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of investing in a mobile home, that a savvy homeowner, or an investor in mobile homes can do. If the homeowner rents out the mobile home after they have moved and the amount of rent exceeds what is going out in payments, or upkeep, it can be a profitable experience. However, many mobile home parks do not allow rentals. Two other methods that can be used, is to offer a lease purchase on the home, or sell by owner finance. Both of these methods can bring a profit because this type of financing allows a slightly higher price on the home, and the interest on the installment payments will bring a profit. Again, you need to always check on the rules of the park. Besides rules on financing, parks usually want to approve, or disapprove the potential homeowner before you can accept the contract for purchase.

Investing in mobile homes can be a very lucrative endeavor. Just like investing in real estate, you make your profit by purchasing at a low price. Depending on the motivation of the owner, and how much is owed, and the condition of the home, an agreement can be obtained fairly easily. Many times an investor can purchase a home with an agreement to take over the mobile home payments. This is called purchasing by "subject to". In the decision to purchase a mobile home you first have to consider what repairs and updates are needed. Then determine a price on the improved home that will fit in with the norm of the area, and type of home. A home that you offer an opportunity to lease purchase, or owner finance will sell quicker than with needing to obtain conventional financing.

This is an example of a recent mobile home purchase I made. I purchased the home by "subject to", and $500 to help the owner with her moving costs to an apartment. It was a small 3 bedroom, 2 bath doublewide. The amount left on the loan was $7,000, but only 3 years of payments. I invested $5,000 in the home, upgrading the kitchen, and baths, painting, repairing and staining porches, some landscaping, and a small roof repair. This was offered by owner financing, with a down payment required. The qualifying for this financing is by using the same standards as when renting. The price of the home was now $19,000, which was considered a good value, by those who viewed the home. The purchaser paid $18,000 because they negotiated changing the carpet out which they purchased and installed. They paid $3,000 down, and then paid $300 a month on the home for a 10 year period. In 6 months they paid an additional $4,000 sum off the principle. Now they have $11,000 left to pay, and are paying the same amount
a month, but it has been reduced to a time period of 7 years for payoff.

Besides the profit of about $4,400, which is figured by the difference of the purchase price, and repair and holding cost. Another point of profit on selling the home is the interest on the amount and time left on the loan the purchaser is paying. With figuring the amount of $11,000 left to pay, I will double my money, in other words, earning $11,000 additional income on the loan in the time period of four and one half years. Lucrative? You decide. The numbers are smaller when dealing with mobile homes, but return on investment can be higher than conventional real estate investing.

Here is a good source for figuring mortgage or loan amortization. http://banknewport.com Go to the mortgage tab, then to calculator.

Learn more about this author, Kathleen Couch.
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