There is a little known niche in real estate investing. And that is investing in mobile homes.
But, what exactly is mobile home investing?
History of Mobile Home Investing
Lonnie Scruggs
The creator and the one who started it all with mobile home investing was Lonnie Scruggs often called the “Godfather of Mobile Home Investing.”
At the age of 41, he bought his first rental property in 1971. And he sold his last rental property in 2006…35 years later.
During this time, Lonnie was in the used mobile home business for 19 years (1986-2005).
Here he bought and sold mobile homes in parks on notes using owner financing. Similar to an auto loan transaction, buyers would give him a down payment and make monthly payments with interest until they paid off what was owed. This was known as a promise to pay or promissory note.
Soon this method of buying and selling mobile homes became known as the “Lonnie Deal.” And the money every month from buyers Lonnie liked to call “mailbox money.”
Books
Deals on Wheels
Lonnie’s book, Deals on Wheels, is the book to learn how to get started in buying, selling, and financing used mobile homes for cash flow.
Making Money with Mobile Homes
Lonnie’s other book, Making Money with Mobile Homes, is the other book to learn about investing in mobile homes which continues Lonnie’s journey as a mobile home investor.
Rachel Hernandez
As a student of Lonnie Scruggs, Rachel Hernandez is the successor to his system of buying and selling used mobile homes for cash flow inside mobile home parks.
Rachel (also known as Mobile Home Gurl) has been writing about her stories and experiences in mobile home investing since 2007 in her blog Adventures in Mobile Homes.
Here she continues to invest in mobile homes and shares her stories with her case studies and updates allowing Lonnie’s vision of mobile home investing to live on.
Book
Adventures in Mobile Homes
Rachel’s book, Adventures in Mobile Homes, is a modern version of how to get started in mobile home investing from her viewpoint as Lonnie’s student and her own experiences as a mobile home investor.
Her style of investing in mobile homes is slightly different than Lonnie’s style which is explained and detailed in her book.
Podcast
In addition, Rachel also has a podcast on mobile home investing.
Here she teaches others what she has learned from Lonnie while at the same time sharing her own stories and experiences.
Tony Colella
When it comes to buying, selling, and renting mobile homes on land, Tony Colella is the expert.
As a former police lieutenant, Tony started investing in real estate in 2001.
Also a student of Lonnie’s, Tony started buying mobile homes in parks.
Though after a while, he soon began to buy mobile homes on land. And got out of buying mobile homes in parks altogether.
Book
Investing in Mobile Homes with Land
Tony’s book, Investing in Mobile Homes with Land, details Tony’s journey into buying mobile homes on land and his experiences with them.
His details stories about how he acquired the mobile homes on land that he bought, how he financed them, the work involved to fix them up, and lastly how he filled them with tenants when he rented them out.
It is considered the book to read for anyone looking into investing in mobile homes with land.
Other Mobile Home Investing Books
For further reading, check out the Top 10 Mobile Home Investing Books which lists and details the best books out there on how to invest in mobile homes.
Also, there are book reviews where you can read about each book and its details.
What Is Mobile Home Investing?
When it comes to investing in mobile homes, there are basically two types of methods to invest in them:
- Investing in mobile homes in parks
- Investing in mobile homes on land
Mobile Home Investing in Parks
When it comes to investing in mobile homes in parks, you basically only buy the home but not the land where the home sits.
In this case, you own the mobile home as personal property (not attached to land). But not the land underneath the home.
As for the land, that is owned by the mobile home park.
You, as the investor, pay the park lot rent every month in the form of a lot lease agreement to allow the mobile home to stay on the lot.
As a mobile home investor, you receive money from the home by either selling it or renting it.
If you sell the home, you can sell the home in cash or for payments.
On the other hand, if you’re renting out the mobile home then you receive a monthly payment as rent.
Investing in mobile homes in parks is the technique used and taught by both Lonnie Scruggs and Rachel Hernandez.
Mobile Home Investing on Land
When it comes to investing in mobile homes on land, basically you are buying both the mobile home and the land where the home sits on.
In this case, you own the mobile home as real property (attached to land). So, you own both the mobile home and the land together.
As a mobile home investor, you receive money for the home and the land by either selling it or renting it.
If you sell the home, you can sell it for cash or for payments.
On the other hand, if you’re renting out the mobile home then you receive a monthly payment as rent.
Investing in mobile homes on land is the technique used and taught by Tony Colella.
Mobile Home Park Investing
Lastly, mobile home park investing involves buying the entire park.
In this case, the park purchases the land where the mobile homes sits on.
Regarding the mobile homes themselves, it will depend whether or not the homes are owned by the residents or not owned by the residents (which then are owned by the park or individual mobile home investors).
As a mobile home investor, you receive money from the lot rent received for each mobile home on the lot.
In addition, if you as the park owner own mobile homes in the park then you also receive money from the homes by either selling them or renting them out.
If you sell the homes, you can sell them for cash or payments.
On the other hand, if you’re renting out the mobile homes then you receive a monthly payment as rent.
Mobile Home Park Investing Controversy
In a recent episode of HBO Last Week Tonight done by comedian John Oliver, he goes over the state of mobile homes and mobile home park investing.
This has sparked much controversy regarding mobile home park investing.
As a hot topic of real estate investing, there is much to be said about real estate gurus who teach and what they don’t tell you about investing in mobile home parks.
Be sure you understand the truth about mobile home parks before you decide to get into it.
Mobile Home Investing FAQ
If you are ready and have your finances in order, mobile home investing can be a great opportunity to earn cash flow on the side. Though, you will need to thoroughly learn your market and have an exit strategy in place.
To make money investing in a mobile home, you will either buy mobile homes in parks or buy mobile homes on land. Here you have the option of selling the homes or renting them out. If you sell the mobile homes, you either sell for cash or collect payments until the home is paid off. If you plan to rent mobile homes, you receive money as rent for the mobile home.
This will depend on your knowledge and experience level as a mobile home investor. The number one factor that will determine your success is whether or not you choose to work in mobile home parks that work with your personality and attract the type of clientele you feel comfortable with. When it comes to parks, there are many different types of mobile home parks to choose from. So, it’s very important to learn your market beforehand.
Depending on what type of mobile home you’re looking for, it may be cheaper to buy a mobile home already built than to build one yourself. Usually, mobile homes that are built by the manufacturer are regulated by the federal government by United States Department of Housing and Urban Development (HUD) so you’ll need to abide by their standards if you choose to go that route.