Mobile Home Investing Isn’t Sexy

It’s not sexy cocktail hour conversation but there is good money to be made in the mobile home market. There are several ways to make money at the low end of the homeowners market. Seller financing mobile homes is among the most profitable. The bottom line is that Americans as a group are becoming poorer. Does this mean they shouldn’t have somewhere affordable to live?


This statistic is a little old but according to a 2013 U.S. Census Bureau report there are 8.6 million mobile homes in the United States with an estimated 12 million people living in them. That doesn’t include manufactured homes that are often grouped together in communities similar to trailer parks. Warren Buffett bought Clayton Homes for $1.7 billion (2003 dollars), one of the country’s largest manufacturers of mobile homes.

People Will Pay $19,000 for a Used Mobile Home

Mobile homes (not the dirt) are a popular option when people want to own a home but can’t afford a traditional stick built home. When you seller finance, you can buy a decent mobile home for as little as $3,000 and sell it for $19,000 on a ten year contract. It’s not only the sales price where you make a profit but the interest comes in at about 9%. When you seller finance a mobile home, you invest as little as $3,000 but collect interest on $19,000.

The biggest thing some investors need to overcome is that investing in mobile homes for sale isn’t the sexy end of the industry. If you own and manage an entire trailer park, you’ll probably have to deal with some of the troublesome members of society such as drug addicts, criminals, and the unemployable. But not all mobile homeowners fit these stereotypes. Owners also include two-income families making minimum wage by flipping hamburgers and retirees living on a fixed income. These are people that value ownership over renting. They understand the fact that if they are paying more than half of their earnings to put a roof over their head, it’s better having a fixed mortgage rather than be subjected to unending rent increases. In 10 years, they’ll own the home outright. These people make sure the seller financed mortgage gets paid every month.

Consider the buyer of a $19,000 mobile home at 9% on a 10-year contract. As a seller financier, you’re going to ask for at least a $1,000 down payment (reduces you’re outstanding investment to $2,000) just to be sure the people you’re financing have some skin in the game and can demonstrate some financial responsibility. That means you’re financing $18,000. The buyer repays the loan for slightly less than $230 per month. Of that, the interest you receive on your $2,000 investment starts at $135 per month. You collect more than $1,570 in interest the first year alone. By the end of the second year, you’ll have collected well above your original $2,000 investment in interest alone. The last eight plus years of the mortgage are pure profit to you.

Senior Only Parks Are Lower Risk

A good strategy for owning a trouble free trailer park is investing in a 55 and older park. Many of these parks have other rules such as requiring dogs to be under 20 pounds. Another common requirement is that owners always be present when guest are staying at the home and limiting the number of days a guest can stay. People willing to comply with a few sensible rules typically aren’t going to be people that cause trouble and attract the police.

The past three years have seen trailer lot spaces increase rents an average of 30%. In parks where the trailers are mostly owned by the tenants, these tenants are willing to endure annual rent increases rather than try to come up with the $3,000 it costs to move a singlewide mobile home to another park. Another tactic that investors are employing is offering park managers a monthly bonus for collecting 100% of the rents on time. There is a substantial amount of money to be made in the mobile home business. That’s probably why Warren Buffet bought Clayton Homes Inc., the largest manufacturer of mobile homes, more than a decade ago.

Do you have thoughts or experience with mobile homes? Please comment below. If you have a question that might interest other readers or a suggestion for a future article please submit ideas to [email protected].

Brian KlineAuthor bio: Brian Kline has been investing in real estate for more than 35 years and writing about real estate investing for 12 years. He also draws upon 30 plus years of business experience including 12 years as a manager at Boeing Aircraft Company. Brian currently lives at Lake Cushman, Washington. A vacation destination, a few short miles from a national forest. In the Olympic Mountains with the Pacific Ocean a couple of miles in the opposite direction.


  1. Hey Brian, great article. I started off similar but buying cheap foreclosure SFR’s and selling with seller financing. Did very well and encourage others to look into SFRs and Mobile Homes as well, especially those starting out with limited capital. Only think I would add would be to make sure they research Dodd Frank laws if selling to owner occupants. Thanks for the article.

    • Hi Jeff,
      Thanks for your insight. I absolutely agree with you that investors need to research and understand the Dodd Frank laws and I should have included that in the article. Investors should also be familiar with state laws and regulations.
      Brian Kline

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