044 Own a Successful Mobile Home Dealership on a Budget with Doug and John

In today’s Mobile Home Investing Lessons podcast #44 we’re talking with active mobile home investor Doug. Doug has been an active mobile home investor in the state of Texas for over two years. Doug can now add to his title, Mobile Home Dealership Owner and operator.

It’s been incredible to watch Doug bust-his-butt and grow his mobile home investing knowledge, returns, reputation, and now his own used mobile home dealership.

Watch today’s podcast and discover…

• How to start your own used mobile home dealership?
• How to end things the right way with the wrong business partner?
• How to build an ethical and successful mobile home investing Empire?

Disclaimer: Most investors can be wildly successful without ever building a mobile home dealership.

Now it’s a family business!

Doug was able to retire his wife from her full-time career. Now she works in the family business at the mobile home dealership lot when needed. It certainly does not hurt that Doug’s wife is bilingual and just as hard of a worker as Doug.

Doug’s team members included:

• Mobile home moving companies: Doug outsources this task to different third-party mobile home moving companies he likes and trusts.
• Rehab crew: Paid for and maintained by Doug.
• Office manager: This role is filled with Doug’s wife. Overseeing day-to-day management of the dealership and more.
• Sales agent: A young go-getter handling office duties, showing properties, closing paperwork, due diligence, and more. This agent is licensed and working underneath Doug as a mobile home sales agent.

Since this is now a family business, Doug lets his payment-buyers know that they will be dealing with him moving forward. Doug lets his payment-buyers know he is careful with his money, checks backgrounds carefully, and wants to make sure payment-buyers have the ability to repay for the home. If the payment-buyers do not pay, then he will be taking action and quickly repossessing the property.

Pro Tip: Doug gives a ton of great tips throughout the video. However, it may be wise for you to not follow this specific advice about disclosing that you are the business owner. It can be very helpful for you to appear to work with a company. This way you don’t have to be the top dog ultimate decision-maker. This way you can be the “good cop” while the projected company remains the “bad cop”.

Doug’s Business Models

Doug does part of his mobile home investing business inside other people’s local pre-existing mobile home parks. Doug also does many mobile homes transactions when the home must-be-removed from current land. Doug pays for the mobile home and the transportation costs back to his dealership.

In today’s video Doug talks about his three strategies once the mobile homes get to the dealer’s lot:

1. Doug pays his full-time rehab crew to rehab the mobile home to rent-ready type of standards.
2. Doug resells the mobile homes As-Is without putting any money into the property.
3. The as-is mobile homes are shown to buyers. Some of these future payment-buyers agree to prepay for all the repairs to be completed by Doug. In this way Doug will not have to pay out-of-pocket to have his rehab crew do the work.

Pro Tip: You can resell quickly if you resell for below-retail prices. Doug was taught to buy mobile homes at really good prices. Doug resells at competitive prices and therefore has multiple qualified buyers to choose from.

Doug says, “Homeruns are awesome, but you make your money in doubles and singles.”

Doug is reselling more than 50% of his used mobile homes on monthly payments that are moved to the buyer’s own land. That is right!… Doug is reselling the mobile home and having the buyer pay for the transportation and set up costs to the buyer’s very own land. Land with electric, water, sewer or septic and ready for a manufactured home.

Typically, Doug aims to receive all his invested money back Day #1. Remember payment-buyers pay a nonrefundable fee to Move-In that may equal $5000-$10,000 or more depending on the manufactured home and location. Doug then creates a note for another 7 to 10 years of cash flowing payments with interest.

Once a mobile home is sold for cash or payments, Doug gives the new buyer 30 days to remove the mobile home at the buyer’s own expense.

Doug’s interesting transportation twist: Doug knows that when a mobile home travels down a bumpy road the inside of the home may shift or break. Cosmetic cracks and blemishes develop in the walls, ceiling, and tiles along the mobile home’s journey into its new location.

Doug tells every mobile home buyer on his sales lot that these cosmetic cracks and blemishes may develop. If the buyer decides to use a third-party mobile home mover, then the buyer alone will be responsible for any cracks and blemishes. However, if the buyer decides to purchase the moving costs through Doug, he will make sure the mobile home looks the same as it is on the sales lot.

How can Doug guarantee he will fix the repairs? Because Doug charges the buyer extra money on top of the moving cost. Example: It may cost $4000 to transport a single wide mobile home with mobile home transport company A. However, purchasing the move through Doug will cost the buyer $4500, however Doug will make sure any cracks that develop because of the move are fixed.

Conclusion, most of Doug’s buyers purchased through him because they want the home to look the same.

Educating your buyers

Whether Doug is selling a manufactured home for all cash or monthly installment payments, he always makes sure to educate each on the location the home is moving to and pulling correct city/county Manufactured Home Moving permits. This is because some municipalities will restrict what type of manufactured homes can be placed within the county or city limits. If a buyer purchases a mobile home that is too old or small for the county, this buyer would be in a difficult and potentially costly situation.

Pro Tip: We are here to help others. In situations where good payment-buyers need some help, aim to work with the payment-buyers that work with you. Doug discusses a time where an elderly woman needed help cooling down the mobile home she was purchasing from Doug via monthly payments.

Doug instructed this always-on-time payment-buyer to hold off on making the next 2 monthly payments. Use this money to purchase air-conditioning units, Doug instructed. These payments will simply be pushed to the end of the payment plan. This allows for a very win-win solution that makes sense under the circumstances.

When it comes to homeowners’ insurance, Doug is a stickler that every one of his payment-buyers buys and maintains mobile home homeowners’ insurance prior to closing. Prior to closing Doug confirms he is listed on the buyer’s insurance policy as Mortgagee and/or Additionally Insured.

How Doug started his own dealership?

While buying and selling mobile homes Doug met the gentleman that owned the new manufactured home dealership in the right side of the video at the beginning of the podcast below. This gentleman has provided a long-term lease to Doug for the land.

• Doug gets to rent the land.
• The landowner gets decent rental money, plus other perks from Doug.

In addition, rental income, the landowner receives Doug’s help on a regular basis with other tasks. The landlord gets to pay for and higher Doug’s rehab crew to fix any mobile home repair issues. Also, the landowner gets Doug’s help to sell any used mobile homes the landlord receives through trade-in.

The landowner agreed to rent Doug the land because it makes good business sense, and because Doug is a hard worker that is extremely ethical. Treating others right goes a long way in business.

Location is important. If possible, aim for your dealer’s lot to be located around other manufactured home dealerships and mobile home sales lots. Ideally this future dealership of yours is also located on a semi-main road in the area with high traffic.

Steps to build your own used mobile home dealership.

If possible, travel in person to your local county building department. The Building department should be located inside the city office along with the Tax department, Property appraiser department, Code department, and maybe even Permit office.

Doug advises you explain your situation to the building department and what you’re looking to do concerning a used mobile home sales lot in the area.

You will likely meet some resistance. There are way more people that do not want you to build a mobile home dealership in the area, versus the ones that allow this. Stay persistent! Aim to figure out solutions around temporary obstacles in your way.

1. See your local county Building department.
2. Obtain Fire permit, 911 address, and Mailbox.
3. Figure out your specific utility situation. Is electric needed if a generator can be used? Can utilities be used from a neighboring property like in Doug’s example from today’s podcast? Are water and sewer connections absolutely required? Is an office absolutely needed? What constitutes an office? How much land is required for a dealer’s lot? What type of road construction is required? Obtain three quotes from any electricians, plumbers, septic specialists, paving companies, etc. before signing a contract with a company.
4. Signage. Confirm with the state and local county what is legal. Be proactive to ask questions about size, height, material and distance from the road. Doug’s advice is to make sure to get the names of people that give yo...