Considering buying mobile home investments? Here are the steps to follow:
Step 1. Why Mobile Homes
Before buying mobile homes in Chicago, IL, ask yourself: what is my goal with mobile home investments? Will I be reselling the mobile home after my purchase? Am I looking to renovate this mobile home? Am I looking for mobile home investments in a retirement community? Am I looking for mobile homes on larger lots? These answers will guide you to finding your ideal purchase.
Step 2. Locate the Mobile Home
There are a handful of ways to find mobile homes to buy. First of all, you can call us at 312.313.9505. and we can help you find what you are looking for in Chicago. You can work with a Realtor who has access to the multiple listing service, or MLS. You can also find properties for sale by owner on public posting boards online. There are also public auctions held by cities and counties in IL that frequently offer mobile homes for sale, usually due to unpaid taxes. Working with a real estate professional might be ideal if you are new to buying mobile home investments, they know the tips and tricks of the trade.
Step 3. Evaluate the Mobile Home
Real estate professionals have easy access to most sources of information for research on mobile homes. It does not hurt to do your own research, just to double-check.
Search the county records for the deed and ownership history. You can usually only do this on mobile homes that do not have lot rent. Make sure to look up the property taxes, if there are any open certificates and you purchase the property, the owner might be able to take the property back from you before the waiting period is over, typically 4 years. Are there any deed or usage restrictions or building requirements?
Review the physical characteristics of the property, will it be large enough for your plans? Is there an excessive amount of renovation that needs to be done? Is it on a canal? Does it have direct access to the utility system? Are there plans for utility expansion? Check into the plat maps and any surveys available to make sure there are not any surprise easements you are unaware of.
Step 4. Finance Your Mobile Home
You’ve found the mobile home investment you want to buy. Now it’s time to fund the closing! How are you going to do that? Do you plan to pay cash, or do you need a loan? It is a lot more difficult to buy a mobile home with a loan from a bank than it is to buy a traditional building, residential or commercial. There are only a handful of banks that will loan on land with a mobile home, and they might require a much larger down payment. Another option would be to form a partnership to invest in mobile homes where you form an agreement with one or more other investors to pool your funds to buy a larger portfolio of mobile homes with larger returns!
Step 5. Hold Your Mobile Homeome
Now that you’ve purchased your mobile home investment, what is your holding plan? Are you going to flip it right away, or will you hold it for a few years? Keep in mind, the faster you make a profit, the larger tax you may have to pay. The longer you hold it, the less capital gain tax you will have to pay. Keep in mind there are usually owner’s association dues and lot rent, and if the mobile home comes with land, there are annual taxes.