needed before you resell
  • Knowing your market in different months of the year
  • Understanding and approving the subject home, community, area, and neighborhood all meet your purchasing criteria
  • Knowing what the seller needs/wants and giving it to them

Armed with this data you and your company can now formulate, craft, and present your three to four valid win-win purchase offers for every seller and home you walk through.

2. Over-Improving:

Over repairing and over upgrading a mobile home is a common mistake made by eager and well-meaning manufactured home flippers. A general rule of thumb is to bring the home up to neighborhood standards. There are certain repairs buyers will accept not being completed. These “not as important” repairs are basic cosmetic clean up, painting, minor carpet replacement, and other light to moderate cosmetic damages.

In order for a fast sale you can typically sell a “cosmetically-challenged” mobile home to a happy and low-risk buyer for a discounted price and/or terms. Does this make sense?

Related article: Mobile Home Repairs and Risks

Some repairs that will send most buyers running for the hills are moderate and major structural leaks and repairs being needed at the time of resale. Understanding what repairs your buyers are happily willing to make and which repairs buyers almost never feel comfortable making will make your career much easier throughout every deal.

Before purchasing any mobile home needing a considerable amount of rehab… stop and think.

  1. Are there other homes and sellers locally that may be a better, easier, and more profitable next deal??
  2. Is this your first deal? If Yes, then aim for the path of least resistance and search for a mobile home needing only cosmetic repairs and clean up to begin with. Sites like Homeclick have lots of ideas on inexpensive DIY fixes. Make your first few deals ones that will set the bar for the coming years.

Investor’s Tip: Do not upgrade. Only fix what is broken.

3. Leaving bread on the table:

“John, you know pigs get fat while hogs [in this business] get slaughtered” is a quote recently deceased mentor of mine once told me. Don’t be a hog!

While I want all mobile home investors to be able to sell their investment mobile homes at a retail price I never want investors taking advantage of payment-type buyers… ever! Every deal should be Win-Win-Win between your seller, you, and your buyer.

Know what local buyers will pay and aim for the higher end of this spectrum while still making your buyer very happy at the affordable price and monthly terms of home ownership. Does this make sense?

4. Selling to a high-risk payment-type buyer:

Prescreen, prescreen, prescreen all your prospective tenant-buyers. You wouldn’t let some stranger have the keys to you car would you? Then why let someone in your investment mobile home without knowing them backwards and forwards. As investors we can only judge our payment-type buyers and renters from their past history, not from their future promises.

In the past I have been fooled and taken advantage of (many times) by deadbeat tenant-buyers who moved in and caused me a great deal of worry and headache. These mistakes were all mine and there is nobody else to blame. In reality these tenant-buyers should never have been allowed into the home in the first place. I was too new to see the BIG and little red flags staring me dead in the face.

Investor reminder: If you are selling your property for an all cash payment the only qualification you need concern yourself with in the park approval process for this buyer and/or any bank financing the buyer is aiming to obtain.

It is better to have an empty mobile home instead of a risky payment-buyer in the property not paying.

Conclusion:

Although this post touches on many of the mistakes investors can make while investing in manufactured homes, this type of affordable housing is quite forgiving to an extent. A health cash-flow can be figured into each property once resold and even if your profit is less than what you expected you should have ample wiggle-room between your purchase price and selling price to compensate a few learning bumps and lessons.

Mobile home investing in all 48 continental states is very possible. Your success is almost guaranteed if you are active daily, know what you’re doing, and avoid closing bad deals. This sounds like common sense however I make this point because if you’re considering this business know it is possible with hard work and determination. There is so much to know and I never want you to have any confusion, as confusion typically leads to a weak effort and misguided deals.

Over the last 12+ years I have made almost every mistake that can be made. If I can help you avoid these errors by checking out your deals. looking over your shoulder, or answering any questions never hesitate to reach out to me below. Remember that as investors we are hear to help society, help each other, and our communities. A long-term and profitable business comes from creating a value in the lives of others.

“If you help enough people get what they want, you will get what you want.” – Zig Ziglar

Love what you do daily,
John Fedro
support@mobilehomeinvesting.net

10 Comments

  • Ed

    December 15, 2014

    Didn’t you mean to say ” ….instead of a high- risk tenant buyer in the home . . . . ” ?

    • John Fedro

      December 15, 2014

      Hi Ed,

      Thanks for the typo catch. Edit made.

      Talk soon,
      John

  • Jimmy

    December 15, 2014

    Great post John. Do you suggest getting started with newer homes or older ones? It seems like the older homes are cheaper in price. That city looks beautiful as well. Safe travels.

    Jimmy

    • John Fedro

      December 16, 2014

      Hi Jimmy,

      Thanks for reaching out and the kind words. I have seen 1970 model mobile homes look better than some newer ones so do not let age fool you by the number alone. The home, the condition, the market, the size, the seller, the park and much more all come into play. I say make offers to purchase any home for sale under $22k. This is the formula I use and we always want the seller to sell for a win-win offer, whether it is to us or someone else. So older homes typically will cost less, aim for homes in the late 1970s through early 2000s for investment purposes. When you’re ready to hit the ground running in your area let me know so we can get started together.

      Talk soon,
      John

  • Risa Hotchkins

    December 24, 2014

    Hi John,

    With your help I am now on my 3rd mobile home win win deal in 2 months. 😀 Thank you for everything you do and your constant help and accountability.

    Love and blessings,
    Risa Hotchkins

    • John Fedro

      December 27, 2014

      Hi Risa,

      Thanks for commenting here. I am so proud of you and glad to hear about your deals. I will be here for you now and into the future as you already know. Keep up the great work and daily actions that you now are implementing. Over the next few months you will be learning and growing much much more… Plus we haven’t even gotten to mobile homes with private land attached. Again, do not stop or slow down and as always keep me in the loop about your business and all homes you are looking at and sellers you are speaking with. Also, we need to get you on video for an upcoming case study 🙂 If you’re willing of course. 🙂

      Talk soon,
      John Fedro

      • Risa

        December 27, 2014

        Yes, I am more than willing for a case study. Your are the best and I am truly grateful to be apart of the group. Anything I can do to help others.

        Risa 🙂