Before I get a mail-box full of hate mail… let me first say that every market is different and this statement isn’t true in all cases and all markets. 

I say this now because in my market, buying a traditional Single-Family rental that cash flows is almost impossible. You see, I live in Southern California, where the lowest price you can buy a rental is around $350,000 (and that’s in the boondocks, 50 miles to 100 miles away from where you live). 

That will pretty much negative cash flow for a while. 

So what’s the other alternative if you’re a cash flow investor?

Mobiles homes…

Yup, those” unsexy” depreciating trailers.

But, before you leave, throwing your hands up in desperation and failure…

Let me tell you 3 reasons why mobile homes in a hot market location, is much… much… much better for cash flow and ROI than almost any other RE asset.

Cash flow with no tenants

1. Low Cost High Income

Rather than pay over $200,000 for a house to get $150 of cash flow a month, why not pay $50,000 for $600 cash flow a month? 

Sounds too good to be true? 

Well, it’s not and here’s why. 

A mobile home, as you might already know, is inexpensive. You can buy one for $30,000 (under market value), put another $20,000 in repairs and it will cash flow $600 easily.

And that’s AFTER they pay the space rent of $600 a month. 

How is that possible?

Well, the market rents in that area could be $1,500 a month. Your tenant-buyers total payment for the month (space rent plus your monthly payment), is $1,200. That’s much lower than the market rents of $1,500, and he/she actually owns the house. 

This makes tenant-buyers happy. 

And if you’re asking about maintenance and all that…. well lets show you why you never have to deal with the three T’s of RE (tenants, toilets, turnover) with this method


2. No landlord headaches

With this method you become the bank.

You never have to deal with tenant, toilets or turnover every year. You actually sell the mobile home and never have to worry about it being a depreciating asset because you don’t own it…

…. you own the paper.

Owning paper sounds ridiculous? 

Not for billionaire investors like JP Morgan, and all the other giant investors and sharks. A piece of paper that obligates someone to pay you so much with interest or they lose the property to you.

With mobile homes, you ALWAYS buy at a discount (.20 cents-.40 cents on the dollar), so you’re ALWAYS safe. Take the previous example. If you bought a home for $30,000 and put $20,000 into it…. you’re selling it at $80,000 or more (at market price).

If you ever (and that’s a big if), you get the home back in (lets say) 5 years, the home might have only depreciated $10,000. At that point you’ve gotten most of your money back and then you can re-sell your home at $70,000 and create another note (piece of paper) to extend your cash flow.

But, this best part of all this, is your return…


3. Ridiculous returns compared with SFR

In rising a real estate market, your ROI is crap (3%-8% if it’s positive). 

But in mobile homes it’s still at a double digit return. 

Let’s go back to the previous example. 

If your all-in-cost is $50,000 and you sell. You ask for a down-payment of $20,000 which you happily receive. Now your all-in-cost is $30,000 with $600 of cash flow for 15 years. You’re financing $60,000 at 9% interest to your buyer. If you whip out your financial calculator, your ROI is 23%.

And in mobile homes… that’s actually a low ROI.

Creative investor and mobile home expert Andy Teasley at Millionaire Makers Next Generation easily makes over 50% ROI. 

To cap it off

There you have it… three reasons why you should switch your strategy to mobile homes until things pick for the SFR industry: Big Returns, no maintenance, low cost. 

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