Pros and Cons of Wholesaling Mobile Homes

The demand for mobile homes is noticeably rising. We attribute this to the increased cost of living. The ever-growing apartment rental prices have forced people to buy mobile homes. It is a viable opportunity for any wholesaler in the real estate industry.

But what does wholesaling a mobile home entail? It involves getting a mobile home under contract and selling that contract to an interested buyer. It is crucial to understand the wholesaling process to increase your returns.

How to Wholesale a Mobile Home

Advertise for sellers

These are motivated individuals willing to sell their mobile homes. Use either online or offline platforms. With online sources, go for a seller who has incorrectly marketed their mobile home. You can effortlessly get the home under contract.

Get a property disclosure report

Inspect the home in person or virtually to verify its condition, what is working, and what needs repairs.

Negotiate the price and terms

Smartly make an offer to the seller. Be realistic about your profit expectations.

Get the mobile home under contract

Depending on your offer, have a contract with the seller, clearly defining the terms of the deal.

Market the mobile home

You don’t want to keep the seller waiting. Just ensure within a week or two you have a buyer lined up.

Contract the buyer

Assign your initial contract with the seller to the buyer. Ensure the sale happens smoothly. Pocket your assignment fee and bingo! You closed the deal.

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Pros of Wholesaling Mobile Homes

Wholesaling a mobile home has its set of advantages, which makes it a lucrative venture for a real estate investor.

#1: Minimal capital risk

When wholesaling, the amount of money you put into the project is negligible. Since you don’t purchase, fix or hold the property, you only incur marketing costs.

#2: Make money in less time

A wholesale deal takes a short time. The moment you get a mobile home under contract, you can take approximately a month before closing the deal. Take your profits and it is a done deal. To increase your returns, wholesale as many mobile homes as you can.

#3: No credit check

If bad credit is hindering you from getting into real estate investing, then wholesaling mobile homes is a creative way to start. Because you don’t buy the property, you don’t undergo any credit checks.

#4: Increased knowledge of the local market

To deal in mobile home wholesaling, you need to have extensive knowledge of the market you are dealing in. Wholesaling is an entry point to real estate investing. The market experience gained in wholesaling will help you upscale into better real estate strategies.

#5: Experience gained on deal analysis

For a successful mobile home wholesale deal, the seller, the buyer, and the wholesaler should have a win-win situation. To realize that, as a wholesaler, you must calculate how profitable a deal is. First, the seller should get their intended sale proceeds.

Your agreed ultimate price with the buyer should give you a profit. From your selling price, the buyer should be able to do repairs and still make a profit from selling the revamped mobile home. The more homes you wholesale, the more experienced you get in analyzing deals.

#6: Growth to reputation

Your real estate network expands as you wholesale many homes. With an enormous network, you will build your brand. The wholesaling process becomes easier. You will have a list of lined-up sellers leading to more and more mobile home wholesaling deals.

Resource: Real Estate Investing School – How to Make $100,000 from Real Estate

Cons of Wholesaling Mobile Homes

While wholesaling is an attractive venture, it has some downsides.

#1: Conflicts with mobile home parks managers

In your wholesaling business, you might close the sale with a buyer who wants to move from the current mobile home park. Mobile home park owners and managers don’t entertain investors who transfer homes from their community.

If the mobile home is shifted and they find out you are involved in the deal, you might never wholesale again in that mobile home community.

#2: Being left out of a deal

You can put a home under contract, then the seller goes around you and sells the home before you get a buyer. For homes attached to private land, you can sue the seller for breach of contract. But for mobile homes known to be personal property, there is little you can do.

#3: Negative reputation

In the wholesaling business, there are times you won’t sell a mobile home under contract. If you raise the seller’s hopes that you will purchase the mobile home and you don’t, you will have a tainted name.

Be transparent with the seller and inform them you are searching for a serious cash buyer to purchase their mobile home. Also, assure the seller that they will get paid as stipulated in the contract.

#4: Unpredictable income

Like wholesaling any type of property, with mobile homes, you don’t know when you will close the next deal. It might take some time before getting a motivated seller and successfully helping them to sell the property.

Therefore, learn to manage your finances and save for bad days.

#5: Difficulty finding buyers

The prosperity of your mobile homes wholesaling business depends entirely on having a list of lined-up buyers. Without a buyer, there is no deal. At first, it is back breaking to have a list of solid buyers.

Use an online platform like Craigslist or your networks to get buyers. Keep contacts with all the buyers you deal with for the possibility of conducting business in the future.

#6: Small profit margins

Mobile homes are cheaper compared to traditional housing like single-family homes. With wholesaling, you leave some profits on the table. This means you get to pocket minimum returns compared to other investing strategies such as flipping or rental properties.

Bottom Line

Mobile homes have recently become high-yielding investments, which was not always the case. This makes them fertile ground for wholesalers. Wholesaling a mobile home requires minimal capital but the profit margins are thin.

However, it’s a chance for you to swiftly get into real estate investing. Know your market extensively and have a list of buyers. Close several deals to get good returns to jumpstart your real estate investing career.

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