How To Get Started In Mobile Home Investing With Christy Duckett-Harris

 

Mobile home investing is becoming an increasingly lucrative asset class. That’s why in this episode, South Carolina Realtor Christy Duckett-Harris equips you with everything you need to get started investing in mobile homes. Get to know the key differences between the types of mobile homes and the six strategies you can use when investing. She also shares which key relationships you should be focusing on to run your business smoothly. Plus, Christy enlightens on using mobile homes for short-term rentals as a viable passive income business opportunity.

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How To Get Started In Mobile Home Investing With Christy Duckett-Harris

I want to say thank you to Stacy for having me on here. I’m going to talk about a hot topic that wasn’t that hot before but now, I’m finding out it is and that is mobile homes. My husband, Noah, and I lead the South Carolina Super Group every third Thursday of the month. If you have any interest in the South Carolina market, we teach multiple topics every month relating to the market or in general that you can apply in your market. Please jump on there.

We have two boys. We’ve been through the amazing experience of virtual schooling in 2021 and 2022, partially in running the business. It’s been a blessing to be in real estate because it’s allowed us the opportunity to be able to be with the kids and do the business, which, if you follow Stacy, it’s the same cool thing. We’re very parallel in that.

We’ve been investing since 2007. I started investing in mobile homes in 2009, back when they weren’t cool at all and nobody knew anything about them. I saw an opportunity that I feel like so many people didn’t want to mess with or understand. We’ll get into why I feel like a lot of people stayed away from them. I’ve been coaching since 2012. It’s a pretty awesome opportunity. I’ve been able to coach students all across the US and Canada. I was raised in a small town, if any of you know where that is in Culpeper, Virginia.

I was home over Christmas. My father still farms. It’s interesting and I don’t know if any of you have experienced this, but I went into the grocery store and was like, “There’s no food in the grocery store. This is crazy.” I’m so glad my dad’s a farmer because they have this big freezer in the basement that he had a cow butchered. I have so much meat. I’m like, “These are things I should bring back into life outside of the real estate.” I went off to college and got my degree in Psychology. I love it.

Real estate is all about the people and that’s why I’ve done well in this because I love people, helping and making it a win-win. My husband and I live in Columbia, South Carolina, which we love. We got snow for the first time in several years and it was pretty exciting. I’m a huge believer in educating. I feel like whatever you do in life, you have to know what you’re doing or you’re going to make a mistake.

You need to find the right people. That’s why I love being affiliated with Stacy because she’s got so many great things for people who either are starting in real estate or have been investing. There’s something for everyone. I jump on these to say, “I haven’t wholesale land in a long time. Let me look at that option.” I’ve done short sales but do I know the ins and outs? There’s a great information base here.

My big passion is helping others and sometimes too much. I’m one of those that gives all of her time to help anyone with a problem and conversation and it’s important. That’s why we’ve been so successful in real estate. We get a lot of referrals. I love keeping it real. Those of you feel the same way. It’s like, “Enough of the fluff. Let’s be honest and transparent.” Your business helps your life. Everything I tell you is pretty direct because I want to help you.

Top 5 Reasons People Don’t Invest In Mobile Homes

My married name is Christy Harris. You’ll hear people exchange Christy Duckett or Christy Duckett-Harris. It’s all me. I’m the same person. It depends on how long you’ve known me. I’m one of those that got married very late in life. For those of you that have not watched the show, you should, but I have a picture called Trailer Park Boys. I always put this in my presentations because it’s so funny. It’s a Canadian show. I did a Canadian presentation and everybody there knew exactly who they were, but it’s on Netflix. It is a comedy on trailer parks, but everything is very accurate.

Noah loved that show forever. I bought him tickets to go see these guys. There’s always one guy that’s always trying to take over the park, which is Ricky. I laughed because every park that I ever owned was the same situation, characters and people. We got to meet these people in real life that act it out. Ironically, I had a scarf that was the same material as the guy’s shirt and he’s like, “Good taste.” We thought that was so funny when we went down there. He was funny because he said, “We act this out, but I’ve heard these mobile home parks can make a lot of money.” Everybody’s on board with this.

Why do people not invest in mobile homes? For the longest time, I understood it. Everyone looks at a mobile home like, “Turn on the news. That’s the first place that blows away in a hurricane or tornado.” Shockingly, I saw a student within an affiliation where I coach who owns a mobile home park down in Fort Myers, Florida. A tornado came through and blew the entire thing away with some houses as well. I’m like, “This is why people stay away from the stigma of thinking this always happens,” but that’s not the case.

If you own any real estate, different weather patterns are happening everywhere. It’s the connotation of it being a trailer. It’s a bad thing. People don’t pay their rent. They’re low-income. It has a very negative image. If you’ve been in an older mobile home, it wasn’t as nice as the newer ones. People tend to stay away from what they don’t know. They don’t know because for a very long time, there was no education piece out there teaching people like, “These are great investments.” You only saw the bad things when you turned on the news.

 

They also had an issue. When I coach people, they’re like, “I don’t understand how to estimate repairs. Am I buying all the same parts that I’m buying at Lowe’s for the mobile home? Does it work the same? Do I need a licensed GC? Can I use a handyman? Do I need to find someone mobile home specific?” These are a lot of questions I get. Most people go watch YouTube or Google things to find out, “What do I do?” There wasn’t a lot of accurate information out there on mobile homes. People stayed away.

Unsure how to value the home is another thing. It’s very interesting. I did a Zoom interview with a local mortgage broker who predominantly does mobile home mortgages. She’s down near Charleston, South Carolina. For you that are familiar with Charleston, that market is blown up. She said, “When I started in mobile homes years ago, you couldn’t even give them away to people.” Some people bought them, but most people stayed away from them. She goes, “Now, what I’m seeing is the values of these mobile homes have doubled and tripled and as expensive as a single-family home. There’s newfound respect to them.”

I said, “Yes. You can comp them out.” In most people’s minds, a mobile home is like a car. It’s a depreciating asset. People say, “I’m not going to buy it because there’s no true value future-forward. It’s not appreciating.” People forget that there are mobile homes attached to the land and we call them detitled.

When that happens, you’re getting the home on the land. It creates value climbing. You can pull comps like a house. There is some value within that, but there was some uncertainty and a lack of education. There are not a lot of educational sources out there. During the pandemic, I was like, “This is the time. I have time to sit down, write a course and teach people about mobile home investing. I’ve been talking about it for so long, but there are still not a lot of great resources.” There’s stuff out there, but there’s also still some misguided information.

Those are the top five why people have stayed away from them. I’m finding it here and we all know this because we’re all experiencing it. We know the properties are out there, but if you’re going to the MLS, there’s a shortage because everyone’s going there. Inventory is still low. You’re seeing people going after mobile homes. It used to be that mobile homes were sitting on the market forever and then they were flying off the market. I’ve known some ways to market into those to get them, but it’s interesting how everything’s come full circle, which I knew back when I started in 2009. I didn’t know what was going to happen, but I was like, “Somebody is going to figure this out.”

The Difference Between A Mobile Home, Manufactured Home, And Modular Home

What’s the difference between the types of mobile homes, manufactured and modular? I say mobile homes a lot and I should smack myself on the other hand because a mobile home is not always a manufactured home. A manufactured home is what you should be calling everything that was built after June 15th, 1976. What happened is anything created before that is an actual mobile home.

They were not made to a certain standard before 1976. You were able to come in and be like, “Here’s the mobile home.” If you’ve ever looked at an old one, it’s almost like the walls are detaching. It looks very cheaply made. That typical mobile home that you’ll see in a park that has the wheels, axle, concrete block, everything underneath it is a mobile home.

After 1976, HUD came in and said, “We’re going to have guidelines where we have to come in and make sure this is built to a certain standard.” That’s when they took on the term manufactured home. Anything past that point, you should be calling a manufactured home. The reality is I still interchangeably use mobile and manufactured, but that’s the only difference. There’s a HUD sticker on the manufactured home, whether it is a single-wide or a double-wide. A double-wide should have two HUD plates on them. When you come in and hook the manufactured home up, the utility connections have to be inspected by the city or county inspector. That’s the difference with that.

With a modular home, it’s completely different. It is like a real house, like a single-family home, even though it’s still built in a factory like all of the rest. These are all built-in factories in pieces and then pieced together. You’ve probably passed them on the interstate, trying to get around them and you’re stuck, especially on a two-lane road, which is frustrating.

Sometimes, you can’t tell the difference when you go into a manufactured and a low-end modular, but some of the modular homes are very high-end. They are built to the same standards as a single-home. They have to go through code inspection and all that. They can be comped out against single-family homes, whereas manufactured homes, you have to comp out with a manufactured home.

For those of you that have never been in a single-wide or double-wide, I’m going to give you a typical floor plan. I highly recommend that you go and view an old mobile home, an older manufactured home, a newer manufactured home and go walk them. We’ll talk about building relationships with mobile and manufactured dealers, which is important, but you need to understand what you’re getting into and what they look like.

[bctt tweet=”People tend to stay away from what they don’t know.”]

You’ll be in shock because when you go look at some of the new single and double-wides, they’re as nice as a regular home, but these are factory-built. They have different sizes, so 18×90 or less, 14×80 and the older single-wides are very common. I find that the double-wides are more appealing to people that are buying them. If you’re looking to flip, I’m not saying you can’t flip a single-wide, but the double-wides are more appealing to people because they’re larger and they look more house-like. A 3-bedroom, 2-bath floorplan as always, gives you the best return on investment.

When you’re renting the single-wides, the two bedrooms do very well too. It depends on where it’s located in your market analysis. Don’t shun away from those. We’ll talk about renting and flipping them. There are different strategies we use within this. What’s cool is I’ve added a bonus session in here on Airbnb-ing a mobile home. That’s cool. Rachel is going to talk about higher-end luxury short-term rentals. I’m going to talk about the mobile home rental that can still make you money in the short-term.

The next one is double-wide. Double, meaning two pieces. These are building the factory in two pieces and then taking into the piece of land and set or in a park. Typically, on the double-wides, once they’re placed on the ground, it’s very rare that they are ever moved. They stay there forever. They’re two separate pieces with two separate VINs. They’re larger and have an actual seam down the middle where the two pieces are seamed together. We flipped a lot of those.

These are important. I’ve had people that I’ve coached go, “I bought a manufactured home and there’s no HUD tag. The data plate is gone. What do I do from there?” The metal plate I was talking about typically is red and gray, but if it’s an older manufactured home, it’s not going to be because the sun’s faded it out. You’re looking for that metal plate.

If you can’t find that and it’s not on there, I’ve had people tell me before, “If you buy that, you can’t replace it.” That is untrue. There is a website you can go to, which is IBTS. They have a website where they can send you a new data plate and a HUD tag. If you’re flipping and selling a home to someone that’s getting financing, it has to have that tag on it. You have to get that.

Is it real property or chattel? What does that mean? “We’ve heard these terms, but I don’t understand.” Real property means that a mobile home or manufactured home was set on a real piece of property like a real piece of land like a house and then it was detailed. Every manufactured or mobile home comes with a title, like a car title. Once you decide to attach it and permanently affix it to the ground, it becomes real property. It becomes a single-family home with a tax ID number and all of that. When you pull the county tax record, you’re going to see that in there versus going in and seeing that it’s on a title.

Chattel means it’s still on a title. The land is not owned and attached. It has moveable pieces underneath it, but it is a car. The mobile home or manufactured home can be moved again to another location. That’s important to know and to know if it’s detitled because if you’re flipping a house to someone that has to get financing, there are different ways you can get financing, but if it’s not real property, you might not be able to get financing.

FHA, Freddie Mac, Fannie Mae and VA loans will finance manufactured homes depending on their age of them. It’s important to get a mortgage broker on your team that understands mobile homes, but the chattel loans are slightly different because it will have a high-interest loan. Some banks will lend, but the age of the home dictates that too. You have to know the difference b what you’re buying.

How to value or pull comps? If you’re buying the house in the park and it’s an older home, there’s not necessarily a process for pulling comps on that. It might be looking and seeing what’s selling for it in the park. What will someone pay? If you’re looking at how to value and pull comps if it’s a true manufactured home and real property, an agent to pull comps for you off the MLS is the best way unless you’re using some of the other sites.

You want to look into local city-county rules and regulations because people will buy the home and think, “I can do whatever I want.” In your mind, it’s like, “It’s a piece of real estate. It’s like a house.” It’s not. You’ll see this if you drive through downtown Columbia. If you drive two minutes out of downtown, I’m not even kidding. You can still see the city skyline. You’re like, “There’s a mobile home park. What the heck?” Trust me, that mobile home park was there long before half of everything else. That’s the problem. They can’t boot the mobile home park out they’re trying to.

If you were to buy a home in the location, you might not be able to move that home out and in because there are certain grandfather clauses. You want to talk to someone in the mobile home department and find out, “Can I do this or can’t I?” This is super important because you can buy something you might not be able to do anything with and then be stuck.

 

The buying paperwork is different. If it’s a piece of chattel and sold-on title, you’re going to need a bill of sale. That comes from the DMV. Some states are different, but you can pull up your DMV website and find that. The bill of sale is if you’ve ever owned your car outright and you’re selling it, it looks very similar to one. Sometimes, it is the same one in some areas.

You need to know the financing to sell. Annie was talking about, “I love seller-owner financing.” She was going through how to do that in different things. We also own our finance homes to people, outright buy them and sell them for cash, wholesale them and do a little of everything. Knowing your exit strategy is super important because you want to make sure you’re buying right but remember, it all comes down to selling right as well.

In this market, it’s crazy. You could sell mobile homes for cash way above because people are learning, “These are great rentals. I can pretty much rent them the same as a house.” They’re becoming this great commodity, too, but you want to buy right. Mobile home supply stores are super important. People stay away from these because they don’t know how to renovate them. They go in and say, “The tub looks different. It’s a completely different size from the standard tub I would buy at Lowe’s. If I’m swapping out a tub, where do I find that tub?”

If you’re in a rural area or a city, there is a rural mobile home supply store outside of that area. They sell specific mobile home parts. Windows are a little bit different. Especially in an older home, you can’t go there, buy your standard windows and change them out. You need to be very familiarized with the pricing. It’s interesting because these mobile home supply stores buy from larger warehouse distribution centers. We have three of them spread out in our area, but the prices on some of the stuff at some of the stores are astronomical. The market is ridiculous with the pandemic of certain things, but it’s always been ridiculous because you can only buy those things there.

The owners have a great selling market price, but I could buy some doors cheaper at Lowe’s, but they won’t fit in the mobile home. There are a lot of things I’ll talk about when we go through rehabbing. I try to salvage as much as I can and fix what I have because sometimes that can get pricey, but the cost of rehabbing, in my experience, is much less than doing a house. Permitting is much less as well.

Key Relationships

Key relationships are like anything we do in the business. I would tell you to do these with your houses too, but there are some really specific people when it comes to mobile homes. Mobile home park managers, if you’re looking to buy homes in someone’s park, it’s important to form a relationship with that park and know the manager. What’s happening in some of these parks, especially in our state, the pricing is much cheaper. A lot of people are coming from up North and out West buying mobile home parks in our area. They’re off-site and they have a park manager that runs everything. That’s good and bad.

If you can’t form a great relationship with them and they’re not necessarily the owner, it doesn’t matter. They’re the ones that are controlling the entire park. You want to make sure you have a great relationship with them because they can bring you leads. I coached a student down in Florida that’s bought over fifteen homes in a park because he’s formed a great relationship. Unfortunately, I hate to say this, but this is his motto and I forget exactly how it goes. If someone passes away in the park, he’s the first person the park manager calls because he knows they’re going to buy the house. That’s a great one.

Mobile home movers are super important. They’re very busy. I’ve got a formed relationship with one that’s moved a lot of homes for us. It’s even hard to get him because so many people are buying manufactured homes, brand new, that he’s working directly with the dealerships and making a killing. He doesn’t have to work for the business. That’s a steady stream.

The good news about him is he knows where a lot of people are selling and buying homes. He might know areas that are great to invest in or some intel on areas that are bad to invest in. He might know where somebody is downsizing or liquidating. It’s important to have a great mobile home mover, especially also when you need to move home.

Mobile home dealers are the large dealership you’ll see that sells a lot of like Clayton homes or Fleetwood, the different brands for brand new homes. It’s important to find a dealer because they can often give you discounted prices on brand new homes. We’re going to be doing a lot more of this because the manufactured homes are selling so well in our area. Going in and finding land, then working out a deal with the dealer to find those new homes, moving them on the land, detitling and attaching them as real estate. We can sell that like a house. We don’t have to go in and rehab it. It’s a great strategy.

If there’s an older home on land, “The true value is in the land. We can move to a newer home. We’ll swap that out.” These dealers can get you discounted prices on new inventory. Some of these dealers are backed up for 4 to 6 months because all of these are built in the factory. If this is a strategy you think you might want to use, you might want to start building that relationship. I’m finding out like, “What’s the holdup time from buy to finish

[bctt tweet=”Start small and work your way up, so you understand the ins and outs.”]

Mobile home inspectors are all inspectors, but you want to know inspectors in the mobile home business. In the single-family business, you want to know. They’re in and out of houses all day. They know where the deals are. Those are the people that you want to relate to. Plus, if you’re looking to do some of these strategies, you have to know the inspectors because they’re passing your permit like everyone. It’s important to build a relationship.

Mobile home supply store owners are big for so many reasons. They know everybody, like the park owners, landlords and movers. Sometimes at our local store, the actual mobile home mover is the guy’s brother who owns the mobile home store. They’re in business together. It’s important because they know a lot of discounted deals.

For you that have been in mobile homes or see them, you see that metal skirting around the bottom of the homes, it cheapens the home a lot of times. A home that we did where we went in and had a mason brick the bottoms. What’s cool is we went to a park looking at some homes to buy and they had put a wood bottom on the home. What’s funny is my husband is always like, “I would never buy a mobile home to live in.”

I laughed because mobile homes are near the mountains, which are the biggest buying spots for short-term rentals. I’m like, “If we bought a mobile home and made it look like that, people would rent that all day long because it looks so good.” You can do things to fancy them up, like build nice porches and go through all that. These people are key relationships to the business so form those relationships.

The Six Strategies

I have six strategies to talk about, but I wanted to focus on a few. We talk about the buyer moving used mobile home in someone else’s park, selling a home with seller financing in someone else’s park, wholesale mobile homes like you would anything. They fix and flip, which is the real property, land home deals, that’s buying a piece of land and home, attaching that and going through the process of getting septic and sewer put in and then selling as a turnkey investment.

We’ve been able to sell mobile home investments to out-of-state or in-state investors. We own a property management company, so we’ve been able to do property management on the back end as well, which has been cool. You can write down ChristyDuckett.com/free and that is a property mobile home lead sheet that I’m giving away that will help you go through. We have our property walkthrough sheet off, “We took a lead on our single-family home,” but when you’re asking questions about mobile homes and there are so many different things you might not know, this sheet goes through all of that.

I want to talk about buying or moving a used mobile home in someone else’s park and the fix and flip model of real property. I threw in a slide about the bonus that I have to talk about, Airbnb, because I coached someone on it and it was such a cool strategy. I was like, “I want to share this with people.” I don’t want you getting this lead and then throwing it to the side or bypassing it. I want you to know, “I can make money with this too.” It’s all about diversifying.

I targeted different parks in different areas and we still do. My husband and another business partner went out to a park in a rural area. We got a lead call on buying some mobile homes in there from an out-of-state investor. I’m constantly farming parks. You might say, “Why would I not just buy the park? I want to own the park.” I get that all the time. I’m like, “I’m not telling you not to, but don’t ever go buy a park until you’ve owned a home because that’s a bad idea. It’s like, ‘I’ve never flipped a house, but I’m going to buy a multi-unit. I’m going to go in here and rehab everything.’ Start small and work your way up, so you understand the ins and outs.”

We researched different parks and great locations. This one happens to be in a great area. We’ve had a long-term relationship with them. It’s close to the bus line and hospital. Affordable housing is nowhere. That’s a thing of the past. I don’t even know what affordable housing is anymore. Mobile homes still allow some type of affordability lower than apartments or single-family homes.

This park was a great location. We thought about rentals or selling owner financing. We’ve done multiple deals within this park, which is pretty cool. What I’m looking at is you want to form a great relationship with the park manager. Don’t blindly go buy a home in a park and assume you can rent it and flip it because some of these parks make you live in the home. They want it to be occupied. You can get yourself into a bad situation. If you’re ready to move in, then great, but if that wasn’t your exit strategy, you could lose some money.

What’s going to happen is you’re going to have a lot of rent. Anytime you buy a home in someone else’s park, there’s a lot of fees you pay. Ours are probably on the more moderate side, probably $300 to $350 in our area. Sometimes that covers water, sometimes it covers sewer, but in some areas where I’ve coached people across the United States, there’s a lot of rents up to $1,500 a month. That’s not including the payment on your home.

 

If you’re going to do the strategy, you want to go into a park where the lot rents are moderate, the park is very easy to work with, the manager is super friendly towards investors because what’s going to happen is you’re trying to create cashflow. I’m going to give you an example of the tenant rent minus the lot rent in cashflow.

Check comparable rents in the park. It’s important to know, “How much can I rent this home for?” You either want to call around where you see a For Rent sign. Call and talk to a park. Call the surrounding area to see. You want to check nearby apartments. Apartment rents are astronomical. It boggles my mind that people rent, but it’s happening. People are moving to an area where they can’t find a home. We were at hockey practice with my son and I’m always like doing something but slightly eavesdropping on everyone’s conversation when I hear the word real estate, as we all do.

Two guys are talking who had moved to Columbia. I heard a gentleman saying, “We can’t find a house. I’m with my wife every day. We’re going out with the agent. We’re having to throw in these ridiculous offers.” The other guy said, “We gave up. We decided to rent an apartment.” He’s like, “We didn’t have a choice.” There’s that demand there as well, but a lot of people don’t want to throw away money in something in a high area.

I’d like to check those nearby rent apartments and how I’d like to price my mobile homes. Your mobile home is more appealing than an apartment in many ways. One, it has a yard with it. It’s always a little bit bigger. You don’t have people on top of you or people below you. That’s nice. I try to price my 3-bedroom mobile home at the price of a 2-bedroom apartment. There’s no reason why someone would rather live in an apartment or want to come to a mobile home. That creates this great opportunity to rent them. That gives me an idea of how to place my rents.

I want you to look at a deal, “How do I buy this?” If you’re in a high price area, you’re going, “What?” You could purchase something for $10,000. That doesn’t even sound real. I’ve coached students all over. You might be paying 25,000 for something, but you can also get more rent. The monthly rent we were originally getting in this park is $575. Since the pandemic, we’ve raised rents in there. We have worked out a relationship, so the lot rent stays the same. A lot of the parks have started raising the price because of sewers, water, the cost of electricity, all of this is going up.

Looking at that purchase price, say standardly, we’re going to negotiate as low as we can, which the good news about mobile homes is the reality that they’re very negotiable because everyone’s not looking for them. Also, they’re negotiable if they’re in a park because if somebody is motivated to sell, they still have to pay a lot of rent. That $325 a month for paying the park, even if they own their home free and clear, but let’s say they’re in a financial crunch and they don’t even have the $325 to pay monthly. Even if they want $20,000 for the home, they can’t pay the lot rent. They’re going to lose the home. The park can take that over, so go in and negotiate. They’re very negotiable.

I’m not saying take advantage of people but be a smart negotiator. The monthly rents in this park are anywhere from $600 to $625. They’ve gone up, which still seems cheap, but that’s pretty much median when you look at our area. You cannot get a house for $625. If you do, it is in the worst part of Columbia. You don’t want to live there. This is a nice family-oriented park.

If you’re going to property management, we’re taking into account that price, but you can see your monthly cashflow. Your monthly rent at $575 minus the lot rent minus property management, you’re still cashflowing very decently. There are a lot of people buying homes. I know this because I’ve talked to them. The cashflow in their home after they pay everything out.

On a single-family home, it’s $300 a month. On something, they’ve leveraged, which I’m all about leveraging. They’ll get the appreciation over time. That’s great, but when I look at that, I’m going, “You need to be smart and diversify. You want cashflow in many different directions.” If you’ve got some cash sitting like an IRA, cash sitting in the bank that you could take, put this into something and create some cashflow, this is a great avenue.

The Benefits Of Buying In A Park

I’ll tell you from tmy experience, the tenants have been great. There are very few maintenance issues. The reality is that maintenance issues are much cheaper on a mobile home than on a house. It ends up being a great situation. Owning a rental in someone else’s park, we want to talk about the glamor and the cashflow, but there are always some advantages and disadvantages. I like to keep it real and be super transparent.

What I like about it buying in a park is you don’t have to own the park, so you don’t have the headache of, “There’s a busted water line in the park. The pipes are frozen in the park. The park is on a well and the water came back. DHEC tested the water and it came back bad this month.” I know this from experience. You have an issue with that and have to pump money into it. I like the reality of not owning the park because I don’t have to deal with that big maintenance issue. I’m only dealing with my unit.

[bctt tweet=”A lot of people are finding out mobile home parks are very lucrative, and the problem is they look at every park the same.”]

It’s a very simple way to start and everyone should start this way because it gives you a hands-on experience. You might go look, “I don’t love mobile homes. I don’t think they’re glamorous.” It’s funny, the investor that we got a call from and we went and looked at her homes, she’s making very good money. She has 5 or 6 homes in this park, but she’s like, “I want to move on from them.” I was looking at her cashflow and I’m like, “Why do you want to move on with them?” She’s like, “It’s not my thing.” She even has property management, but they’re not glamorous, not as a beautiful luxury home. There’s a great cashflow opportunity in them, which I love.

What are the negatives? What to be aware of? High lot rent can be a deal killer. You want to stop. If you hear that it’s only running for $700 a month, but the lot rent is $50, stay away from that. The reality and what’s also happening is the second thing, be aware of changes in park ownership. Here’s what’s happening. A lot of people are finding out mobile home parks are very lucrative. The problem is they look at every park the same. “I can come in and raise the lot rents and I’m going to make more money.”

The problem is that there are many investors that have gone and come into our market. They’re gouging the prices of lot rent, but they’re not looking at what’s the market and what can it hold. We’re not a California or Florida market. It doesn’t make sense to have these overprice lot rents because, realistically, people can’t even afford it.

You have to be smart with the park you buy in because you also need to find out if it allows renters. If you’re buying homes in someone’s park, I would highly recommend consult an attorney. It’s across the board for the rental property regardless. We have an attorney that deals in real estate, but a special attorney deals with strictly rentals. Have them draft a contract between you and the park that states out everything.

Remember, during the pandemic, in some areas, you weren’t able to evict people. You have these people not paying. The expectation is still to get their lot rent. You’re going to have to pay out of pocket for the lot rent. You want to have rules in place. “What if a new owner comes in, buys the park and raises the lot rents?” That could affect your cashflow. You want to make sure that you’re building things in that if that does happen, you have the option to sell the properties. “Can you move the properties? “What are your options?” I’d highly recommend consulting an attorney to go through all that with you.

Fix-and-Flip Case Studies

This is a fix and flip case study. It’s interesting because we started not fixing and flipping. Even though I had been doing mobile homes since 2009, I wasn’t educated in every facet. I knew you could buy them at a park, do this and buy a park because we had done that. I learned through some education formally in manufactured homes and then I also learned doing, which is where a lot of us come about.

I started seeing that people are buying manufactured homes. There’s a great market in this. I was like, “Let’s flip a couple of these.” What’s interesting is I found that our manufactured home profits were almost as good as some of our single-family home deals. They were able to get done a lot quicker because I didn’t have to pull a permit to do something always. I was like, “This is an easier process. Why haven’t we done this all along?”

My husband and I have done everything. We have short-term, long-term, wholesale, flip houses, do mobile homes, but this was a good add-on and an in-between. I started scouring the MLS, which I do. I sent a lead to my agent and said, “Comp this out. I’m going to make an offer on this mobile home on land.” We’re doing this strategy. I looked on the MLS and saw a couple of properties in an area that I wasn’t as familiar with because they’re outside a realm in which I buy houses.

I was like, “Pull comps. Show me days on market. Is this a good neighborhood?” It’s more of a manufactured community. By community, the houses are on half an acre to acre lots. It’s built on the built-in community like a housing community. I like to buy those unless I find a manufactured home on a lot of lands because people want to land and lots of space.

I looked on the MLS and it was listed for $50,000. I looked at comps and I was like, “There’s a house that sold anywhere depending on condition, from $110,000 to $120,000. The profit margin seems good. How much work does this thing take?” I went in this house and it was gross but not any worse than anything I’d done. I was like, “It needs the basics.” I started negotiating the price.

For those of you that have been in this business for a long time, every time you walk into a house, you’re creating this scenario of what happened in that house. In my mind, I was like, “I guarantee somebody bought this home for someone like a grandparent and they rented it or gave it to them, tore it up and took it back.” That was exactly what happened.

 

The grandmother bought it for her granddaughter. Her granddaughter decided to destroy this house. The grandmother bought it in cash. She was like, “I don’t want to deal with this. I strictly bought this for my granddaughter. I want my money out.” I looked at that as an opportunity because I had to run the numbers to say, “Can I make money on this? Does it make sense?” I offered $35,500 and I could have come up. I was like, ” I’ll go low.” She came back and negotiated a little bit higher, but I was like, “Days on market in this neighborhood are a little bit longer. I have to get this at $37,000.”

I ended up getting it for $37,000. We built the new porch on the front and replaced some on the back. We put a new roof on. HVAC was good, but we had to do the interior furnace. We redid the whole thing for $30,000. It was affordable. This was during the pandemic time, so prices and all the wood in the homes were starting to rise.

What’s cool about a mobile home that you’ll see inside is that there are not many things I need to replace with wood. I had to go in. What you’ll see is the way these manufactured homes are built. The walls are built with panel boards. It’s not drywall on the older ones. It’s pieces of lauan and panel boards you fit together, so those are cheap to buy.

You’ll see in these mobile homes that they typically have imprinted wallpaper on them, but you can go in and paint over that. That’s exactly what we did. There were some soft spots on the floor. We ripped up the flooring and replaced it with plywood. That was our most expensive part. We didn’t have to go in and buy a bunch of lumber to do stuff. We had the porch, but you can buy a cheaper porch already pre-done. We decided to build one a little nicer. The kitchen also was very closed in. I hate to say, “It feels like a manufactured home when you walk in,” but there are certain things about these homes. That’s why I’m telling you to go walk and look at them.

For the newer ones, they’re building more like houses with the open floor concept because that’s our competition. The older ones are very closed in and the floor plan feels awkward. I go in and rip out all the cabinets. I used Lowe’s in-stock cabinets. I used vanities like I would in my single-family home. With the bathroom we put in a single-family home we flipped. I’m using all the same fixtures. For the bathrooms, I’m using sheet vinyl flooring. You could see how much better than the bathroom looks. We worked out that bulky closet. We left the garden tub and the shower. I had my guy spray an epoxy.

We carpet the bedrooms. On the walls with the panel, paneling strips are holding it together. I don’t go in with drywall. There’s no need to. That would be a huge waste of money. I didn’t even put granite countertops. We didn’t have to. I used Formica. I do go ahead and put the stainless-steel appliances because those make it look like a house.

When we threw this on the market, it was getting a ton of showings. People would go there and be like, “It’s a manufactured home. I didn’t read that. I thought it was a house.” On the MLS, Noah was like, “Don’t put the picture of the manufactured home. Put the picture of the kitchen because we want people to go and be sold on the kitchen.” That’s exactly what happened. It had a nice backyard and front yard. I said, “Take big pictures of it.” Don’t sell them where it looks like a manufactured home because that’s not what they want. When they go in there, they’re going to fall in love with it.

The cool part is the price tag on this was much less than buying a house. You can’t buy a house in this district and area. It’s even gone up to $15,000 or $20,000 since then, but you can’t even buy a decent house for $160,000 to $170,000. You’re getting in the school district at an affordable price with something very nice that looks like a house.

Here’s the other fix and flip case study. This also was on the MLS. Unfortunately, I’m finding few and far between on the MLS, but I’m doing some of the direct mail marketing. I’m trying to target neighborhoods with manufactured homes because there are not a lot of people doing that. I’m using a CRM that specifically can hone in on a manufactured home so I can mark it for them. I’ve cut out some of the single-family homes because those are saturated with everyone calling them. I thought, “Let me take a different avenue.”

This one was on the MLS. It was listed through an agent who was a very good friend of ours, who he and his wife are also an investor team. What’s funny about this is he has the listing. I’m like, “Why would you not buy this?” I’m not even joking. I talked to him, and they bought a little house on the lake to keep a long-term hold. He was complaining. He said, “We bought it for $300,000 because it’s non-owner occupied. The taxes are $10,000 a year.” I said, “Why didn’t you look for a mobile home on the lake? The taxes are so much cheaper.” He’s like, “I would never buy a mobile home.”

He still has that philosophy even though he’s seen me flip it. We bought this from him. He listed it, they sold it, he knows what we made and still has no interest. This isn’t going to be for everyone, which is cool. It’s not the glamorous type and for them, it’s not. This was listed on the MLS at $69,900. We negotiated and he is the agent. He can’t tell us what the seller will take, but I said, “They need to sell. I’m going to throw in an offer of this. Do you think they’d entertain that?” He’s like, “It’s worth throwing in.” I said, “Cool.” They took it.

This house smelled like cat pee. They had a lot of animals in there. This is in a good school district zone. I knew if we finish this thing off, it’s going to sell quickly. This is the one we brick the bottom of to make it look a lot nicer, so we didn’t have that cheap skirting along. At the time, it was about $7,000. That was the biggest part of the whole budget overall. We went in and bricked the bottom. We replaced the roof on this one and replaced the HVAC and ductwork underneath because he had pets that had ripped up stuff. Still, we were on a $30,000 renovation budget, which is crazy.

[bctt tweet=”There’s a strategy for everything in manufactured homes.”]

A house this size would be closer to $50,000. The cool part about mobile homes is the plumbing is easy to do and the electricity is cheap and easy because you have the panel walls. You don’t have to cut into drywall. That saves you a lot of money on the back end of that, which I love. We had a foundation issue on the mobile home, which was the mobile home was unlevel. It costs $650 to have a guy come in and level it out. I was like, “This is great. I would’ve paid $6,000 on that on a house.”

The turnaround time was super quick. We were done with this in four weeks, which was awesome. The mobile home before has double living rooms. It had this weird floorplan island in the middle that wasn’t super desirable. We came in, took the whole thing out and painted that. I always say paint flooring is amazing. We use laminate flooring, which was awesome. Lowe’s in-stock counters, we didn’t change much, because it works. I was like, “Why are we going to recreate the wheel? We use the same stuff.”

This one always makes me laugh. There are two reasons. In the closet picture is my friend’s wife, who also works together. She’s taking a picture of the bathroom, which is hilarious. That’s the picture that was on the MLS. This cracked me up. Number one, because you would never do that in a house. This is the thought pattern. Two, why in the world did they put carpet on the floor in a bathroom, which they do in houses but why do they put it on the tub? That’s the weirdest thing. Do you run out of towels, roll around and dry off? This is the after bathroom. We left that tub.

I had my guy epoxy and spread it. We put in some new lighting, mirrors, hardware and epoxy that whole thing. It looks so nice and simple. We still stage and do the same things we do with a house. We treat it like our houses. That’s the underpinning example I talked about. That old metal skirting makes that house look dingy. It makes it look not a house and cheap. Those steps look rickety and old. We put a nice staircase and then a little bit of mulch. There wasn’t much to do out there. On the left of the house, up top, there are houses in that subdivision and mobile homes. It’s a nice built community and a great school district, which are cool.

Mobile Homes For Short-Term Rentals

I’ve always loved manufactured homes and I thought they were cool. We’re always looking for real estate. My husband and I love short-term rentals. We are travel nurses. We love that, but we love our short-term rentals that we can go stay at. For us, it’s important to travel and we have two small children. Stacy shares that common ground. They’re always traveling and doing cool things. We are the same. It’s hard to get on a plane and go like you could back in the day, especially with two kids. Our one child is autistic. It’s not easy to travel with him. He has to be comfortable.

We target short-term rentals in areas that we want to buy because we can also use them selfishly. I had been looking around in the mountains. We’re in Columbia, so we’re about two and a half hours for some of you familiar with Asheville, Hendersonville, Black Mountain, Maggie Valley, Waynesville, all these areas close to ski resorts and these fun things. I grew up near the mountains. I love the outdoors. My husband grew up in Upstate New York. We loved that and loved the boys to be outside.

I started looking at housing and I’m like, “You can’t even find a house. It’s so expensive and hard to find them.” We started looking at mobile homes around there like, “What’s on the market? What’s the price point?” In the meantime, I have a very good friend, Jenna, who invests in real estate. She’s up in Pennsylvania. She randomly reached out to me in the middle of 2021. She said, “I have this manufactured home lead.” I was like, “Tell me more about it.” She wasn’t thinking short-term rentals. She was thinking, “Christy does manufactured homes. Let me call her.”

I was like, “What’s the deal?” She said, “My yoga instructor has a house they inherited from their grandparents. It’s a great house.” This is a beautiful home. She didn’t even go in and do anything. Her yoga teacher’s husband is a contractor, which is her contractor on all of her flips and rentals. She said, “It’s interesting because they don’t want to sell it. They want to keep it forever because they inherited it, but they’re sick of tenants. They’re not good landlords, so I thought about renting this.”

I thought about it and was like, “You want to rental arbitrage it?” She said, “What does that mean? I don’t even know what that means.” I said, “You’re thinking you want to take it over from him. He’ll keep it. He’s not selling it, but you’ll sublet it and put a renter in.” She said, “That’s exactly what I’m thinking.” I’m like, “Where is this place located? Tell me a little more.” She starts telling me.

Everybody in Pennsylvania goes to the Poconos. I laughed because I was like, “I know the Poconos. I grew up in Virginia. They used to run all the commercials of the big champagne glasses that you could sit in and lay back luxuriously.” She’s like, “Everyone goes to the Poconos because they market a lot, but my house is located in a better area, near ski resorts, outdoor hiking trails.” This thing is in the hub of everything.

Frank Lloyd Wright has some of the houses that he built here. She said, “People come here to vacation all the time.” I said, “How much can you get this? What will he let you put it under for rent-wise?” She said, “He only wants $800 a month. We already worked out a deal. I’m pretty sure I could rent it to a full-time tenant at $1,200 a month.” I was like, “That’s a good little strategy. You’re controlling this real estate,” but I was like, “What if you came in and you short-term rented or Airbnb this?” She’s like, “I don’t know anything about that.” I said, “You’re lucky I do.”

 

I started researching all of this and said, “I feel pretty confident that you can make up to $3,000 on this thing.” She said, “Done and done. What do I have to do?” I walked her through and staged it. She did. She launched this right after Thanksgiving of 2021. With the new COVID strain, you could have short-term rentals. It’s been here and there. I’ve had some cancellations because of COVID and rebooks. I told her, “Don’t get discouraged. Number one, you don’t have stars. You’re not a super host. You’re not going to get booked a lot.”

When I looked at this area, I was like, “Most people are renting huge homes for $300 to $400 a night. I was like, “You can price yours around $180 and see what you get. She started getting bookings immediately. I interviewed her and that’s on my website because I thought it was so cool for people to know. She’s like, “I’m starting. I’m learning the process.”

She’s making around $2,500 a month. She’s paying her contractor $800, which is so cool. He’s so happy because he doesn’t have to deal with the burden of stress and headache. She’s super happy. She’s like, “This is making three times what I would. I have eighteen rentals that I want to get rid of or I need to change the strategy because I realized I can do more.” This is cool to see even if you don’t own the real estate, which you can do. I asked her, “What do you think you could buy one of these for in your area?” She said, “$130,000.” I’m like, “Even if you bought it, you could do the same thing.” There’s a strategy for everything in manufactured homes.

Hopefully, you learned something and are excited about this. Hopefully, when you get a mobile home lead, you don’t throw it in the trash, throw it to the side or never call the person back because you can make some good money. Here is my free mobile home lead sheet if you go to ChristyDuckett.com/free. You can catch that interview too with Jenna because she walks through everything. You’ve got this property lead sheet, so you can at least figure out what to do with this. I want you to have some happy mobile home investing. I hope you’re able to complete a mobile home deal or flip and add that to your portfolio or notch in your belt.

 

Important Links

• South Carolina Super Group
• Christy Duckett
• IBTS
• ChristyDuckett.com/free
• Jenna Hoover – Can you AirBNB a Manufactured Home? – Past Episode
• REI USA
• http://www.rei-usa.com/membership/
• http://www.REI-USA.com/trainings/
• http://www.REI-USA.com/ teachers-spotlight/
• http://www.rei-usa.com/free-template/
• https://www.instagram.com/reiusa_/
• Free Online Jumpstart Course for Real Estate Investing: https://bit.ly/3IrDji9
• REI USA Youtube: https://bit.ly/36QPoQl
• How to Get Started Investing in Real Estate: https://bit.ly/3pIxB4r
• Talk to Kristi, Our Community Manager, for a FREE 10 Minute Website Demo: https://bit.ly/3pIxB4r

 

About Christy Duckett-Harris

Christy Duckett-Harris is a real estate investor from South Carolina. Christy is heavily sought after for her knowledge on rehabbing, passive income properties, and mobile homes. She’s an award-winning coach with a love for helping others. Being a business owner, married, and a mother of two, she’s done anything but slow down. This supermom has mastered what it takes to balance the chaos of family life and real estate investing.