Investing in Mobile Homes

Investing in Mobile Homes

When done correctly, Investing in Mobile Homes can be a great business opportunity. My wife and I have managed a small mobile home park since January of 2000. In the last 19 years we have acquired, rented and flipped a few mobile homes.

Terminology

Manufactured Homes can include single or double wide structures. However, the tongue and road wheels of manufactured homes are frequently returned to the manufacturer after delivery and installation.

Single wide units are considered mobile homes. If you are lucky the axels, road wheels and tongue are still attached to the frame. If this is the case many mobile homes can be moved in an emergency.

Trailer is frequently used for both single wide and double wide structures. However, the use of that term should be limited to something readily towable by your family station wagon. This category includes RV which are not mobile homes in my opinion

Insurance

Mobile homes should be insured with a mobile home policy. However, this may not be the case if they are permanently attached to the realty. If permanently affixed to the realty you probably need a standard rental dwelling policy.

Flood Insurance

A broad form mobile home policy may cover flood damage. The reason is a truly mobile home can be towed out of a disaster zone. Check with your agent.

A nice mobile home

Mobility

One reason to be investing in Mobile Homes is their mobility. To be mobile the mobile home should still have the tongue either attached or stored underneath the home and behind the skirting. Additionally you want the road wheels and axles installed underneath as well. Road wheels are like pickup truck tires. They can and do rot over time. However the rims are still there.

Titles

Manufactured homes and mobile homes have a title just like a car. Double wide homes frequently have two (2) separate titles, one for each side which are shipped seperately.

Taxes

In Illinois, a mobile home is subject to Personal Property Tax. The land the home sits upon is subject to real estate tax. When purchasing a mobile home, check both of these out with the county assessor. Make sure there are no liens on either.

Tax Release Letter

In some counties you need a certified letter from the county collector showing the personal property taxes are paid. Once you have the letter you can take the title to a license and title service. This is not the same as a title company for real estate. Think car title. You need the letter to apply for a new title. In this county that cost is $10.00 at this time.

Holding Title

A mobile home is considered personal property. You should consider using a personal property trust to own it. The trust should have a PO Box mailing address for privacy reasons.

Recently, a personal property trust I am connected to bought a 1968 Baron two bedroom single wide mobile home. The trust paid $1,900.00 for this antique. It is so old that in this county the only time it can be moved is to the scrap yard.

However, the prior owner was a grant application wizard. She got the grants department to pay for about $20K in improvements over the last 4 years. The furnace and air conditioning are “ONLY” four months old. The water heater is a brand new gas tank-less unit.

Contractors

Frequently contractors overcharge to work on mobile homes because no one else will. Contact local mobile home parks and find out who they use for maintenance, repairs and roofing.

Photo copyright Svetlana Lukienko via canva
Contractors cost time & Money

Tax Advantage

Personal Property Taxes are much lower on older mobile homes, when compared to traditional construction. They are almost never reassessed for tax purposes as everyone “knows” they go down in value each year. Yes, mobile homes depreciate almost as fast as your car does.

Permanently Affixed

Some mobile homes are installed on a permanent foundation. This can be a concrete block crawl space or a full basement. As a side note I have never seen a Mobile Home permanently installed on a slab. If permanently installed the mobile home may be subject to only real estate tax. 

Inspection

You should have the home you are looking at inspected by a qualified building inspector. Make sure they understand mobile homes before hiring them. Do your “Due Diligence” on the inspector before hiring them. 

Allergies

Mobile Homes are allergic to water! Let me say that again. Mobile Homes are allergic to water! Water makes almost every surface inside a mobile home swell up and eventually get soft, spongy or rot. Many of the flooring materials used when the original subfloors in older mobile homes are poor quality particle board.

Never tear out the original seamless vinyl flooring in the home. Install something over it. During the original construction the vinyl was installed before the interior and exterior walls. Removing this water barrier makes the flooring more susceptible to swelling and decay.

No Allergies Here Investing in Mobile Homes

Building Materials

Investing in Mobile Homes means buying unique items to fill the void. Many items in a mobile home are custom purchases. They must meet more stringent requirements than a stick built home to be permitted.

Water Heaters

Water heaters must be specific for mobile homes. Install the wrong water heater and whoever does your occupancy inspection will make you take it out and replace it.

Gas water heaters designed for mobile homes are frequently double vented. Incoming air comes from below the floor and is drafted from the vented space inside the skirting. It is vented up though the floor and out through the roof. Make sure to replace with like kind and quality.

Siding

Metal siding is very common in older mobile homes. It is still available from the Mobile Home Parts Store. It comes in sections 2 feet 9 inches wide by 8 feet long. The top, bottom and one edge are smooth and flat. The remaining edge has a rolled crimp to accept the siding from the previously installed piece. This is susceptible to hail damage but after that it is almost indestructible.

Masonite Siding became popular in the late 80s and 90s and is still available. WE WILL NEVER well almost never buy a mobile home with this type of siding. The 4’ x 8’ sheets require regular sealing and caulking to be properly maintained. Most owners did not due this. The problem is the seam between each piece of siding. Water gets into the seam and rots the interior stud walls from the outside.

Vinyl Siding is just like on a regular home.

Exterior Doors

The exterior door of a mobile home is a custom fit item. The reason is there is no overhang above the door of a mobile home. The original door was designed to prevent water from rotting the door jamb and surrounding wall studs. However many of them were also cheaply made being a Styrofoam core with a thin sheet of aluminum on both sides.  They are easily damaged and destroyed.

Frequently you will find a metal sided mobile home that has a standard exterior steel clad exterior door installed. Let me assure you that the door jamb will be rotted in no time. We have even seen homes where a standard door from a vendor like The Home Depot was cut down by the contractor who installed it to make it fit.

Once you cut the metal surface of the door it rots from all sides. Plus the bottom of the door is jagged, nasty and no longer had the wood support at the bottom. You can order a steel clad door to custom size from The Home Depot. Make sure you measure both the Height and the width before ordering. Mobile home door are not 6”8” in height. If you install a standard home door go completely and extremely out of your way to weatherproof it before, during and after the installation. Then service the exterior seams at least once every two years.

Investing in Mobile Homes

Investing in mobile homes is not an art or a science. It just takes common sense. A little knowledge of construction wouldn’t hurt either.

Consider buying homes on their own lot for rentals and homes in someone else’s mobile home park as flips or seller finance.

As the government screams about rent control and the need for affordable housing, just remember these great little money makers. These wobbly boxes earn their weight in gold in just a few years.

Recommended Reading

“Deals on Wheels” part 1 and 2 by Lonnie Scruggs. We bought his course years ago and it is still relevant. Available new and used on Amazon.com or Mobile Home.com

Mobile Homes can be cash cows or money pits. Just check them out before jumping in. To Earn the PHP designation check out our education tab

For more info join Illinois REIA

Good Luck and Good Investing

George Skidis

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