Why settle for
Investment Base Hits when you can be hitting Mobile Homers?
Calling all Mobile Home
Lonnie Dealers and Mobile Home Park Owners with Vacant Spaces to Fill!
Are you ready to avoid many of the risks of the
traditional mobile home investment program and join the
Program for Mobile Home Investors? How about getting paid by not only
the family you sell the home to but also by the Mobile Home Park Owner!
Click Here to Watch the Launch Webinar
The Mobile Homer Deal
Making Money with Mobile Homes in the Modern Era
By Frank Rolfe and Dave Reynolds
For many years, we have been hesitant about promoting the concept of doing
Lonnie deals (a name familiarized by Lonnie Scruggs in his book Deals on
Wheels). However, we always keep our eyes open and our mind available
for fresh ideas and improvements to existing ideas.
There exists today an enormous disconnect
between what the mobile home industry manufactures and the customer demands.
And the financing to purchase homes, on the part of professional lenders,
has virtually completely dried up. The demand for affordable housing is
there now and will always be there, but nobody has stepped in to meet that
A while back, it occurred to us that maybe
there was a better way to build the mousetrap. We did some experimenting,
and think we have hit upon that design. This program is the end result of
We are still hesitant to buy mobile homes
in mobile home parks that we do not own and sell or rent those homes under
the old methodology that was promoted in books and seminars in the past.
We still also feel that there is better stability and profits in owning the
actual mobile home parks. However, we understand that mobile home park
ownership is not feasible for some investors due to limited cash to invest
or else these investors may want to start small in the business.
Also, this program can be adapted to make
use of your Self-Directed IRA's. Forget the stock market, there are
park owners out there that will do their best to get you a great return on
your investment and share the risks with you.
We have devised a program that we believe
will make your Lonnie Deals more profitable, take away a lot of the risk,
and be a win-win solution for both the mobile home park owner and the mobile
home investor. And at the same time, we are filling that gap needed for
affordable housing and making more of our resident’s home owners.
What is a Lonnie Deal?
The term “Lonnie Deal” relates to a
concept promoted by Lonnie Scruggs in his book Deals On Wheels. We
encourage everyone that is reading about our new program to get a copy of
this book if you don't already have it as it will help lay the framework for
what you will be reading about in the
Original Book Available From Amazon Here
The basic concept is that you buy a used
mobile home, and then re-sell it, at a higher price, with a down payment and
monthly payments at a prescribed interest rate. These mobile homes are
normally located on lots in mobile home parks. The homes to buy are found
through “mobile home for sale” ads in the newspaper, through driving around
in mobile home parks and looking for “for sale” signs in windows, and often
through mobile home park managers who give leads.
A successful “Lonnie Dealer”, according to this business model, would have a
large inventory of notes paying every month.
This business model takes advantage of the credit void that exists in the
world of used mobile homes. For most mobile home buyers, there are no
established channels of credit available. This segment of the housing market
is reliant on cash or seller carry. Traditional models of consumer credit
ranking fail in affordable housing, as most everyone has lousy credit due to
health issues or other high-dollar calamities. But often those credit scores
are not an accurate reflection of the customer’s ability to pay. Having a
job, and needing a place to live, are often the two deciding factors in a
customer getting the bill paid.
It is also a product of a housing market that ignores the affordable housing
niche. While there are hundreds of brokers and lenders on every corner for
homes from $150,000 and up, there are relatively few companies that broker
the $2,000 to $25,000 mobile homes. As a result, the opportunity is there,
in abundance, to step in and satisfy this void.
Over the past 20 years there have been thousands of investors out there
doing these types of deals and with some being successful, some breaking
even and some actually losing money. There is always the risk that the
investor (you) would end up having to constantly repair the homes if your
buyer moved out. Also, when you were rehabbing or trying to sell the home
you also had to pay lot rent. Ten years ago, the lot rent was relatively low
and the average rent nationally was in the $150.00 per month range. With
rents now averaging over $250.00 per month and as high as $600.00 in some
markets, owning mobile homes in parks where you have to pay the lot rent on
vacant homes can eat away your profits quickly.
So how do you buy mobile homes, sell them for a nice profit, and carry the
financing and make money without getting burned?
Mobile Homer - a program
that will help to guarantee your success!
Here is the solution and one that will increase your success of buying used
mobile homes and earning an attractive return on your investment.
The program actually has both types of
investors in mind.
The first type of investor will be "hands
on" and the second type will be looking for an experienced park operator to
do all the work for them (possibly using a Self Directed IRA).
If you fall into the second category, then
you should still read the information below to understand the business but
then in addition, here is a link to the page describing the
"Done for You" program whereby you partner with the mobile home home
park owner and they use their experience and resources and do the work for
Here is how the program works:
You first need to decide how involved
in the process you want to be. For example, do you want to find
the home, negotiate to buy it, move it in, rehab it, and then sell it
and collect the monthly payments? Or would you rather go with a
mobile home park owner that has the experience and resources to do all
of this for you (done
for you program), or maybe a combination of both.
Next you decide how much you want to
spend for the home which will include the purchase of the home, rehab,
moving, and setup.
Then you will need a mobile home park
to do business in. You can go out and find one on your own or else
you can browse through the list of mobile home parks that have been
chosen to participate in this program and that will provide the
Guarantee and some great discounts and bonuses for you to do business in
What is the
Guarantee? Basically, it is a guarantee by the park
owner that they will offer enough incentives, bonuses, and other assistance
to make sure that you have the highest chances of success in meeting the
returns on investment that you are requiring. Each park owner will
come up with a program that they think will help to make your mobile home
park investments as successful as possible while reducing the potential
risks that the traditional model had. If you follow the guidelines
setup by that park and you fall short of your expectations, then you may be
able to get the park owner to offer more incentives to get you back on
When you think about this you are going to
be making the mobile home park owner some significant equity and profits and
any smart park owner would be happy to make sure that this is a win-win
concept for the both of you.
When you review the examples that are
below and on the individual park offerings you will be able to gauge the
advantages of this new program. While we or the park owner can't
really offer a guaranteed return that you may or may not have, what we can
do is show you how this new program can increase your returns by 20% or
more. For example, if your normal return on a mobile home deal is 10%
and you put that home into this program, that return could be as high as 30%
with all the concessions and spiffs that the park owner will give you.
This is the program in a simple nutshell
so now let's discuss it in more detail. And remember that this is a
new program and we welcome any comments you may have to make it better.
What is the Problem with Mobile Home
Investments as Originally Promoted?
In our opinion the original Lonnie Deal
concept had some fundamental flaws that may render the business model
unprofitable for many investors. There were some basic assumptions left out
of the model, such as the cost to renovate the used home into a quality home
that is saleable, the fact that many buyers do not pay to the end of the
loan commitment, and that most homes require substantial renovation between
buyers, often erasing any income for the home for a period of many months.
The original model went something like
this: you find a used home in a park for $4,000, sell it for $8,000 with
$1,000 down, and finance the balance at 12% interest for 36 months. On
paper, this transaction would yield a whopping 85.11% return on your money
as demonstrated in the table below.
Less Down Payment Received
Net Cash Invested
Sale Price of Home
Amount of Note
Term (in months)
Internal Rate of Return (Yield)
Sadly that is not what always happens.
Here’s how we have seen it work in many cases.
You buy the home for $4,000 and let’s
assume you can sell it for $8,000 with $1,000 down.
The customer pays for a year, then damages
the house and runs off.
It costs $2,500 to put it back together
enough to sell it again.
And the whole time it is empty, the lot
rent mounts up at the mobile home park.
Here’s the scorecard: you have $3,000 in
the home from the original purchase, another $2,500 from the rehab plus
another $1,000 in lot rent. Assuming the buyer paid you for 12 months
you received $2,790 in payments.
You are now in the home for $3,710
($6,500-$2,790) and now it is only worth $6,000. You turn around and sell it
again but now your potential profit is $2,290 and your return is not going
to be near as good as projected.
WAIT: whether or not you agree with
the old model and the returns that it generates, we have some good news.
If you were able to buy and sell that home without a hitch in the prior
example and actually generate a return of investment of 85.11% on your
money, then you would have been even happier under our new program.
Let's take that same example and show you what could have happened under the
Assumptions: Park owner really wants
the home to stay in the park but doesn't have the capital to buy it.
However, they like working with you and are willing to help offset your
price of $3,000.00 by paying you $500.00 to buy the home and sell it.
Less: Spiff from Park Owner
Less Down Payment Received
Net Cash Invested
Sale Price of Home
Amount of Note
Term (in months)
Internal Rate of Return (Yield)
Your return just
increased by over 20%
This is just one simple example and the
spiff may be a lot rent reduction, or a move-in credit, or all kinds of
different things. No matter what the spiff is, you have both just
benefitted. The park owner gets to keep a home in the park for only
$500 and you are able to increase your return by having less capital in the
Ok, back to the program. There are some basic economic assumptions in
the original mobile home investment model that have always held true and
will continue to hold true as long as we can foresee the future.
The first is the extreme
demand in the U.S. for affordable housing.
The Demand for Affordable Housing
There is a huge demand for affordable
housing. Affordable housing is, in fact, the fastest growing segment of the
U.S. housing market. It is essentially housing for people who are unemployed
to earning minimum wage and up to about $15 per hour.
Assuming an average total income of
$24,000 per year for these individuals and families, and believing the U.S.
government’s assertion that the healthy level of housing cost should not
exceed 25% of one’s wages, then the correct budgeted housing cost for this
group is around $500 per month. So where can a family find housing for $500
The normal option that comes to mind is
apartments. However, let’s look more closely at that option. An apartment is
not really the American Dream. There’s no privacy, with neighbors pressed
against all walls and floors and ceilings. And there’s no yard for the kids
or dogs. And the living quality of most apartment complexes in this price
range is horrid. Despite the media always loving to use mobile homes as a
scapegoat for everything that goes wrong in society, it’s actually the
apartments that are a large incubator for drugs and gangs and everything
that goes with it.
For these reasons, folks who live in
apartments dream of getting out of them. And if you are not a higher wage
earner, and you want detached housing, your only option is a mobile
home set up in a mobile home park.
Another segment of the population that has
an insatiable appetite for mobile homes in parks are Hispanics. One of the
biggest shifts in mobile home park tenancy in many parts of the U.S. has
been the growing segment of the Hispanic demographic that lives in mobile
home parks (and we would add that this demographic as a whole usually makes
up our best residents in the typical family park).
And this demand does not appear to be
waning in the future. As apartments become continually less desirable, and
incomes become lower and more stagnant, there seems to be no end to the
demand for affordable detached housing – and mobile home parks are the best
solution to this problem.
What the Customer Wants
The average mobile home customer is
looking for several simple attributes:
First and foremost... they need FINANCING
- otherwise they could just go to the dealer or bank and buy the home
A total monthly price, including lot rent,
of about $495 per month (of course this will be higher in some areas but in
about 80% of America this is a good number to work from).
This is not a number pulled out of the
air, but actually what they can afford based on normal underwriting
Now, that’s a pretty easy customer to
It’s not that there’s something wrong with
this set of priorities. Maybe those of us who live in more expensive housing
are too demanding – maybe we’re too focused on materialism and not
separating wants from needs. The important point is that you need to supply
what the customer wants – and that’s a decent house at $495 per month. Don’t
put your own tastes and wishes into the equation.
Outside of the house, there are a few more
things that the customer wants.
They want to be treated with respect. They
know that they do not earn high incomes, but there’s more to life than
money. They want to be given the same treatment as someone buying a $500,000
custom home. They want to be shown the house properly, be given a reasonable
criminal and credit screening, and exchange their funds for the key.
Many mobile home and mobile home park
investors in the past have missed this simple request. They delight in
bossing the customer around and making snap, often irrational, decisions on
who is “worthy” of buying from them and who is not. This is not only in
violation of Fair Housing, but is in violation of basic principles of
business that make it work.
The Mobile Homer Plan
The NEW model that we have come up with is based on the reality of the
mobile home business, and is constructed to remove most of the risk of this
type of investing, through a “partnership” with the
mobile home park owner, as well as better thought out mechanics
of the deal.
The price for park owners
to list their property is $97.00/year.
Park Owners -
Sign up Here!
Home Investors are currently free
Please use the links below or at the top of any page to view all the
information and resources available.