Due to some short pieces of fiction known as manuals on the art of buying and selling used mobile homes, a lot of investors really believe that, for , they can make untold riches buying and selling used mobile homes. While they can generate a lot of effort for themselves, and sometimes a return on their investment, the clear winner in these investments is the mobile home park owner where the home resides. While the used mobile home investor struggles to turn a positive yield, the park owner makes tens of thousands of dollars in profits on the same home, while he sleeps.
The average mobile home park sells for a 10% return on investment, or capitalization rate, also known as “cap rate”. Under this rule, every dollar of income the park generates increases its value by 10 times. If you assume a mobile home lot in an average park can net 0 per month in income, then the value of each occupied lot is ,000 to the park owner. To achieve this value, all the park owner has to do is rent the lot.
The used mobile home investor, however, has much more work and risk. He has to buy the home, remodel it, advertise it, show it, sell it, and collect on this note. He also has to shoulder the burden of lot rent while it is vacant, worry about the tenant wrecking the home before its paid off, and worry about it burning down or getting destroyed in a tornado. And for all this, he may get a 10% to 20% return on his investment – best case. And that’s not counting any value for his time doing all this work. This he gladly throws in for free. So when the smoke clears, he may make ,000 profit on a ,000 investment.
Meanwhile, the park owner has made a ,000 profit on that same home. And he has no time, effort or risk in it. He makes the ,000 whether the home is ever sold. And can do so in his pajamas.
So why would anyone want to buy and sell used mobile homes? I’m not sure. But I know that every mobile home park owner in the U.S. is awfully glad they do. If the average used mobile home investor would instead turn his attention to investing in mobile home parks, he could be a millionaire – and with a lot less strain.
To view Mobile Home Park Investing articles click here
About the Author:
Dave Reynolds is regarded as one of the leading Manufactured Housing Industry experts. He has purchased over 50 mobile home communities, 100′s of mobile homes, a
Now Pay Close Attention –
Do you have an Ugly house you want to sell? On the next page you will find someone who will put cash into your pocket for that broken down wreck of a house. ==> I Pay Cash For Broken Down Ugly Houses Nationwide
So if you own a broken down house you can sell it to Payton Lowe for cash. I strongly sudgest you contact Payton Lowe on the next page before it’s too late.
Visit this page ==> I Will Pay Cash For Your Ugly House
Tags: cap rate, capitalization rate, home investor, home park, home remodel, mobile home park, mobile homes, short pieces, time effort, untold riches