Welcome back to the Mobile Home Expert! Today we’ll be discussing the value of pursuing lonnie deals. This refers to people buying mobile homes inside of a park, putting about $5,000 into them, and then putting a tenant into them for around 1200 a month. That’s 14,000 in revenue a year, and in year one, you’ve already made 40% on your money. You just keep doing that year after year.
The concern here though lies in the uncertainty of the tenant’s actions. The above model presupposes that they’ll actually stay in the unit long term. Also, you’re banking on them being a quality tenant, meaning that they’ll honor their rent each month. Still, it’s not a bad business model if you’re looking at between $5,000 to $10,000 to invest at the onset.
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And the returns don’t have to stop there. Let’s say, for example, that you successfully get that first tenant in. After a year, you’ll be in a good enough position to grab another home on the lot. Take another $5,000 from your returns, and spruce it up for the next MHP tenant.
Once someone’s in there, you’re not doubling that initial return in the second year. From there, you can buy another 4 homes in year three, and repeat the process. Before you know it, you can have 10 homes across multiple parks that are both very cost affordable, and cash flow very well. There are several people that elect to pursue lonnie deals. In short, it’s a proven model if you don’t mind the leg work.
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