This article originally appeared on REI Club by Rachel Hernandez.
I am often asked the question, "How do you make money investing in mobile homes?"
The short answer is: There are plenty of ways.
Though, it will depend on your comfort level, time, money, skills, experience and overall goals.
Before starting out you need to assess your plan and exactly what you need to do. For example: Are you trying to build up cash? Or, are you ready to buy and hold? How much time do you have - do you want to be hands on or hands off? What are your skills?, etc.
Once you know your goals, then you can decide how you would like to invest in mobile homes.
Here are 6 Ways to Make Money Investing In Mobile Homes:
1. Buy, Sell and Finance - Be the Lender.
This is a good way to invest in mobile homes if you're looking for consistent cash flow and don't necessarily want to deal with the issues of being a landlord. Basically, you buy a mobile home and sell it offering seller financing The buyer gives you a small down payment and then makes payments to you for the duration of what is owed. In this scenario, the buyer is responsible for all repairs on the home - you just collect payments.
2. Buy and Hold - Be a Landlord.
Buying a mobile home and renting it out is another way to make money investing in mobile homes. Some investors simply want to continue being landlords because they don't want to sell their properties and just want a continuous source of cash flow. The good thing about mobile homes is that they are less costly than regular homes which means less costs for things such as taxes, insurance, etc. If expenses are lower, it will leave more cash flow on the table. Being a landlord will require access to cash to purchase the mobile homes as well as the usual cash reserves needed as a landlord.
3. Buy and Sell Retail.
If you're looking to make some money and don't want to hold, you can buy and sell retail. Again, the advantage of mobile homes is that they are less costly than regular single family homes. Remember, if you are selling retail you need to make sure you know your market well before you buy so you'll know what you can sell the home for. As in any type of retail venture, figure in a conservative amount for repair and holding costs.
4. Buy and Wholesale - to Other Investors.
If you're looking to build up some cash and want to sell fast, you can always buy and wholesale to other investors. If you are planning to wholesale, be sure you have a buyers list and criteria from your buyers of what they are looking for, how much they want to spend and what areas they will buy. Also, you will need to put in the time to research and learn your market so you know what you can as well as what your investors can sell for.
5. Private Money - Be the Lender to Investors.
If you have money but don't necessarily have the time to look for deals and want to grow the money you have, you can lend money to other investors.
Since mobile homes are less costly than single family homes, it will require a significantly less amount of cash. As the lender, it will require less time and is hands off - you just collect payments. If you are going to be lending money, be sure to have a criteria made up of exactly how much you are willing to lend, the rate of return you would like, etc. Also, make sure you are comfortable working with the investor(s) you choose to work with. Interview them, spend time with them and learn more about them and their goals. Remember, the investor(s) you are working with need to make money too. Make it a win/win situation for everyone.
6. Bird Dog - Look For Deals for Other Investors.
Being a bird dog and looking for deals for other investors is a good way to get started and learn hands on with the least amount of risk. It does not take a lot of cash though this will require a significant amount of time and commitment on your part - you will need to put in the time to research your market and create a marketing plan to find deals. Also, you will need to locate other investors who are interested in investing in mobile homes - build a rapport with them and get their investing criteria. Compensation will depend on the arrangements you have with the investor(s). Be sure to check laws in your area regarding this issue. Remember, you are simply trying to learn and get the experience here without taking all the risk. Once you have the knowledge and experience, it will help you to push forward with your investing goals. Knowledge is power.
So, there you have it - 6 Ways to Make Money Investing In Mobile Homes. As you can see, there are many ways to make money investing in mobile homes. Time, money, skills, and experience are all factors to consider. Overall, always keep your goals in mind.