When you’re getting started with mobile home investing there’s some hidden costs you need to know about, because somebody has to pay for them. When we first started we actually paid these costs ourselves. No one really talked about them. We didn’t see a ton of information about this in books or even on YouTube.
We don’t want these costs to be unexpected for you. So in this blog we’re going to talk about the six hidden costs in mobile home investing that no one talks about. Over the years, we’ve learned how to avoid them and pass them on to our clients. And we want you to be able to have these same tricks in your tool belt.
Hidden Cost #1 Closing costs
With mobile homes it should be pretty simple, it’s just transferring the title over and to the new owner’s name. And this can be done at any MVD or third-party MVD. In Arizona this is about $7 per title at the regular MVD. And it can go up to about $25 per title at the third party.
So it’s super cheap, nothing major, but we just wanted to make sure you’re aware of it. You can add these costs to your closing costs and have your buyer pay for it. But they’re so inexpensive that we usually come out of pocket and pay for them.
Hidden Cost #2 Property taxes
Depending on how you structure your deal, either you or your seller should be paying for those property taxes. It’s really easy. What we do here in Phoenix is go right down to the county treasurer and get it paid for. It’s really simple and quick.
And most of the time the property taxes are no more than $300 for the entire year, so it’s not a ton of money. And you can prorate them based on who was occupying the home during the time that the tax was assessed. So there’s a lot of ways to do it. It’s not a lot of money but it’s something that you should know about.
Hidden Cost #3 Car maintenance and fuel
Trust us you will be using your car quite a bit in this business. And so we usually account for this as a weekly expense.
Put aside at least $40 to $50 a week for gas because you’re going to need your car. You’re going to need to drive to your inspections, you’ll need to drive to your closings, to the MVD… all of that costs money.
In the beginning you’ll be driving a lot yourself until you can get this position outsourced. Just know you’re going to have to do what you have to do to get the deal secure. So take notice of this one.
Hidden Cost #4 Learning
You’re going to have to learn how to do this. And you have a couple of choices here. You can either piece things together that you find on blogs and on YouTube, or you can actually go and find a mentor or coach to help give you that blueprint to get you started.
Let’s just say you choose not to use a coach. You’re going to most likely learn through the school of hard knocks later on because there’s going to be those opportunity costs that you missed, or just the costs of learning from some of those failures and mistakes that you’re going make.
So we like to say put at least $500 to the side to learn, to get the knowledge. Whether that’s through a course or whether that’s working with another mentor. Whatever you need to do. Find someone that’s already successful. Follow their blueprint and pay for their knowledge.
Hidden Cost #5 Utilities
Even if you negotiate your Lot Rent utilities are something that you’re still going to be responsible for. So you’re going to want to make sure you understand where the utilities are coming from. Is the park metering them? Will you have to start the new service with a utility company?
This is something that is not going to be a ton of money. But getting the electricity turned on, getting the water, sewer, trash and all that stuff turned on is what you’re responsible for.
Take notice, especially with different utility companies in your county, some of them will make you pay a deposit just to start. We found that this deposit can be waived with certain requirements, like a credit score, or having worked with the utility company in the past. Check for that and just be aware of any security deposit for starting the service
Hidden Cost #6 Dealers License
Depending on the state you’re in you are going to spend anywhere from $500 all the way up to $1000 in obtaining this license. It depends on your state. So you want to make sure you understand your regulations.
Some states allow you to do a couple deals before you get licensed. I’ve even heard of other investors using their family member’s names to do a couple of deals before they get licensed. But it’s something that you should be aware of. We’re licensed dealers in our state, and we definitely, highly recommend that as well.
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