Manufactured/Mobile Homes on Acreage: The Best Kept Secret in Real Estate Investing | Think Realty
Properties that look better than the competition
Most likely, you have already read the title of this article. I always use this title in the four mastermind groups I am a member and speaker of and in the national events I speak at. People always ask me, “Do you really believe that? Why?”
My answer is always: “Yes, from the bottom of my heart I believe it 100%.” I’m going to explain why prefab homes are really the best kept secret when investing in real estate!
Let’s first define this asset class. Whether I say mobile home or prefabricated house, they are and mean the same thing. These houses are built in a factory and come in both single and double widths. My company typically buys 95 percent doublewides from 1,200 to 2,500 square feet and we buy five percent singlewides from 900 to 1,200 square feet. Don’t confuse this with mobile home parks, it’s not the same thing. Although I have owned a mobile home park in the past and this can be a huge investment.
I’m talking about buying the prefabricated houses that are already in the country and have exactly the same classification as a single family home. They come with a trust deed or a mortgage depending on the state.
In my company’s business model, we currently buy 10 properties per month in four states: Texas, North Carolina, South Carolina, and Georgia. We have purchased over 425 properties in the past seven years, and do all of this with private lenders and investors. We have over 100 investors and wager over $ 1 million a month with them inside and outside of their IRA. The Stromberg Investment Group believes and follows the golden rule and structures lucrative real estate joint ventures.
We buy existing houses that are already in the country. We’re not moving the house into the country. Then we repair the house like new. This really is our secret sauce. It really looks like a new house when we’re done – new carpet, new paint, new air conditioning, new appliances, a new roof if one needs one. Why are we doing this First, it’s very easy to lease. Our tenants love our properties because they look so much better than our competitors’ homes! It’s great for us and our investors because it drives deferred maintenance far into the future because everything is in “like new” condition. Plus, we have much lower maintenance costs because we don’t have the basic problems that many single-family homes have. At the Dallas / Fort Worth Metroplex, I hear of foundation repairs worth $ 30,000 to $ 50,000. If we have to remodel the house, it’s $ 1,500.
When you say the word “mobile home” people think of an old single sided metal 12×60 with tires on the roof from 1960 or 1970. The houses we buy have enormous building standards. They are built with two by four or two by six side walls. They have plywood or OSB floors, upgraded windows and insulation packages, upgraded appliances, cabinets, and fixtures.
My father, a bricklayer and builder in the Chicago area, visited me in Texas. He looked at about 15 of my properties and said, “Wow, these are better built than most of Chicago’s railroad houses!” That’s another reason this type of investment is a real secret because people don’t know how well built it is. They are built just like most railroad houses – and in many cases even better!
Here are some other great advantages that prefabricated houses have over single family homes. Prefabricated houses usually cost a third to half the cost of a construction site / single-family home. Hence the buy-in price is much lower and our investors love it because they can pay cash for these houses and get huge cash flow every month! In many cases, the cash flow is literally twice that of a single family home! It’s great for renters too because not only do they get more square feet for their dollar, but they also get half an acre to an acre of land so the kids have a place to play, verses that live on one zero. Lot Line House in the city. These homes come with an FHA compliant concrete foundation, which is especially important if you are selling the home as it qualifies for the same FHA funding as a single family home. These properties are also in the suburbs and the countryside, and in most cases have much better school districts than those in cities.
My attorney says never use the words “recession-proof,” so I’m going to call it “recession-resistant ©” and here’s why: Prefabricated houses on land are the cheapest home in America today. You are always in demand. No matter how bad things get, people will do two things: they will eat first, and then they will have a roof over their heads.