Structuring a mobile home for sale by owner deal can be a very good option for both sellers and buyers, provided that both parties are acting in good faith. Obviously, the contract must be clear and understood by both parties. Here we’ll discuss why from a mobile home park owner’s perspective and from a resident’s perspective.

In today’s economy it is nearly impossible for low income families to own a home. That is unless we are talking about mobile homes. Mobile homes are significantly more affordable than stick built homes. In addition, some mobile home communities can be close-knit and family friendly. Let’s explore the mobile home for sale by owner contract model, assuming the home is located in a mobile home park.

Does it Make Sense to Own a Mobile Home in a Park?

Many prefer living in a mobile home park to living in an apartment complex. That is because mobile home parks usually provide ample space between mobile homes. Not having neighbors on the other side of the wall is definitely a strong selling point.

The downside to owning a mobile home in a park is that you don’t own the land and therefore you have to pay lot rent. This also means that your home won’t appreciate like a traditional stick built home. In fact most argue that mobile homes depreciate.

Why Mobile Homes for Sale by Owner Are a Good Option

Let’s look at why mobile homes for sale by owner are a good option from the perspective of the seller and the perspective of the buyer.

Mobile Home Park Owner’s Perspective

I’ll let you in on a secret. A large majority of mobile home park owners don’t want to own mobile homes. They would much rather have a park full of tenant owned homes (TOH). There are various reasons for this. One reason is that mobile home park owners don’t want to deal with repairs and maintenance, if they can avoid it. Another reason is that these owners want long term tenants, because these are much higher quality tenants than short term tenants.

This means that a large number of mobile home park owners are motivated to sell park owned homes (POH). This is especially true when it comes to mobile homes that need work. In fact, it is not unheard of situations where owners give away mobile homes needing work to good residents that will improve the homes.

The challenge for the seller is finding the right buyer. Although mobile homes are much more affordable than traditional homes, some mobile homes can be very expensive. Mobile home park residents are typically low or mid income families. It would be extremely difficult for these families to pay even $10,000 for a mobile home. In addition, obtaining bank financing for a home where you don’t own the land is extremely difficult.

Mobile Home Park Resident’s Perspective

If you already live in a mobile home park, you are paying lot rent and most likely utilities. Every single month you are paying for something that you don’t own. If you owned the home, you would only have to pay lot rent. Generally lot rent is about half the amount of home rent. At my mobile home park we charge $300 for lot rent and we rent homes for about $600 to $700.

To put things in perspective, let’s look at the total cost over a period of 5 years. Paying rent in the amount of $700 per month for a total of 60 months adds up to $42,000. That’s $24,000 more than if you were paying lot rent only!

Personally, I would much rather own a home than rent. With the money saved, I would be looking to buy my own piece of land to later move my mobile home to.

The challenge for the buyer is not having thousands of dollars to buy the mobile home and not being able to obtain bank financing.

Mobile Home For Sale Owner Financed

The ultimate solution is to structure a mobile home for sale as an owner financed deal! This means the owner will sell the mobile home to the resident and will provide financing similarly to how the bank would provide financing. The terminology can be a little confusing or intimidating for some people. Sometimes I use the terms rent to own to introduce the concept and later I get into the details of the deal.

A rent to own or owner financed deal can be an very good option because it provides a solution for both the mobile home park owner and the resident. Remember, park owners prefer to not own homes. They want to sell these and are willing to give a good resident an excellent deal. And let’s remember, residents don’t like paying rent with no end in sight. Resident’s would like to have their little slice of the American dream if it were possible.

How to Structure a Seller Financed Deal?

When doing seller financed deals, I typically require a very small down payment. That’s because I know the residents at my park would not be able to afford a large down payment. Then I do the math so that the monthly payment is just a little higher than what the resident would pay if they were renting. Finally, I try to run the numbers so that the resident can own the home in 4 to 7 years.

With these numbers in mind I run some calculations to back into the purchase price of the home. This is only for the purpose of conducting a sanity check. Because, the reality is that I want the buyer to succeed and for that to happen the monthly payments must be affordable and the duration of the loan needs to be as short as possible.

How to Find a Mobile Home for Sale by Owner?

By far, the best way to find a mobile home for sale by owner is to make a lot of phone calls. Call every single mobile home park in the area you want to live in. First, find out if the park owns homes. If it does, then try to contact the owner directly and go from there. You may have to make several calls to the same park, but don’t give up. Remember, many mobile home park owners don’t want to own homes.

There are many resources for low income Americans, but one worth checking out is the Rural Development US Department of Agriculture.

If you are a mobile home park investor I recommend the article on how I bought a mobile home park with $36,000.