Wholesaling Mobile Homes

Wholesaling Mobile Homes: The (ULTIMATE) Guide

real estate investing strategies real estate terms wholesale real estate Jul 19, 2022

Mobile homes are considered to represent some of the most affordable home purchase options.

They are often located in communities of trailer parks, which are areas specifically designed for mobile homeowners that offer a variety of conveniences. Mobile homeowners usually rent a space for their mobile home so they can hook up to basic amenities, like power and water, etc.

The demand for mobile homes has been historically fickle –

wholesaling mobile homes demand


Mobile home prices were on the rise even before the pandemic gripped the globe –

wholesaling mobile homes prices


Mobile homes are still recognized to be among the least expensive housing options. However, this extraordinary interest in mobile homes is the result of many homebuyers being priced out of the traditional marketplace.

Since the beginning of 2020 and the pandemic, mobile home prices have continued to rise, hitting an average sales price of more than 123K near the end of 2021. The recent real estate demand across sectors has driven prices so high that the number of mobile home investors has also exploded.

 wholesaling mobile homes cost

One of the biggest advantages of wholesaling mobile homes is the relatively low price – in terms of real estate investing. They are significantly cheaper than site-built homes, even when subtracting the cost of the land required to build a site-built home.

According to an analysis of census data, mobile homes tend to be three to five times cheaper than traditionally built single-family homes, which makes them an attractive investment.

Wholesaling houses that are mobile or manufactured is a legitimate investment strategy, although mobile home wholesaling can be a bit quirky when compared with their site-built counterparts.

The smartest way to avoid the potential potholes in the mobile home wholesaling process is to educate yourself.


What Is Wholesaling Mobile Homes?

Wholesaling is a strategy employed by real estate investors. The objective is to enter a contract to purchase a property priced below market value. The reason for the ‘priced-to-sell’ property, which may include single-family homes, condos, rental properties, or multi-family properties, varies but often includes a poorly maintained home or a homeowner/seller who has hit the financial skids.

A wholesaler’s investment horizon is short-term as it is their wholesaling objective to assign (or transfer) their “right to purchase – a.k.a. equitable interest” to another investor or end buyer.

Wholesaling typically requires little in terms of capital to establish a sufficient cash flow for the minimal Earnest Money Deposit that is usually held in escrow. The key to wholesaling is finding motivated sellers who are in a hurry to sell. There are various reasons why a seller may be ultra-motivated –

  • Facing an impending foreclosure.
  • Trying to short-sell a property.
  • The property is in disrepair.
  • The property has been neglected and obtained through inheritance.

To put it in perspective, a wholesaler, unlike those flipping houses, doesn’t want to close or take possession. A wholesaler just wants to market their “right to buy the property at an agreed-upon price” for a fee. This is done by assigning the buyer’s/wholesaler’s equitable interest to another interested buyer – usually, a cash buyer who will, by rehabbing turn a profit by selling the rehabbed property to a retail customer.

You can also check out this quick video below that talks about how to find cash buyers online for free!

What Constitutes A Mobile Home?

A mobile home is a type of structure that is prefabricated and built within the controlled climate of a factory. A mobile home, which can also be known as a trailer, or house trailer, is typically affixed to a chassis prior to making a final trek to its destination. Mobile homes have evolved dramatically since their early origins.

Since 1976, homes that were once labeled mobile homes are now legally known as manufactured housing. Mobile homes/manufactured homes that are built in the United States must meet FHA (Federation Housing Administration) standards. Its FHA certification (can be found on its permanently affixed HUD metal certification plates or HUD tags.

wholesaling mobile homes compliance plate


The Compliance Plate provides information about the manufacturer, manufacture date, and important serial and HUD identification numbers.

Mobile homes can be situated on land owned by the mobile homeowner, in a mobile home park, or on leased land. [Mobile Home parks are detailed further in the article.]

Pro-Tip – If the home is missing its HUD tag, check the property’s records to determine if a previous mortgage existed. The missing information may have been needed by the previous lender. Also, HUD provides, through contractors (Institute for Building Technology & Safety (IBTS)), the potential to obtain a certificate or certified letter attesting to the fact that the HUD labels were once attached. 


Wholesaling Mobile Homes: Step By Step

Mobile home prices vary significantly. For example, in the states of Iowa and Nebraska, mobile homes may range around $25,000; however, in other areas, the price may reach well over $100,000.

There are very defined steps when learning how to wholesale mobile homes.

wholesaling mobile homes steps

1. Understand Regulations Governing The Transaction

Every state sets forth laws and regulations governing real estate and business operations. Make sure you have a full understanding of the legislation and regulations that impact your mobile home market.

States require a real estate license to sell, list, or market real property unless you are a principal owner. Real estate law is usually strict and requires the licensee to be trained and to pass a state test to obtain the license.

However, wholesaling a mobile home (or any property for that matter) is the process of marketing a contracted ‘right to buy’ a property at an agreed-upon price within a certain timeframe.

Wholesaling does (and CAN NOT) include the marketing or sales of real property – without a license.

While this may seem like this minor, innocuous distinction, it is not. This, among all investing tips regarding mobile homes, is the legal line in the sand.

The right to buy the property is awarded to the wholesaler when both parties execute a contract of sale. The ‘right to buy’ the subject property is known as one’s equitable interestwhich is a marketable asset provided to the buyer by the Principle of Equitable Conversion.

If you remember nothing else – selling or marketing one’s right to buy a home IS NOT the same as selling real estate. This is an essential distinction and one that must be understood to stay on the right side of the law.

Wholesaling has been on the radar of many jurisdictions across the country that have enacted specific laws that define the actions of a wholesale real estate professional. These include Illinois, Philadelphia, and Oklahoma.

2. Familiarize Yourself With The Relevant Market

The real estate market plays a significant and influential role that inevitably impacts the larger overall economy. The real estate market is enormous and defined by many moving parts and essential market metrics.

So, to begin, review larger market metrics – the direction of prices, and the demand, based on statistics like ‘days on the market.’ These are easily accessible online.

Mobile home wholesaling beginners may find it beneficial to team up with a more seasoned colleague or real estate mentor who can help accelerate the time it takes to learn the essential market factors influencing the real estate market.

Real estate wholesalers interested in the mobile home market should be (and stay) current and well-versed in the markets they serve.

Market knowledge is crucial to understanding the quality of any potential investment. This is discussed next.

Read Also: Wholesaling Real Estate For Beginners

3. Establish Investment Criteria, Including After Repair Value (ARV) and Maximum Allowable Offer (MAO)

The wholesale deal’s profit is equal to the difference that exists between the initial purchase price and the price of the subject property being paid by the end buyer. If the wholesale deal follows a double-close (rather than an assignment of contract route), the profit would be the difference between the initial purchase price and the sales price in a new real estate contract where the wholesaler is the seller.

Most wholesale real estate deals hinge upon the results of a simple analysis to determine if the deal makes financial sense.

Do the transaction’s details fall within an investment criterion that you have established for your wholesale business model?

Many wholesalers follow the 70% Rule, a basic industry standard to determine a potential wholesale deal’s viability. Here is an example to clarify how to use the 70% rule when analyzing a potential property -

A wholesaler contracts a mobile home priced at $30,000. The mobile home needs some work, but after some analysis, the wholesaler determines that this same mobile home could be sold for $60,000 if someone took the time to update and renovate some basic issues.

Note that the $60,000 estimate is known in the business as the After Repair Value (ARV) – the anticipated future market value of the home.

A fix and flipper, who tends to buy from wholesalers, may also use the 70% Rule. However, they do so with the intent of taking title and completing the updates. So, if the fix and flipper agree that the $60,000 ARV is a fair estimate, the maximum price tag for the flipper would be 70% of $60,000 or $42,000.

Essentially, the potential profit for the wholesaler in this deal appears solid and strong. Here’s why –

The wholesaler’s contracted price of $30,000 is more than 28% below the maximum price a fix and flipper would be willing to pay ($12,000/$42,000= 28.57%).

This analysis includes another important wholesale concept – the Maximum Allowable Offer (MAO). The MAO accounts for the expenses required to prepare the property for sale to a homebuyer –

  • Renovation costs.
  • Carrying costs.
  • Closing costs, if applicable.

Ultimately, a fix and flipper will only be willing to pay the After Repair Value -MINUS- the costs involved in bringing the transaction to a successful conclusion.

In the above example, if the estimated costs to repair (and carry the property during construction) are $5,000, the MAO for a fix and flipper would be $37,000, which is simply the ARV minus the transaction’s expenses ($42,000 - $5,000 = $37,000.).

The Bottom-line, if the deal unfolds as above, a wholesaler has a potential $7,000 profit with little capital or time required to accomplish the goal.

4. Search & Locate Property

Real estate wholesaling begins with locating a property that fits your investment criteria.

Consider these tips for finding motivated homeowners selling underpriced wholesale properties:

5. Negotiate And Execute The Contract

When you work with a home dealer or seller, work from a position of integrity and choose to be transparent, as this ensures you begin to build professional trust in what is a relatively small and local industry.

When a wholesaler finds a property that meets their wholesale investment criteria, they enter a contract with the seller at a mutually agreed-upon price. A small Earnest Money Deposit (EMD) is typically provided as a measure of good faith.

Wholesaling requires the execution of a legally enforceable contract of sale, so if you are unfamiliar with the contract’s language (or legal consequences), it is prudent to reach out for legal advice regarding disclaimer options before signing. Allow the attorney to read and offer a comment on your legal obligations and consequences.

6. Exit The Deal

There are two primary exit strategies for wholesalers. Each requires another buyer, often sourced from the wholesaler’s buyers list.

Assigning The Contract Prior To Closing

In this strategy, the wholesaler enters into a purchase and sale agreement but never takes title; instead, they assign their Equitable Interest/Title to another buyer at a higher price using an Assignment of Contract. The difference between the purchase price on the original contract and the assignment is the wholesaler’s gross profit.

The Double Close

In the double close, a wholesaler enters into a purchase and sale agreement but takes title, if only for an hour or day, etc. The double close requires dual closing costs but offers a bit of legal protection because the wholesaler is truly the seller and needs no license.


How To Comp Mobile Homes?

wholesaling mobile homes comps

To determine the value of a mobile home, you must first know if it is a) real property or b) personal property. Those mobile homes that have been affixed permanently to a foundation are usually appraised as real property. A mobile home not permanently affixed to a foundation is personal property or chattel and is appraised differently. [This is discussed below, but an important concept because in 2021, 76% of new manufactured housing was titled as chattel/personal property.]

One of the most common ways to determine the value (and thus, MAO) of any type of property is to review similar or comparable properties (known as “Comps”) – usually located within a reasonable distance from the subject property.

A reasonable distance varies based on location -

  • ½ mile within urban areas.
  • 1 or so miles within suburban areas.
  • 5+ miles within rural areas.

Comps can be pulled from a podcast or an online sites like MLS, Zillow, Redfin, etc. but must be comparable in terms of the -

  • Age
  • Size
  • General overall condition – it is best to do a walk-through because the condition is pertinent to the expenses used to calculate your MAO.
    • Interior inspection - check for water damage or floor holes. Also, determine water pressure and if electricity works, etc.
    • Exterior inspection – check the roof, siding, insulation, and the stability of the mobile home. This may require temporarily removing the home’s skirting.
    • Added-value features, like a great neighborhood or upgrades.

Comps, obviously do not need to be an exact match but very much need to reflect present marketplace conditions. 

A professional appraiser (using Uniform Residential Appraisal Report, Form 1004C), realtor, or real estate agent generally requires at least three comps that have been recently sold and two that are currently listed.

Mobile Homes As Personal Property

Mobile homes that are not permanently affixed to their foundation are recognized as personal property, so they are valued differently. As personal property, a mobile home’s valuation uses the U.S. NADA’s Manufactured Housing Appraisal Guide – referred to as the "blue book".


Wholesaling Mobile Homes: Pros And Cons

Like all real estate strategies, mobile home investing offers both positive and negative aspects. The pros of a strategy generally refer to the rewards, while the negative aspects often reference the risks associated with the reward.

Pros Of Wholesaling Mobile Homes

  • Even with recent price rises, mobile home wholesaling offers a lower-cost opportunity than traditional homes.
  • They are often offered in specialized communities of summer homes or retirement communities.
  • The mobile home sector of the wholesaling real estate arena tends to have less competition than more traditional site-built homes or condominiums, etc.
  • Wholesaling mobile homes offer the potential to generate quick cash.
  • Less than perfect credit is usually not relevant to the transaction.

Cons Of Wholesaling Mobile Homes

  • The negative reputation of poor appreciation– which, as shown above, is not accurate in today’s marketplace.
  • If the mobile home is not real property (and therefore recognized as personal property), it precludes your use of real estate law should the deal go awry.
  • Mobile home potential buyers may be a smaller pool of buyers than traditional homes.


Wholesale Contract For Mobile Homes

The legal paperwork for a mobile home is contingent on its legal status.

Is It Considered Real Or Personal Property Or Chattel?

  • Mobile homes without permanent foundations are considered personal property. They use a Bill of Sale – which legally transfers ownership and acts as evidence or a receipt of the transaction. The Bill of Sale and its requirements vary by state.
  • Mobile homes that are affixed to a permanent foundation are considered real property and will, depending on the jurisdiction, require a contract.

In Arizona, for example, one can use a pre-written Mobile and Manufactured Home Purchase Agreement and Sales Contract. Check with your local jurisdiction after determining if the mobile home of interest is held as personal or real property.


Wholesaling Mobile Home Parks

At the end of 2021, there were more than 43,000 mobile home parks across the United States.

As a business, the mobile home park rents (or sometimes sells) lots to mobile homeowners - offering a set of services and amenities, like electricity, garbage and recycling services, water, etc. Often, they cater to a specific group, like an older crowd or a summer beach community, etc. Some even have perks like playgrounds or pools.

Depending on the state, there are two types of mobile home parks – those that rent or lease lots and those that sell lots to mobile homeowners.

Where Are Mobile Homes Located?

Mobile homes are mostly concentrated in the southern United States.

wholesaling mobile homes locations


Wholesaling Mobile Homes Vs Wholesaling Mobile Home Parks

A mobile home park is big business and needs to be analyzed as an investment from two perspectives –

  • An investment in real estate plus its attributes as
  • An ongoing business entity.

Considering there are many variables and moving parts to a mobile home park/business, you might want to consider consulting a seasoned attorney or business broker. Consider –

  • How many lots, and how much do they rent for?
  • Who pays for water and sewer services?
  • Are the utilities public or private?
  • What are the historical occupancy rates for that mobile home park?

Until recently, most mobile home parks were owned and operated by a single owner without professional real estate experience. Given this unique history of ownership, many mobile home parks have great potential that, with a few improvements, could attract well-paying long-term tenants and impressive profits.


Final Thoughts On Mobile Home Wholesaling

Over the past few years, many homebuyers have been priced out of traditional markets. The demand for mobile homes as a viable alternative has created a market primed for mobile home real estate investing and wholesaling.

If you’re looking for a step by step training on how to wholesale real estate of all types, a community of high-level wholesalers and real estate entrepreneurs, and weekly expert mentorship, check out our free training on how to start a profitable wholesaling business in 45 days or less today!

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