I’m Steven Jack Butala.

I’m Jill DeWit, and this is The Land Academy Show.

This is episode number 2,115. Jill and I are talking about how to find mobile home lots with high profit potential. All week this week, we’re talking about mobile homes.

I thought this was Land Academy.

I know. It makes so much sense to add this to buying and selling land.

I explained it yesterday. They start popping up once in a while because they’re not marked correctly. It’s very easy to have them slip through the cracks with the assessor data, and they just don’t show up, kind of thing. You send out your land mailer, and here they come.

Understanding Mobile Home Lot Potential

Get into the topic here in a second. What this episode is about is buying properties that are conducive to installing a mobile home on it. It’s not every property or every municipality where this works. There’s a huge social stigma still associated with mobile homes, even though it’s the very definition of affordable housing. In fact, a couple of days ago, Jill and I, we had an opportunity, it was a whimsical scenario, to go through a mobile home plant. A manufacturing plant where they start with two-by-fours, and a house comes out at the other end.

It was really cool.

Just a fantastic opportunity. If you ever get the opportunity, wherever you live, to do that, it changes the way you look at real estate. I like modular homes and mobile homes.

I do, too.

Each day on the show, we answer a question from our Land Academy member Discord forum. Take a deep dive into land-related topics by popular requests.

Josh wrote, “Quick sanity check. If I’m trolling and finding areas with a good sold-to-currently-on-market ratio over the past twelve months, 6:1. The numbers are something like 40 sold and then seven active on the market. The Realtor.com days on market is between 50 and 70. Is that too little overall activity? Would that be considered a slow market? How would this impact mailer response rate, or is the latest quote of 5,000 to 6,000 mailers per deal for raw land still applicable? Finally, anyone got a crystal ball? Thanks in advance.”

The “Red, Yellow, Green” Market Test

This is a great question. Really intelligent question. The days on the red, green, yellow test is something I devised. If you’re new, a long time ago, to look at a zip code relative to other adjacent zip codes or zip codes in the immediate market and gauge them against one another. When you have a real low day on market in one zip code, but not so much in another zip code, that’s better. What Josh has identified here is something’s wrong, that’s reading between the lines of this question. The red, green, yellow test is a double-edged sword. Sometimes you run it. You’ll run five zip codes, and they’ll all be very similar, and they pass.

There’s as many sold properties this month as have been listed. That’s a 1:1 ratio. That makes sense. Going to mail it. What he’s saying here is something’s weird. I have six times more properties that have been sold in the last twelve months over ones that have been listed or ones that are on the market. That indicates to me something’s wrong. I don’t mean wrong with the market, I mean something strange with the data. This red, green, yellow test is a double-edged sword.

Not only are you getting confirmation that you should be mailing it, you’re just looking for weird stuff. It might be weird-good. It might be weird-bad. When you see something where there’s so many more properties that have been sold compared to properties that are active or listed, you need to find out why. The answer why to that question is whether or not you’re going to go spend thousands of dollars on mail and work the area. If this came up with something I was doing, North Carolina is famous for this exact scenario.

What is it? Is it a subdivision that somebody sold out, separate APNs, and there was a fire sale? Who knows why that happens? What you find out there might be great, might support what you’re trying to do. It might tell you, no way. This is just a strange thing that happened over the last twelve months, and everybody liquidated. Does that make sense?

Mm-hm. It’s your side of the sheet.

I don’t like this. I don’t like when there’s weird stuff.

I’m even wondering if he even got to the red, yellow, green test yet because he talks about trolling. I think he’s still at that point, before the red, yellow, green test.

That’s what’s going on.

I think that what he’s picking up on is good. I would even take it to the red, yellow, green test. That will tell you for sure.

Jill’s absolutely right. I misread this. If you’re on Zillow trolling around, looking for markets that might work, the next step after that is to support your theory. Support it with the actual data. We show you how to do that in great detail in the Land Academy program. You will get to the bottom of it that way. There could be all kinds of strange settings left over in Zillow. Ask me how I know this. Strange things left over in Zillow from the last 22 times that you’ve been looking at whatever you’re looking at. You haven’t reset all that stuff yet, making it screwing up your numbers.

That could be too. It could be a little operator error.

What I do, I always have the waterfront button.

You do?

I always look for waterfront property. A day will go by, and I’ll go back in there and say, there’s something wrong with the market. No, we’re just looking at waterfront property. Our topic, how to find mobile home lots with high profit potential. Philosophically, when you find something that has high profit potential to you, and I’ll describe something I found a couple of days ago, it’s usually rooted in the fact that nobody else knows about it or nobody else sees that potential.

Philosophically, when you find something with high profit potential, it's often rooted in the fact that nobody else knows about it or sees its potential. Share on X

The very definition of the French word entrepreneur means looking at stuff differently than everybody else. I found a property in an area where we buy and sell properties all the time. We know the market. We know the people. We know the real estate agents. We know what the county is going to say when we try to do stuff. I found a property on five acres, just the biggest pile-of-crap house there ever was. It’s on two and a half acres. I know what the zoning is there. I know what’s possible with that particular zoning. It would be very possible for us to buy this underpriced, on-the-MLS, pile-of-crap property on two and a half acres.

Jill and I can go in and split it and make it an acre and a half each, or an acre and a quarter each. The county allows mobile homes to be installed on that. I can tap in on the second new lot once it’s split, install a mobile home, not have to put water, sewer, or anything else in there, just tap into the existing stuff. This $50,000 or $80,000 acquisition is $40,000 because I have to split it among two lots. I know a mobile home is going to cost $130,000 to $140,000 to install at the end because utilities are there. I’ve got a $600,000 asset, potential south-side asset, where I’m going to pay about $80,000 for it.

Back at that, where would you recommend someone started this? Start with the county and just start researching what’s possible. Would you start researching pretty new mobile homes in this area that are selling, seeing what other people are doing, and then digging in?

Finding Profitable Mobile Home Lots

That’s it. Step one is exactly what Jill said. Horserun on the Internet, on Realtor.com or Zillow, Zillow is easier to work through. Find sellers, whether they’re active or sold, who have sold or active properties that are brand-new mobile homes and how much they’re selling for. That’s our very first indication that you will know very quickly if it’s possible in that area.

Start in Texas, and you will see people aren’t in the business to lose money. If somebody’s up buying property land and putting mobile homes on it and reselling it pretty regularly, or that’s an area where it’s possible to the municipality signing off on it. If they even care, in some places in Texas, they don’t care at all. If there’s, more importantly, a sell-side market for it. There are some places so rural that it doesn’t matter how cheap the property is or brand new. No one wants to live there.

What’s the pricing breakpoint? Not breakpoint as far as selling, it does need to be selling. If it’s going to cost buying the land, and maybe you do put in the utilities, let’s just even go there, because sometimes that’s needed, and you drop a mobile on it. What’s the sweet spot? If it’s above $300,000 as a target sale price, you’re making enough money. It’s worth your while, but you can’t do this if you’re going to spend more on the mobile than it’s all going to go for at the end kind of thing. I can buy your new one for $150,000 over $130,000. I can buy this one that’s ten years old right next door. You’re not going to make that much money.

What Jill’s really saying is, you have to start from the end. If you’re on Zillow and you’re seeing properties that are just real low days on market and they’re selling for $400,000 and they’re brand new or even used, you know that that market commands or supports a $400,000 sale price. I can work with that, and then I work backwards from there.

It’s going to cost $150,000. All the installation and the utilities, whether you’re going to hook them up or create the utilities yourself, costs X amount in that area. It starts to become an exercise, and fantastic, I know I can sell for $400,000. How do I manage my expenses so that my expenses in the project, for us anyway, total $300,000, and land is in there? You have to back into it. That is the answer to how to find mobile home lots with high profit potential. It’s by looking at what other people are doing in the area.

The answer to finding mobile home lots with high profit potential is by looking at what others are doing in the area. Share on X

More people are buying.

In it for decades, you’re going to just be able to smell it. You’re going to say, no one’s doing this here at all. This is what Jill and I do. We’ve just been doing it for so long. We can tell other houses are selling. If houses are selling for $600,000 or $700,000,  No one is building or developing mobile homes anywhere. The county says, we would love for you to do that, which is harder to find than it sounds. Jill’s New Year resolution at work here.

I don’t want to make this sound easy because it’s not, but if you put the time in, work the steps, it’s crazy profitable. Join us again where we’re going to talk about pricing mobile home lots for maximum returns. You are not alone in your real estate ambition. We are Jack and Jill, information, and inspiration to buy undervalued property.