Mobile Home Profits In the Buyers Market

Selling new manufactured homes is a very difficult business these days. There is little, reasonable, wholesale or retail financing available. The cost of field work and installation has quadrupled over the past decade. Marketing, selling, financing, finish work, dealing with permit authorities. All take a huge investment of time.

We are deep into a buyers market, new inventory has been hanging around longer and profits are lower. There is one bright spot in the manufactured housing business and that is selling pre-owned homes.

Time proven truths that separate new home sales and pre-owned home sales:

1- New Homes: You limit your profit when you sell the home.

2- Pre-Owned Homes: You limit your profit when you buy the home

When selling new homes you may have more than one supplier offering different price points... but one thing you can be certain of is that you will never get any serious discount below the wholesale (dealer) price. From time to time you may get the incentive of a discounted or free option but it is rare to bring any factory builder down from their listed price. The only room you have for profit is between the fixed wholesale costs and the price the local market will permit you to sell for, in reasonable amount of time.

With pre-owned homes there is also a top price that the local market will permit. When you purchase pre-owned homes you are in business to buy low and sell as high as the market will permit... on both ends. Your profit spread jumps up as your purchase price drops down. Most homes you invest in will need some referb. We turned six home and land packages last year (2009) The average cost of renovations was under $5000. Less then a quarter of what it costs to prep private land and installation cost for a new manufactured home today. Renovation work often needs no permits or inspections and never includes the "impact fees" and red tape that are becoming popular within an ever increasing number of permitting authorities.

At this moment, in most markets, there are a huge number of manufactured home and land packages in foreclosure. Homes installed on deeded residential real-estate (not leased lots in a park) are selling at as low as 20% of what the sold for new several years ago. Investors with the ability to locate these manufactureds home and land foreclosures are making killings.

Next time we will discuss how we have been finding great deals on pre-owned manufactured homes.