Investing in mobile homes is a potentially lucrative opportunity that real estate investors can tap into. My guests today are Jay and Samera, the hosts of Trailer Cash Academy. Since they started investing in mobile homes throughout the country, they’ve completed over 400 mobile home transactions. Through their webinar and YouTube channel, they now teach new investors how to close their first mobile home deal. In this episode, we find out more about the journey of this successful real estate couple.
Jay and Samera consider themselves serial entrepreneurs as they’ve started a lot of businesses and done a little bit of everything. Unfortunately, their foray into real estate investing didn’t start on the right foot. They found themselves out of $90,000 after buying a burned-out home and investing with a mentor that later didn’t pan out.
Not wanting to sit around and spend years working to pay off the $90,000, they decided to learn their way out of the situation they got themselves into. Following a ton of research, they saw opportunities in mobile homes. Taking another risk and banking on themselves, they made the pivot into mobile homes.
Following the unfortunate start in their real estate journey, Jay and Samera realized they needed to educate themselves. It also took a while for them to learn to trust each other and trust other people. But eventually, they found the right mentor.
Mobile home parks presented the potential to bring in a lot of value as most owners are in the business of renting the land. Jay and Samera did driving for dollars to find deals, but they also sometimes talked to park managers and looked for people who needed their help.
Most mobile homes could be bought for under $5000. Although it could be more costly in other cities, you could still find deals for $5000. Jay and Samera even had students who got started with just $500.
Unlike single-family homes, you wouldn’t be spending $10,000-$20,000 for rehab. The maximum that Jay and Samera would put in a mobile home is $5,000 in repair costs. All that is important is making sure everything is working and in an adequate state.
Mobile homes could be valued at around $20,000-$30,000, but they would sell it for a little bit below market like $18,000. Buyers often see the bargain price and see that there’s still a lot of room for them to work on the home. This way also they can flip it very fast and get the deal done in under 30 days.
Most distressed sellers are likely 3 months behind on their lot rents. With lot rents costing between $500-$700. Investors might have to shell out $1,500 to cover the back rent. Following the sale, investors would probably average around $5,000- $10,000 in profit per deal.
Sometimes though, an investor could get a mobile home for free by paying the unpaid lot rent, or in the case of one of the students of Jay and Samera, one seller was willing to offer their mobile home for $1 just so they could get rid of it.
When it comes to looking for mobile home deals, target working-class places like Sacramento, California. Mobile homes there range between $20,000 up to $100,000.
For homes worth $80,000, don’t expect that the owner would just give it away for free. Leverage your time and knowledge to help them solve their problem and then get paid for your efforts.
Figure out their motivation and focus on sellers that need to sell in 30 days or less. Those sellers might be okay with walking away with $30,000-$40,000 for their home, which you could then sell wholesale for $50,000-$60,000.
Just because someone is giving away a free mobile home doesn’t mean you should take it. That home might need $10,000 or more for rehab costs, and you would just find yourself stuck with a home you can’t sell and paying the lot rent.
While the process is simple, it doesn’t mean it’s easy. Avoid underestimating rehab costs by finding the right contractors for mobile homes.
Jay and Samera would usually vet contractors and require at least 1-2 years of experience working specifically on mobile homes. Also, contractors should be able to provide licenses.
When it comes to working with contractors, it’s about building that relationship and making sure they’re doing the things to say they’ll do. It’s best to tiptoe your way around handymen until they prove themselves. Once contractors have proven themselves, you could then give them more business.
Due to the pandemic, some families have to sell their homes quickly while some have had to downsize. This event has actually been helping their business because there is a lot of movement in the market, and there is more demand for mobile homes as most of the people who lost their jobs are blue-collar workers.
Most of the time, when an individual is starting to learn something new, they go to YouTube. So Jay and Samera decided to create content for things that people are looking up online.
Each day, they receive lots of messages from people asking them questions. So they came up with doing 30-45 minute live streams so that their views can get real-time engagement.
While there is no rating system for mobile home parks, Jay and Samera created their own 5 rating system. A 5-star mobile home park looks similar to gated, single-family home communities that are free of trash and debris.
Unfortunately, some mobile park owners don’t care and are only interested in collecting rent. Those parks tend to be covered in graffiti and have homes that are run down. So Jay and Samera prefer to invest in 3 to 5-star park communities.
Jay and Samera are now looking into getting into land and transforming their relationship with their students into their partners in the business.
First things first, in any type of investing, educate yourself.
But once you have the knowledge, don’t wait to take action with what you have learned.
Leverage other people’s money, knowledge, experience, and time. Don’t be too single-minded and in the competition that you’re not willing to collaborate with others.
Clint Coons is one of the founders of Anderson Business Advisors, a firm that specializes in creating asset protection entities…
Justin is a real estate investor who has done almost 2000 deals across the nation and in this episode, he’ll…
David is a real estate investor and a real estate coach. He has been investing in properties for almost 20…
Andrew, a real estate investment developer, is the owner of IronGall Investments, an Austin, Texas-based real estate development company. They…
Chris is the President and CEO of Smart Growth Inc., a California-based real estate and development firm. They are focused…
Rafael is a real estate coach and an organizational psychologist based in Miracle Valley, Arizona. He owns several real estate…