Mobile homes and manufactured homes offer investors a great deal of flexibility and affordability when it comes to generating profits and creating value between buyers and seller. In this week’s article we will be focusing on some of the benefits to touring your city’s local manufactured home builders, dealer showrooms, and mobile home repossession lots.
Let’s first understand the difference between a mobile home builder, dealer showroom, and mobile home repo lot. In this article the terms mobile home and manufactured home will be used interchangeably.
Mobile home builder: This is the factory and typically distribution center for a particular brand/maker of manufactured home. These builders and showrooms are typically warehouse sized buildings that only offer one brand of mobile home. Examples: Clayton, Skyline, Fleetwood, Jacobson, etc.
Dealer showroom: This is a local dealer that owns a “lot” (parcel of land) with homes for the public to walk through. These homes may be brand new from the factory or pre-owned used homes. If any mobile homes are used they may be there due to a trade-in from a previous customer who upgraded to a newer home.
Mobile home repo lot: This is a local dealer that specializes in selling used mobile homes. Much of the inventory may be mobile homes which were repossesses from defaulted buyers. Some homes may be clean and rehabbed, while other homes may be sold as handyman specials. Look for the word “Repo” on the entrance sign or business card to identify these dealers.
Investor Tip: Over the past 10+ years investing in mobile homes I have managed to never purchase from a dealer. Dealers are middlemen between the owner-occupant seller and you, the investor. Dealers can provide you with some help however for the best deals aim to purchase all your mobile homes from owner-occupants themselves. Exception: HUD and bank owned homes.
Related: 5 Things You Didn’t Know About Mobile Home Investing (Including How The Last One Built Is Over 35 Years Old…)
What You Can Accomplish While Visiting with Local Dealers
Now that you have a basic understanding of where we can go to explore and walk-through some mobile homes, let’s discuss what you can accomplish while visiting with local dealers.
Know your product: Know what you sell. Although we are not investing in these specific mobile homes, we can learn much from them. Especially if you are newer to the manufactured housing niche, I highly recommend walking, touching, smelling, and looking inside and out of these new and used homes.
Network with dealers and ask questions: While you are walking throughout each home ask general or specific questions from the salesman about each home to better know the product, construction, financing, and features. Whether learning about their builder, local moving laws, their company, price specials, specific home questions – knowledge is power.
Get excited about the new amenities modern manufactured homes have: As an investor the average mobile home I invest in is roughly 10-15 years old. While these homes oftentimes have walk-in closets, skylights, kitchen islands, garden tubs, and even his and her bathroom sinks, these decade old homes pale in comparison to brand new manufactured homes, floor plans, and new amenities.
Get to know local movers: Dealers use mobile home movers all the time. Sometimes these movers work solely for the dealer and other times these movers are available for you to hire. Get to know what movers and handyman local dealers use and ask for reviews. In the future it may be wise for you to have these numbers in your Rolodex.
How mobile home dealers can work with you? Dealers often work with vacant land owners. Whether you have a vacant unimproved parcel of land, or a piece of land with utilities connected that’s ready for a mobile home, you have a valuable piece of property for the right buyer. Dealers often keep lists of land owners for sale in case qualified mobile home buyers need a vacant lot for their new manufactured home. Being open to selling your land with owner financing for a qualified buyer may help sell your land quicker than an all cash or bank financed sale.
Investor Tip: You likely do not have vacant land for sale right now. If you become an active investor that is well-known in your market you will inevitably find great deals on vacant land you decide not to pass up.
What can you sell to a dealer? Dealers are in a business to buy low, and sell high. If you can sell a dealer a mobile home for an attractive price many dealers will act quickly. While in the office find out from this dealer what homes they will purchase from you. Age? Size? Location? Price? Aim to speak with the manager in charge.
Give them permission to pass your number around: While I have never purchased a mobile home from a dealer I have profited from my relationships with dealers simply by being well known. Build rapport with local dealers and find out if they ever pass on purchasing homes for any reason. They will! If any mobile homes do not fit their purchase criteria, have the seller call you immediately. Encourage all dealers and their salesmen to pass along your name and number to any mobile home seller they do not help.
Love what you do daily,
John Fedro
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