Monday, January 22nd, 2018

 Trailer Cash

By Stu Silver/Zalman Velvel

How would you like to help Americans, both young and old, achieve their dream of home ownership, and make a great investment for yourself in the process? How would you like to earn returns, with little risk, of 18 – 72% on your IRA or your savings, to supplement your retirement years, or your regular monthly budget? And what if you could do this with $5,000 or less, or a million dollars or more, if you wanted? In this short article we’re going to show you an investment technique called BB, or Be the Bank, a prudent bank. It requires little time, yet produces large rewards.

In order to take advantage of this technique, you will need to understand there is a tremendous demand for affordable housing. Some of you will also need to free up some pre-conceived attitudes about manufactured homes, which are also the most affordable housing there is.

There are nine million manufactured homes in this country, one residence out of every ten, yet this investment is virtually hidden from most investors. It  is not even on their radar screen. About three million of them are located in communities where the residents own their home, but lease the land under it. Those are the ones we are interested in now because they have the lowest prices and the highest returns.

Whys is this investment so hidden? The root of it is a mistaken belief. Manufactured homes, because they are built in a factory like a car, also have a title just like a car. For this reason, people believe manufactured homes wear out just like a car. However, if someone takes care of their manufactured home the same way they take care of their site built house, it can last as long as a site built house – we personally own manufactured homes that are forty years old, or more, and are still providing safe, healthy, sturdy shelters for families.

Because of this mistaken belief, many banks refuse to lend on “older” manufactured homes, homes built before, say, 1990. And this is where the opportunities lie. This is where you will Be the Bank, and you will lend on older, but still in fine shape, manufactured homes. You can select the homes you want to lend on, in the communities you want to lend in, to the type of borrowers you want to lend to. There are over 50,000 manufactured home communities in the U.S., an average of 1,000 in every state, so there are many comfortable places for you to invest.

When it comes time to invest, it is a three step process:

1-You will purchase an older manufactured home, that is still in fine shape, for cash, at a discount of 50% or more from its retail value

2-You will sell the manufactured home to a new owner at its retail value, with financing like a bank, and you will hold the title to the home as collateral to ensure you get paid

3-You will collect monthly payments until the home is paid off

Now let’s discuss each step so you understand and feel comfortable with the process.

The first step is easy. You will find manufactured home communities, or parks, that you feel comfortable with, like the one on the left. You can find them by looking in the yellow pages, in the Classifieds under Manufactured Homes For Sale, or on the Internet on  websites like Manufactured Housing Global Network (, or In most communities, ten percent of the homes are for sale at any one time. That means in a community of, say, 100 homes, there should be around 10 for sale.

The next step is to inspect the manufactured homes for sale to find the best deal at the lowest price from a seller that wants to sell now for cash. The maximum you will pay will be 50% of the retail price. How will you know what the retail price is? The easiest way is to look up the home in the N.A.D.A. guide (or on their website.) You can also ask the community  manager for recent comparable sales as your gauge of value. You will make offers until you find a seller who is willing to give you the deal you want, at the price you want, in exchange for a quick, cash deal.

The next step is to find a new buyer, and there is such a strong demand for affordable housing with financing that you will typically have a buyer lined up before you close on the purchase. The simplest way to find buyers is a Classified ad that says: Manufactured Home For Sale, Owner Finance, No Banks Needed, and Your Phone Number. After your first BB, you should have a waiting list of qualified buyers for your next one.

When someone calls from the ad, you will qualify them as to their job, their income, their credit, and their family size and/or pets. You will explain the terms of the loan you are providing, concentrating on how much down and how much a month, because that’s a buyer’s primary concern. We try to make our down payments in multiples of $1,000, and our monthly payments in multiples of $100 per month.

The last step is the most fun – completing the sale of the manufactured home to the new buyer. The process is easy. You go down to the Department of Motor Vehicles after you receive the new buyer’s down payment and insurance policy, and you transfer ownership. You hold onto the DMV title as collateral – the home cannot be sold without paying you off beforehand.

Something unexpected might happen to you during the last step – you will find yourself falling in love with your mailbox, because it has been converted to an ATM machine. Each month it will have envelopes with checks made out to you. The more BB’s you do, the more checks you receive.

This is one of the easiest ways to make money in  real estate because you have none of the “heavy lifting.” You are buying homes that require little or no fix up (just a cleaning, at most), and you are collecting payments each month without any maintenance or repairs. You are the Bank, and the Bank only collects mortgage payments. The Bank does not come to someone’s house and unclog their toilets or fix the stove – that is the homeowner’s responsibility.

Let me give you an example of how this works.

Step One: You found Easy Days Manufactured Home Community, an over 55 retirement community that appealed to you. There were 10 homes for sale in the community, many like the one pictured on the left. One owner wanted a quick cash sale. You looked  up the home in the N.A.D.A. book and it was worth $15,000. The community manager confirmed other sales took place at that price. The  owner agreed to sell it to you for $7,500 for a quick cash sale. You wrote an agreement.

Step Two: You ran an ad and found a nice retired couple from Michigan who agreed to buy it for $15,000. They only had $2,000 to put down, and had no trouble making a payment of $300/ month on the mortgage, for 54 months. (The interest rate you charged on the mortgage was only 9.9%)

Step Three: You sold is to the Michigan couple and for the next 54 months you went out to your mailbox and collected a monthly check for $300, smiling each time.

When you take into account what you invested, $7,500 on the purchase, minus the $2,000 down payment you collected, your total initial investment was only $5,500. You then received 54 payments of $300, for a total of $16,200. You made a net profit of $16,200 minus $5,500, or $10,700. Dividing net profit by 54 to get a monthly profit, and then multiplying by 12, you get a yearly profit of $2,375, for a yearly simple return of 43%.

Yes, 43%. If you put your money in the bank at 4%, you would get $220 per year in interest, or 1/10 the amount of doing this BB. Put another way, the Being the Bank gave you 10 times the income of putting your money in a bank, and you had collateral of twice what you invested.

The number one objection we get when we explain the BB process is, “What happens if the new buyer defaults and does not pay off the note?” Our answer may surprise you. It is: “That’s even better.”

If the new buyer stops paying, we take back the home, or “repo” it. The repo process in most states is simple and fast, just like a car repo, but without the pain and confusion because a manufactured home is usually too expensive and too big for anyone to move and hide like a car. It almost always is sitting right where you sold it. You take the title down to the DMV, sign an affidavit that the new buyer did not make payments as agreed, and ownership is switched immediately back to your name.

Then you can sell it again for a second profit. We do not wish anyone misfortune, and we want everyone to pay off their notes, gain ownership of their home, and achieve the American Dream, but in the case the new owners can’t satisfy the note, we usually make even more money.

Throughout this article I have been using the term manufactured home, because it does not create an emotional reaction in some people like two other similar terms – mobile homes and trailers. When I use those terms,  what springs to mind in some people is an image of  Tobacco Road, another mistaken belief. The majority of mobile home or trailer parks, i.e. manufactured home communities, contain respectable peace-loving retirees or hard-working first time home buyers, many of whom have pride of ownership, and the way they care for their homes proves it.

We created a humorous slogan to this end that’s easy to remember:

It’s not trailer trash, it’s trailer cash.

If you want to learn more about manufactured homes, get the forms you need for BB’s, along with a more in depth look at investing, read “Mobile Home Wealth,” by Zalman Velvel (the pen name of Stu Silver). It’s available on along with his other books and training materials. , and at Barnes & Noble,, or other fine bookstores everywhere.

Stuart Silver is a real estate investor, writer, speaker and trainer who speaks on the lucrative but often overlooked subject of Mobil Home and Mobile Home Park investment.  He is a dynamic and humorous speaker who delivers a wealth of information in his fact-filled 1-hour PowerPoint presentation.   Mr. Silver’s real estate holdings include 600 rental units, 12 mobile home parks, warehouses, mini-warehouses, offices, duplexes, and motels.  Writing under the pen-name of Zalman Velvel, he has published two well-received books: Mobile Home Wealth and Mobile Home Wealth Part 2: Mobile Home Parks.

Mr. Silver has been a full time investor for more than 28 years.  He holds the coveted CCIM designation, and is licensed as a real estate broker, mortgage broker, auctioneer, mobile home dealer, and former real estate appraiser. As a licensed real estate trainer, Mr. Silver has trained more than 5,000 people in real estate investing, in live 3-day bootcamps and live on the internet.