At any one time, there are quite a number of ads on Craigslist where people offer free mobile homes. If you have ever checked most of them out, you may have realized that they always tell you that you will have to move the mobile home to your preferred location, an obvious fact. But some also tell you that they can offer you mobile home moving services at a fee.
Immediately, you realize that the free mobile home is not quite free after all. While you will incur the costs of moving a mobile home whether you got it for free or you spent money to get it, moving is not the only cost you will incur in this deal.
Anyone who has been in the real estate business long enough will tell you that there’s more to the real estate business than a yard of great deals and bad ones. For the most part, many of the potential money making deals fall under a category that is somewhere between the two extremes.
Therefore, for you to make a conclusive argument for taking a free mobile home, you must know exactly what it would take to make the mobile home ready for habitation. If you are buying it for your own use, you must consider every change you need to make before you can be comfortable enough in the mobile home to call it your home. Often, this will involve underpinning, skirting, repainting, interior décor, etc.
Whether you want to buy free mobile homes as an investment or to occupy with your family, there are a number of things you must keep in mind when calculating the real cost of this entire process. These include:
The cost of repairs
Before a free mobile home can be sold or before you can announce to your loved ones that they will be moving into a new home, a lot of repair work will need to be done. Often times, free mobile home investors have to call mobile home repair contractors to do a complete makeover.
The idea is to renovate it in a way that makes its value shoot through the roof. Therefore, you must do due diligence in finding the best but most cost-effective ways of doing repairs, if the investment is to pay off.
While the mobile home is being repaired, you will need to pay for the compound in which you have set it up. Thus, it would help to get a contractor who can work on the repairs in the shortest possible time. Real estate magnates who’ve been in the mobile homes business recommend targeting to sell the mobile home within the first year of acquiring it.
More often than not, most repair money goes to plumbing, roof repair, and solving electrical wiring issues. Therefore, you should take extra care while inspecting the free mobile homes in those areas. Failure to do so can easily bring your mobile home investment program crashing down.
You should also keep in mind that mobile home repair contractors are usually in low demand during winter, making it possible to pay a fraction of what you would to hire them during warmer months.
As mentioned above, you should seek to sell the mobile homes within the first year of acquiring them. Holding the mobile homes for long will significantly lower your profit margin. Hold it long enough and the whole investment turns into a money pit, as you struggle to pay for its maintenance and the monthly lot rent.
If you can find a lot whose management is willing to host your mobile homes for free for a number of months, you can save a significant amount. All the same, you should calculate the cost of holding the mobile homes for around 12 months when calculating the costs involved in your investment.
While being hosted for free would be great, it would not be wise to tag your mobile home investment plan on favors. For it to count as a viable investment, it should be able to make you money even while paying for lot rent for at least 12 months. The free lot rent favor should be an added incentive to pursuing the investment.
Because of the possible discount, a mobile home park manager can give that an individual mobile home owner can’t, it could help to target finding free mobile homes that have been advertised by such managers. The reduction in costs can measure up substantially over time.
Imagine spending thousands of dollars renovating a free mobile home only to find that the price you would need to sell it at is higher than the most expensive mobile home on sale in the area. Imagine the devastation as you realize that you will not get your money back!
To avoid this, survey the existing prices of mobile homes and what potential buyers would be willing to pay for a well renovated mobile home. Find out the average asking prices that other sellers pitch to people seeking to buy mobile homes as well as the prevailing selling terms within the locality you intend to sell your mobile homes.
It is quite common to find mobile home parks selling their mobile homes through rent-credit programs or bank financing. Having this information is important because it can help you keep away from free mobile homes in such parks. This is because these finance programs will almost always make it possible for the mobile home park management to sell their mobile homes at a fraction of what you would need to sell yours to be in business.
Keep in mind that park managers will have no monthly lot rent to worry about and can afford to hold their mobile homes for longer periods of time without diminishing potential returns on the investment.
Ease of reselling
One important lesson you should learn before going on a free mobile homes investment spree is that some mobile homes are easier to sell than others. Generally, a five-bedroom mobile home sells faster than one with fewer bedrooms. One-bedroom mobile homes are the hardest to sell.
Therefore, when choosing the free mobile homes to invest in, resist the temptation of carrying those mobile homes you may struggle to sell for years. Even in the event that the available one-bedroom mobile homes are in a far better condition than the others, it might still be more prudent to stay away from the one-bedroom units.
The underlying principle here is that you should only invest in mobile homes that have the highest potential to bring a return in the shortest possible time. Another common challenge in these mobile home investments is bedroom sizes. A mobile home could have three bedrooms but the bedrooms could be so small that they cannot accommodate a full-sized bed.
This is a significant downside and can have dire implications to your entire investment. Look for mobile homes that you can fit a full-sized bed and still have some space to freely move around. Mobile homes being build today would on average have bedrooms measuring 16 feet by 14 feet.
Additionally, it is advisable to invest in free mobile homes that have an electricity supply of at least 100amps. A supply lower than this would not adequately serve the electricity needs of most modern appliances. While many potential buyers will likely not be turned away an electricity supply lower than 100 amps, it makes for a good addition to your price pitching arguments.
Count the cost and avoid unnecessary anxiety and stress
As you can see, just because a mobile home has been advertised as free doesn’t mean that you will not spend money to acquire it. In fact, there are many instances when free mobile homes ultimately cost more than those that had a price tag on them.
Counting all the costs associated with getting a mobile home ready for occupation will help you make more informed decisions. You will be in a better position to determine the viability of such an investment when you know the exact costs that will be awaiting you the moment you decide to become the new owner of the mobile home being given away for free.
To avoid the anxiety and stress that a bad business deal can bring, you owe it to yourself to find out everything you need to know about the mobile home and the process you will have to go through top finally turn the mobile home investment into a money machine. Executed properly, an investment in free mobile homes can bring incredible returns.
A single wide mobile home can cost you anything between $1,000 and $2,000 to move it from its current location to your preferred location. Skirting would cost you around $700 on average, hooking up utilities an extra $500 or so. You could make a few more changes if they can have a significant bearing on your asking price.
There are people who’ve converted free mobile homes to sought-after dwellings making them as high as $15,000 in gross profit. Therefore, if this is something you want to do, delight in the knowledge that there are success stories out there and you could be next one too. You just need to do your research.
Have you ever considered investing in free mobile homes or getting one for your family? Did you go through with it? If yes, what were your experiences? Was the process worth your effort, and would you encourage other people to consider free mobile homes as an investment?
Tell us about your experiences in the comments section below. We will be glad to hear both the success stories and those that did not turn out quite as well as was expected.