Can You Make Money Wholesaling Mobile Homes?

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If you’re new to my channel my name is RJ Bates III. Myself and my partner Cassi DeHaas are the founders of Titanium Investments.

We are nationwide virtual wholesalers and on this channel we share EVERYTHING that we do inside our business. So if you’re looking to close more deals - at higher assignments - anywhere in the country… You’re in the right place.

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Over 10 years in the real estate investing business
Closed deals in all 50 states
​Owned rentals in 12 states
​Flipped houses in 11 states
​Closed on over 2,000 properties
​125 contracts in 50 days (all live on YouTube)
​Back to back Closers Olympics Champion
Trained thousands of wholesalers to close more deals

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Chapters

• 0:07 Are Manufactured Homes Worth Wholesaling
• 0:55 Mobile vs Manufactured: The 1976 Rule
• 2:50 How To Comp And Underwrite Right
• 4:20 Reading Market Activity Signals
• 5:04 Why Investors Love Manufactured Homes
• 7:41 Owned Land Beats Rented Land
• 9:30 Best States And Rehab Math
• 10:55 Final Verdict And Audience Ask

Transcript

SPEAKER_00: 0:07

Are mobile homes good for wholesaling? Well, I probably shouldn't do this. And as a longtime YouTuber, I should know better than to give you guys the answer right out of the gates. But the answer is yes, wholesaling mobile homes is fantastic. And to be quite honest, if you're going to be a virtual wholesaler in many states, mandatory. There are so many opportunities that come along with wholesaling mobile homes that if you're ignoring them and passing on these opportunities, you're just flat out leaving money on the table. Now, there are quite a few things that you need to understand about wholesaling mobile homes. Let's get into that. And starting off with using the phrase mobile home. You should probably stop saying that and you should get used to saying manufactured homes. Now, based off the research that I did for today's video, the main difference between a mobile home and a manufactured home is the construction date. A mobile home was built before June 15th, 1976. While a manufactured home was built after that date. So, to be quite frank, the majority of the deals that you're going to be doing that you refer to as a mobile home are actually now referred to as a manufactured home. This date is also very, very important for you to remember because anything that was built prior to June 15th, 1976, can no longer qualify for a mortgage loan. Okay, now this is very important because, in my opinion, anything built prior to that date, you should probably pass on because it's going to limit your buyer pool significantly. The reason why is because think about our in buyers. The majority of the time they're going to be flippers and landlords. Landlords cannot burr, they can't refinance and pull their cash back out. So they would be stuck with their cash in on the property. Majority of your in buyers don't want to do that. And for a flip to their end buyer, the owner-occupant, they're not going to be able to qualify for a mortgage because of the property itself, the manufactured home itself. And so, because of that, I would say let's limit that down to anything built after June 15th, 1976. We're willing to move on. Anything prior to that, we should probably pass, unless you have a very particular end buyer who is willing to purchase those. Now, when it comes to comping and underwriting, this is where many people have questions about what am I supposed to do when I get a lead that's a manufactured home. Well, it's quite simple. Comping and underwriting is always the exact same thing. Find something just like your subject property and compare it to what the values are. You should be paying attention to what the properties are worth when they're completely fixed up. That's your after-repair value. And then you should also be paying attention to the properties that are selling in the as is not fixed up state, that's your current market value. Otherwise, there's really no difference. So you can't take this manufactured home and compare it to a brick single-family single-family residence because that's not comparable. So if you go into prop stream and you're going to comp, all you have to do is change your property type to a mobile home or manufactured home, and then find that inside of the distance away from your subject property. Now, the only thing that you're probably going to have to do is go a little bit further out in distance if it's not surrounded by other manufactured homes. Realistically, there's no difference. Now, there are times where you get a lead that is a manufactured home and there are no other manufactured homes to compare it to that have sold. Now, what does that tell you? That tells you there's not a lot of activity in regards to manufactured homes in that area. The same thing it would tell you if you were compinging it against a three, two, twelve hundred square foot brick home. That should kind of be an alert to you that maybe there's not enough activity in this area. So when I do go to dispo it, my end buyers are not going to be interested because this is not a hot area. So it's not necessarily that you should just pass on it because it's a manufactured home. You should be paying more closely attention to the buyer activity and the amount of deals that are moving in that area. Now, for us, manufactured homes have been a honey hole for many, many years. And part of the reason why is because manufactured homes, by nature, are cheaper, they're more affordable. And what are real estate investors doing at all times? They're solving sellers' problems and providing a solution to the owner occupants, the in buyers that buy properties from the flippers. Well, affordable housing is one of the biggest needs in almost all of the United States. So your inbuyers absolutely are interested in taking down mobile homes and manufactured homes, whatever you want to refer to it as, because it does give us affordable housing. The other thing is on the rental side, it is going to be cheaper for that landlord to take down a manufactured home and still have solid cash flow numbers. In fact, they can even have better cash flow numbers on manufactured homes in comparison to that 3-2, 1200 square foot brick home. Based off the research that I've done, manufactured homes are 53% cheaper during construction than a normal house, single-family house. And so, because of that, there is a massive opportunity for YouTube wholesale manufactured homes. Now, one of the other things that I wanted to bring up, this I just found this to be interesting. Okay, mobile homes cost the least in the states of Nebraska, Iowa, and Ohio. Across these states, the median value of mobile homes is less than$25,000. Okay, and put that into perspective, the median value of a single family home in these states is more than$150,000. That's where the affordability comes in. The other part, in some states where price points are extremely high, like Washington, Oregon, and California, Washington is the only state where the value, the median value of a mobile home is higher than$100,000. It comes in at$125,400. But Oregon and California are$93,000 and$91,000 for manufactured homes. Okay. So it's significantly more affordable than single-family homes. So it's a great opportunity for you to go in and provide value to your end buyers, both from a flipping perspective and from a cash flow perspective. Okay. Now one of the things I want to talk about is when it comes across mobile home leads, and I'm calling them mobile home leads because that's what it says on Speed of Leads marketplace. You have a chance to buy mobile home on owned land and mobile home on rented land. My perspective is as a virtual wholesaler, unless I have a very particular buyer who is willing to take down manufactured or mobile homes on rented land, I am only getting the leads where it is on owned land. Otherwise, you are going to come across quite a bit of a predicament during dispositions because your end buyer is going to say, Hey, you're providing me a deal on the actual manufactured home itself, but I don't own the land. And so that can significantly hinder your ability to rent the property. And when it comes to flipping it, it's like, well, the my in buyer would then have to rent the lot and then also buy them the mobile home from me. This also severely impacts the lendability on that manufactured home itself. So pay attention to the fact that it should be on owned land. And if you don't get the lead for speed of lead where you know that up front, this should be one of the first questions that you ask the seller. Okay, so you have a manufactured home that you're willing to sell me. Do you own the land or is it on rented land? This does limit your ability to do deals inside of mobile home parks. Normally it is going to be on a little bit more of an acre or plus, and they're going to own the land. That's going to be the sweet spot where you really want to focus on when it comes to virtually wholesaling. Now, the states where we've had great success wholesaling manufactured homes has been Florida, Texas, and Missouri. Now I find that interesting because we've done quite a few deals in Iowa and Ohio, but not as many manufactured homes as we have in Florida, Texas, and Missouri. Those places have been fantastic for us. You do have to pay attention to the amount of rehab needed because if the rehab needs exceed what the cost of buying a new manufactured home would be, then that's where you're going to come across issues. So you do want it slightly distressed, just not overly depressed, where it's so distressed that it would make more sense just to buy another manufactured home. So pay attention to that when you're asking the seller about the condition of the property. Overall, if you are going to be a virtual wholesaler, I think you absolutely should be locking up deals that are manufactured homes on own land. It's a great opportunity. And like I said, you are going to be providing something that the majority of this industry is sleeping on and not providing this value to your end buyers. Gives you an opportunity to create a relationship with those in buyers and can give you repeat business over and over and over again on the disposition side. So for those of you that are wondering, should I wholesale or should I not manufactured homes? Now you know it's called manufactured homes, not mobile homes, but the answer is absolutely yes. If you guys have had success wholesaling some manufactured homes, let me know in the comments. And what states in particular have you been crushing it with manufactured homes? If I messed anything up in this, let me know in the comments. Regardless, show me some love. Like today's video, and we'll see you guys tomorrow.