On this episode of House Flip Masters Holly is joined by guest Tim King. Tim is the “King of Mobile Home Investing” and he got his start in mortgages before he got his start in mobile homes.
In the early 2000’s Tim started in the business of mortgage originations and was introduced to a family friend who had a mobile home dealership. Because of this relationship Tim found a niche because not many people were doing mortgage origination for manufactured homes. While admittedly these deals didn’t pay as much Tim found that he didn’t have a ton of competition so he kept at it.
In 2007 when the mortgage crisis hit single family lending slowed down slowly but manufactured housing Tim says literally disappeared in 30 days. Being a serial entrepreneur Tim saw that this was a problem and if he could find a solution to this problem he knew that there was potential for some serious profit. Tim started researching and learned about creative finance and also found a book called “Deals on Wheels” by Lonnie Scruggs. Tim had the education when it came to financing but it took this book to really show him how to use his education and his solution to this problem to make a profit. Since there wasn’t competition in this area Tim got lucky and this area of real estate investing really took off for him. All of the real estate education that he learned from real estate investing gurus about single family financing he was able to apply to mobile home financing.
After years of doing this for a few years Tim got frustrated with dealing with park owners because a park owner has to approve a buyer before Tim could sell the home - so Tim decided to start buying the parks as well so that he could control the full operation.
Holly asks Tim to share what location he is doing business. Tim is currently doing business in Southern California, in the South Bay Area. Tim is always being told that he can’t make this business work in California because it is too expensive but he finds that he is doing just fine and doesn’t want anyone else crowding his market if they are too scared of how expensive the market is.
Tim shares with us his first two deals, which he says were very crucial deals in helping him learn all about the mobile home business and also about the park owners which he refers to as the gatekeepers of the park. He admits that during his first deals he now realizes that he really didn’t know what he was doing because he had no idea the fees and expenses that went into buying a mobile home when you are preparing to sell it. Tim says that a park with a high space rent is something to keep in mind because that can definitely take away from the overall profit from the deal.
Holly asks Tim if he still dabbles in buying and selling of the mobile homes or if he is only interested in buying the land that the homes are on. Tim says that he isn’t as motivated anymore to buy and sell homes as he once was 12 years ago but he still buys and sells on occasion and does Lonnie Deals from time to time as well.
Tim shares that he gets a lot of his deals from direct marketing and he works with a handful of parks where he is friends with the management. He finds that sometimes management is the reason why he stays out of a lot of parks that are local to him. Tim unfortunately hasn’t been able to get buyers approved in parks that he previously did business in because the management does not understand seller financing. He also shares with Holly that one park he was doing business in previously had 3 real estate agents that live there that would go around and bad mouth him and his business and tell buyers that Tim was doing something illegal and because of this Tim has not been able to do business in that park because of those realtors that don’t like or understand what he is doing with his business.
Holly asks Tim to share how he transitioned from doing deals on individual homes to doing deals with the whole park. Tim says that he knew that he needed to be fully educated before he would be able to move from a single deal to a full park because if he didn’t understand ever facet of it he knew he would not be successful in the business. Also, again, Tim mentions that the transition from single deals to dealing with the whole park had to do with management because it was getting too difficult to get his buyers on their dirt because of the strict guidelines different managements had for the parks.
When asked about what someone needs to do to buy a mobile home park Tim says that there are bank loans out there but there is a lot of work involved in doing a bank loan and the government, Fannie May, is starting to get involved with providing financing to communities. Tim says that Lenders are looking for nicer products, they do not want to deal with parks that have dirt roads, and pit-bulls tied to the fences. While their is financing available Tim says that it might be more difficult to get it through a bank loan.
When asked what his best advice is for someone interested in getting into the mobile home business Tim says that it is important to get educated. Because the return on mobile homes is a small return you need to be really good at calculating and making sure that your numbers are on point. Tim also mentions that Gary Johnston and Clyde Wilson put on an event every year called Financial Freedom that he and Holly believe is extremely beneficial. While seminars can be expensive upfront but they will save you money in the long run.
Tim also mentions that there are a lot of real estate investors that he has been fortunate enough to learn from as well; people that he mentions are: Jack Miller, Jack Shea, Dyches Boddiford, Gary Honston, Pete Fortunato, John Schaub - all of which have been a wealth of information for Tim on his mobile home journey.
Tim learned a lot about what he is doing through a group called Mobile Home University and advises that he would not even entertain the idea of buying a park if you have not attended this event.
If you are interested in learning more about Tim he can be reached at TimKing2@gmail.com with any questions you might have for him.