Mobile homes are one of the most affordable ways into real estate. You can buy a home for the price of a used car and resell it with seller financing for steady monthly income. But the deals that go wrong usually go wrong for the same three reasons. Here is what I check before I buy.
1. The title
A mobile home is often titled like a vehicle, not like a house. Before anything else, I confirm:
- The seller has the title, and it is in their name.
- There are no liens on it, or they will be paid off at closing.
- Whether the home is titled as personal property or has been converted to real property with the land.
No clean title means no deal, no matter how good the price looks.
2. The park and the lot
If the home sits in a park, the park has a lot of say in your deal.
- Will the park approve a new owner or tenant? Ask the manager before you buy.
- What is the lot rent, and how often has it gone up?
- Are there age limits? Some parks require homes to be newer than a certain year.
- Are rentals allowed, or must the home be owner-occupied?
3. The condition
Age matters. Homes built before June 15, 1976, before the federal HUD code took effect, are much harder to finance and insure. For any home, I check:
- Soft spots in the floors, especially near the bathroom and kitchen
- Roof leaks and water stains on the ceilings
- Plumbing under the home and the condition of the underbelly wrap
- The frame, the piers, and the tie-downs
A sample deal
Here is a simple example to show how the numbers can work. The figures are for illustration only.
- Buy the home for $15,000 and spend $3,000 on repairs: $18,000 in.
- Sell it for $30,000 with $3,000 down and seller financing on the other $27,000.
- The note: 10% interest, paid over 5 years, about $573.67 a month.
The $3,000 down payment comes back at the sale. Over 5 years the payments add up to about $34,420. All in, that is about $37,420 back on $18,000, if the buyer pays as agreed. If they do not, you may have to take the home back and sell it again, which is why buyer screening and a good servicing company matter.
Check the rules in your state
Many states require a dealer license once you sell more than a few homes a year, and lending rules can apply when you finance a buyer who will live in the home. Check your state’s rules before you scale this up.
Have a mobile home you want to sell, or one you are thinking about buying? Reach out and I will give you an honest read on it.
This article is for education only. It is not legal, tax, or financial advice. Laws vary by state, so talk to a licensed attorney, CPA, or financial professional before you act on anything you read here.
