Let's discuss the importance of understanding your local mobile home market, local buyers, and local sellers. By the end of the short list below, you should have a much better understanding of your plan and mindset moving forward into the coming months while investing in individual mobile homes and manufactured homes inside parks in the US.
Attention Sellers: This article was initially intended for active mobile home investors. However the information contained below absolutely relates to buyers that may or may not be looking to purchase your home for sale. If you have any questions please do not hesitate to comment them below or email me directly.
Pre-Disclaimer: The time of year should never negate a sale based on the current date alone. However, during different times of the year you should be aware of certain advantages and/or disadvantages as an investor. Win-win transactions happen 365 days a year. Below we will discuss what to expect in the coming months while investing.
A Mobile Home Buyer & Seller Yearly Cycle
You will notice around the second or third week in January that the amount of active potential buyers in the market are increasing. While early January is not considered spring it is noteworthy to mention that the general public will shift from “holiday mode” back to “normal life mode”. Additionally, throughout spring more and more folks receive their tax refund checks and become interested in the possibility of moving, upgrading, downgrading, and simply of home ownership. Keep in mind there are advantages and disadvantages tax time.
- Pros: Buyers may often have more money to pay as a move-in fee or down payment on a mobile home you are selling via monthly payments. Also, buyers may be more inclined to pay all-cash for your mobile home for sale.
- Cons: You may miss out on some deals due to a higher amount of temporary cash buyers in the marketplace. In reality this is a good and natural thing; every buyer deserves a safe home he or she can afford and is happy with.
Investing Status: Typically great time to buy & Great time to resell
Full speed ahead. Many kids are out of school and parents that are considering moving will do so in high numbers during the summer months. The greatest number of active sellers and potential buyers will likely be during these summer months in most markets. During the summer months you may also have beneficial warm weather in most markets that may allow you to invest with little headaches from mother nature. In some markets however we realize the summer months bring hurricanes, floods, and tornadoes. While these are valid concerns they are the minority; we happily carry insurance for this reason.
Pro Tip: Don’t wait until the Summer to begin investing. As a mobile home investor, many of the deals you will close may take days, weeks, or even months to come to fruition since the time you originally met the seller. This means that the summer months may not be the best time to start “brand-new”; starting in the winter or spring months will allow you to become well known in your local area and capitalize on the coming summer months. I hope this makes sense, if not please comment below.
Investing Status: Typically great time to buy & Great time to resell
Summer breaks are over, kids are back in school, and many of us have sunk back into our regular routines of day-to-day life. Based on experience the fall months tend to slow down slightly with regard to the amount of mobile home sellers and buyers active in the local market. With that said, there are still absolutely buyers and sellers in the market looking for nice-quality homes at a good value.
Investing Status: Typically great time to buy & a bit slower time to resell
If experience teaches that the fall months begin to slow down a mobile home investor’s resales, then the winter months will typically prove to be the slowest months to resell a mobile home investment property. Likewise, many sellers will not even choose to sell unless it is absolutely necessary for them to move during these colder and festive months. With that said, there are still absolutely some buyers and sellers in the market looking for nice quality homes at a good value; some of these buyers and sellers may be in a situation forcing them to move.
Investing Status: Typically great time to buy & Slower time to resell*
During holiday weeks, you will notice that your normal advertising and marketing strategies may result in a drastic reduction of leads and inbound calls. Specifically during the weeks of Thanksgiving, Christmas, and New Years, new calls from sellers and walk-throughs with buyers may virtually stop depending on your area. This is normal and to be expected.
Pro Tip: The start of the new year will typically bring more buyers and sellers into the market. Any mobile home you may be holding onto during the previous year will likely be sold in the first few weeks of January.
During the fall and winter months we must compensate for this drop in potential buyers and tenant-buyers looking for a mobile home to purchase during these months. We compensate for this delay when making purchase offers to sellers by factoring an additional two to three months of lot rent and holding cost that may be paid by you while you are aiming to resell the property. Aim to be transparent and educate the seller as to the winter months typically being slower times to resell a mobile home property.
Southern California, Nevada, New Mexico, Texas, Louisiana, South Carolina, Georgia, and Florida – Winter Destination States
Some states around the country receive a large influx of mobile home buyers and mobile home residents during the winter months. Markets such as Texas, Florida, Arizona, New Mexico, Southern California, and other Southern states increase their populations during the winter months from Northern Americans and Canadians wishing to retreat to warmer destinations for some portions of the winter. Depending on your state and depending on the local area, some cities and towns may actually see more mobile home buyers and sellers during these months. Inside these “winter destination states”, and all states for that matter, it is very important to understand the buying/selling supply and demand for your area during this time.
No matter the time of year, you are aiming to resell your investment mobile home as soon as possible. It is very important to saturate the local market so that all potential buyers and tenant-buyers that are actively looking to buy a mobile home will see your advertisement. Remember, every day costs you in holding costs and lot rent.
In addition to making sure that everyone sees your advertising message with your online and off line marketing, it is crucial that your price point and selling terms be attractive to a good majority of the population. Based solely on experience, when selling a mobile home at the correct* and accurate price/term, it should take no more than 20 serious potential buyers walking through your mobile home before one or two will want to purchase it. Disclaimer: If mobile home park managers keeps disapproving your buyers (and for other reasons) it may take more than 20 buyers through your home to resell.
*The word “correct” above is used to describe a retail selling price and selling terms that are win-win and satisfactory for both investor and buyer.
Pro Tip: As a mobile home investor aim to resell any investment mobile home inside of a park in 30 days or less. When purchasing any investment property it is critical to know your exit strategy before you offer any purchase prices/terms to your sellers. Due to the fact that you understand the resale market of your area, you should already know what price/terms will be very attractive and allow this mobile home to be sold to a low-risk buyer in 30 days or less.