The Perfect Property

Understanding The Art Of "Flipping" Mobile Homes

by Zachary Thompson

You're interested in getting into the world of commercial real estate, especially the art of "flipping" homes to increase their value. However, you only have enough money to invest in mobile homes. Don't fret! Mobile homes can serve as a useful way to break into the flipping market and increase your capital. But only if you know when and how.

When And Why Mobile Homes Are A Good Investment

Generally speaking, you're going to want to invest in mobile homes that actually have access to property. This is more common than you'd imagine: people with little money often invest in property and place mobiles homes there instead of investing in building an all-new home. Though you could buy individual mobile homes in a park, flipping them for any profit is going to be nearly impossible.

Once you find a mobile home on a good piece of property (say 5-10 acres or more), you've found a property worth buying. Just consider the fact that you could potentially buy a good trailer for about $30,000 (with land!) and pay just $150-$200 per month on loan payments. That low cost of investment (coupled with the high demand for inexpensive housing) makes mobile homes with property a great investment value.

Repair To Boost Its Value

The main problem you're going to run into when buying mobile homes is the fact that they don't gain value over time. In fact, they usually deprecate. That's why you need to repair any major concerns to increase their immediate value and sell them as quickly as possible. Otherwise, you might end up with a major lemon on your hands.

The following improvements will help increase its value on the market:

  • Improved insulation to increase energy efficiency
  • Adding weather stripping and energy-efficient windows
  • Painting the interior and exterior
  • Improving lighting fixtures

Each of these improvements are likely to add at least an extra couple thousands of dollars to the home's value. However, major renovation projects (like installing a completely new plumbing system or tearing down and rebuilding walls) are likely going to be too costly to make it worth the investment. You don't want to come across as cheap or offer an inferior home, but you do need to balance your cost investment carefully.

Potential Profit Margin

Let's say that you buy a mobile home on five acres of property for about $30,000, as mentioned above. Beyond that initial investment, you're also going to have to pay:

  • Property taxes, which differ by state and city. For the sake of argument, let's just say about $2,000 per year.
  • Mortgage payments of about $200 per month.
  • Repair and improvement investments, of about $2,000
  • Cost of hooking up sewer and electric, about $200 each.

Bring that together and you are investing at least $34,400 before your mortgage payments. If your repairs take you three months, you can add another $600 on, for about $35,000. Let's say that your improvements (and the local demands for cheap housing with property) helped you sell the property for $42,500 after those three months. That's a profit margin of $7,500 or $2,500 over a three month period.

As you can see, time is of the essence when flipping mobile homes. That's why you should reach out to real estate companies near you, such as Baddour And Associates Commerical Realtors​, when selling your property: they can help you find a buyer quicker than you could on your own.