Buying and Renting Mobile Homes - Posted by Bill Elsenrath

Posted by Lyal on July 19, 2002 at 21:24:11:

Pretty obvious that you know your market and that’s the important thing. If you have 20 apps per unit, I’d say the demand is enough that if anyone gives you a hard time you can just evict and say NEXT!
I’ll defer to your judgement. Thanks for the info.
All the best, Lyal

Buying and Renting Mobile Homes - Posted by Bill Elsenrath

Posted by Bill Elsenrath on July 11, 2002 at 14:47:00:

I have some vacant land that I can put 2 mobile homes on and rent out. I can buy 12x65 for between 5k to 6k in real good condition. To move and set them up will cost $1,100. To run sewer and water will cost about $2500. I already have the utility pool in place. To put a gravel driveway in will cost $200. I will be able to rent them out for $350 a month. I will pay for sewer and water, $27 a month. I have the cash to do this with and just wanted some advice. I am tring to get more cashflow income for retirement but have never invested in mobile homes. I live in Southern Louisiana. Thanks!!

Re: Buying and Renting Mobile Homes - Posted by Scott B

Posted by Scott B on July 12, 2002 at 09:43:29:

Scott S(NC),

I agree about holding and renting. You may disagree with the perfection of my last exit but on my last mobile deal was a combo of the two mothodologies and am quite happy with it.

It is that deal I spoke with you about on the phone several months ago and has come out nicely. To remind you and for others sake it was a 1/3 acre lot in a condo park that I got with a '92 14x80 on it. My purchase price for both was 14k and my cash in the deal is just over 7k. - the rest was owner financed to me with payments of $150/mos which is the payment on my seller’s lot note.

On my exit I leased the lot using Tew’s net lease with option forms. The option price is 24k with a monthly payment of $216 for 30 years @ 10.31% interest. He can either pay $216 for 30 yrs or get new financing on the lot and pay me off. He plans to pay for 30 years. Nice long term rental income.

I leased the mobile with the same type of deal. 14,900k option price, lease payment of $300/mos for 77 months @ 14.75%. He can either pay the length of the lease or pay me off.

Either way its a nice long term cash flow and nice profit. I’ll have a $366/mos cash flow until my $150/mos is paid off in 35 months, then cash flow will go to $516/mos for the next 42 months. When or if he pays off the home, with deductions the whole time, it will go down to $216/mos for 30 years if he ever pays it off. I don’t suspect that will happen. I suspect I will re-lease the home and lot within 5 years to someone else.

This way I have a tenant, title to the home and deed to the lot, and complete control of the properties with all the benefits.

Scott B

Re: Buying and Renting Mobile Homes - Posted by ScottS(NC)

Posted by ScottS(NC) on July 12, 2002 at 07:33:39:


In my opinion renting mobile homes is a GREAT way to build up some cashflow. What people at this site forget often is how Lonnie started his business. It’s in his books he was a LandLord He did it for years then he got burned out on it AFTER generating alot of equity and value. Lonnie deals are a great way to make money you ALREADY have grow at great yields. But I challenge anyone to compare renting from a cashflow stand point. Yes there are more headaches involved with renting. But the yield are always infinite if you hold on long enough. Lonnie deals are depreciating assets with a limited amount of value that can be extracted before you have to go look for another one. Rentals will pay and pay for your entire life with good management. I currently have 8 rentals all mobiles in the long run these will far surpass my lonnie deals on value i get from them. I think Chuck is off base on No.2 There are ALOT of millionaire Landlords, I know they would also disagree. Even our mentor Lonnie has used the rental vehicle for years. Are we born burned out Landlords?? If so your missing huge opportunitys to build net worth and cashflow together something lonnie deals cant do. Take Care ScottS(NC)

Have you calculated? - Posted by Chris (TX)

Posted by Chris (TX) on July 11, 2002 at 23:51:16:

…just how long it will take you to recoup an investment of this size? Have you considered that rentals typically become headaches and have major maintenance expenses?.. not to mention turnover of tenants? Have you read Lonnie’s books?

Hey, tell ya what… I’m in east Texas, and I’ll sell you a 14 x 65 3/2 for $5K… would that work?

Seriously… the last 12 wide I bought I only paid $600 for, and it was in pretty good shape. You are thinking of paying $5K?? $6K??.. that’s an heckuvalot for a 12 wide! I SOLD mine for $1,500, and I did absolutely no repairs at all to it… just sold it as is. Moving cost was $450… buyer paid that too.

Just something for you to think about.


10 steps to financial independance… - Posted by Chuck

Posted by Chuck on July 11, 2002 at 15:12:07:

  1. They pay utilities, not you… period.
  2. Don’t ever rent the homes, sell them on notes.
  3. Do rent the lot space… as in FOREVER… it’s constant monthly income, even after the notes are paid off.
  4. You have NO landlord issues.
  5. IF they fail to pay, you take it back and re-sell it.
  6. Get a hefty deposit each time you sell/re-sell, it’s cash in your pocket.
  7. Buy more land and repeat.
  8. Buy this -
  9. Buy this too -
  10. IF there’s ever any question of what your doing, see steps 1 thru 7, re-visit steps 8 and 9.

Re: Buying and Renting Mobile Homes - Posted by ScottS(NC)

Posted by ScottS(NC) on July 12, 2002 at 09:54:33:


Congrats, this deal looks quite nice to me. I also like one part you forgot to mention because you are using a lease option(renting) the option consideration is yours to keep and you still get huge tax advantages. Its the complete package in my opinion. Thanks for the update Scott now find another and your full time job might not look so necessary. Good going Take Care ScottS(NC)

Re: Buying and Renting Mobile Homes - Posted by Lyal

Posted by Lyal on July 12, 2002 at 21:02:18:

Sorry but I have to disagree here…Lonnie was a burned out landlord with apartments, not rental mobiles. I’m all for diversifying your holdings with rental units as in apartments or SFH’s but rental mobiles are the absolute bottom of the food chain. They are for people with few other places to go and unfortunately they don’t exhibit much “pride of ownership” hence the lifetime of the asset is not infinite. The yield and repeatability of traditional Lonnie deals will let you build a sizeable portfolio (that will yield incredible returns) pretty quickly. When homes get paid off there are new ones to fill in the gap in cash flow with NO maintenance headaches.
When Ray Alcorn evaluates a park for purchase, he immediately subtracts the income of any rental mobiles and will not include them in the value of the property. Pretty sure the reason is that the income received will be burned up replacing them when they’re at end of life.
All the best, Lyal

Re: Buying and Renting Mobile Homes - Posted by Bill Elsenrath

Posted by Bill Elsenrath on July 12, 2002 at 13:07:38:

It’s great to hear your mobile home success stories. Where I live about 45% of the population lives in mobile homes. New houses are being built and mobiles are being sold. The new apartments going up want $600 rent for a 1-2 bedrooms. I know I can easily get $350 a month for a 2 bedroom mobile home. I will recoup my whole investment of 15k in less than 2 years on the 2 mobile homes I entend to buy. I already have a piece of land paid for waiting for them. I went through the local paper and there are about 10 mobiles under 6k for sale, one was $1500. Over the next few weeks I will get things rolling. I’ll let you know.

Thanks, Bill Elsenrath
from Denham Springs, Louisiana

I agree 1000% Scott - Posted by Dave Baker,(TN)

Posted by Dave Baker,(TN) on July 12, 2002 at 09:00:49:

Lonnie deals have their place and are perfect for a person with some seasoned landlord experience…But for true infinite cashflow, rentals will always be better. I have two rentals and although I had a few growing pains at first, they are now just weekly cash cows. I had have the the plumbing redone in one,($500), replace the fridge in another,($500), but every bit of this is tax deductable ALONG with the depreciation IRS gives you on the homes themselves.

The key to a good rental deal is living close by where you can manage it well AND also a good screening of your renters. I ran an ad in the paper where I said right in the ad that there would be a background check performed and any drug convictions would not be allowed. That narrowed my base of baddies right there. I have two really good renters right now who I treat well and try to respond to any minor problmes as quickly as possible.

I also make them pay me weekly instead of monthly. If you ask most people how many weeks there are in a month, most will say “four”…Multiply that times twelve months and you only get 48 weeks…There’s 52 weeks in a year which obviously means that each month has slightly more than 4 weeks. When renters are made to pay you a weekly rather than a monthly amount, you get these four weeks for free. I also make them sign a 5 page contract which specifies eviction procedures in case they don’t pay. In my state and in the event of someone not paying their rent for a time, by the fact of them paying weekly, it means I can get them moved out much quicker than if they paid monthly.

All in all, I like renting under the conditions I gave, the best of all.

Re: Have you calculated? - Posted by ScottS(NC)

Posted by ScottS(NC) on July 12, 2002 at 08:02:36:


Just curious, Do you have mobile home rentals? I was wondering what the Major maintenance expenses were? And explain to me how this Major expense would be handled if your buyer(lonnie deal) decides to leave in the middle of the night. I have renovated close to 20 mobiles even the most gutted home can be fully repaired for 2-3k. With security deposits and 6 months rent I can breakeven. I have never lost money on a rental comparing what they have paid in, to what I have paid for repairs. With proper managment rentals are almost the same as lonnie deals. If a Lonnie buyer stops paying you reposses. If a teneant stops you evict(this is usually easier). If a lonnie buyer trashes and leaves you will probably fix and resell. Rentals will be fixed and re-rented. Tax time I pay NO taxes my rentals are HUGE tax advantages. Lonnie deals are tax liabilitys. Lonnie deals can have just as much or more tenant turnover as rentals. I know most people use the generic statments you made(in your post) about rentals but I disagree, I own both. Lonnie deals,rentals,lease options,ect… they are all investment vehicles with uses, just because you heard a certain vehicle is not the same as another doesn’t mean it is better or worse. Rentals have made more people rich than any other of these vehicles be careful of your advise. Take Care ScottS(NC)

Re: 10 steps to financial independance… - Posted by Bill

Posted by Bill on July 11, 2002 at 16:03:11:

Thanks Chuck. I just ordered the video.

Diffrent Worlds, Diffrent Solutions - Posted by ScottS(NC)

Posted by ScottS(NC) on July 19, 2002 at 18:28:04:


I respect your post and agree with it in the midwest area. I have family in Green Bay WI and they are always telling me how most mobile rentals are junk with low class tenants. However here in Asheville NC and I believe alot of the Deep south, things are diffrent, last I heard here 44% of people lived in mobiles. I have had several of my tenants move from apartments to my rented mobiles for several reasons apartments can’t compete with such as Big yards of there own, rural settings where kids can ride there bikes on “the gravel road” without fear of being on a busy paved road. Also my park and alot of others here are in good school districts where houses and what few apartments are there are much to expensive for hard working blue collar folks. I have had several tenants that were sick of hearing noisy neighbors in the apartment adjoining theirs. Lyal down here mobile home renting is as common as renting a SFH and looked at the same way. I never have less then 20 or so applicants to choose from when I advertise. I have heard all the reasons not to rent mobiles, funny thing is I am making more with my rentals than I am on my lonnies. I also find I chase people around for money about the same regardless if its a Lonnie deal or rental. I believe the area you live in is the important factor, not the same old cliche’s of how awful it is renting mobiles. Renting is the same regardless of the object being rented. Train your tenants or they will train you. This I have learned the HARD way. Take Care ScottS(NC)

A couple suggestions - Posted by ScottS(NC)

Posted by ScottS(NC) on July 12, 2002 at 13:47:50:


Try your best to get a couple 14x70 3bd 2bth they rent easier. Even if its one person they will use the other rooms for office or storage ect… If apartment’s are renting for $600 you should be able to get $400-500 undercut by $100 or so. I am in Western NC if you want more info email me. Take Care ScottS(NC)