Mobile Homes, whether the home itself or a mobile home with land, can make sense for a self-directed IRA investment.
In many parts of the country mobile homes may be the only affordable option for a person or family to occupy. Many investors utilize mobile homes as part of their investment strategy because of the low acquisition cost and the potential for an infinite return on their investment. Let me give you an example about one of our clients at IRA Innovations and what he has done with mobile home investing.
Mobile Home Investing Example
Sam’s ROTH IRA bought a mobile home from an estate sale for $1800.00. An additional $700.00 was put into fix up costs.
Sam’s IRA then sold the mobile home to a borrower with $700.00 down and $350.00 per month for 5 years.
At $350.00 per month, the original investment was returned to Sam’s IRA in less than 6 months. That means Sam’s IRA received a $350.00 per month profit for 4 ½ years, all tax-free as he had a ROTH IRA. His IRA Investment was $2500.00 and his income at $350.00 for 5 years was $21,000. As you can see, his return was infinite.
Investing Options for Mobile Homes With Land or Lot Rental
There are many ways to use mobile homes as an investment for your self-directed IRA. The above example was the acquisition of the mobile home itself. This home sat in a park where, in this case, the borrower paid the lot fees.
Some investors prefer a mobile home on land to sell as a package. Since it is not in a park, the wheels of the home are removed and the home is settled on the land. In this case, the county sends a tax bill and treats the investment as real estate. Mobile Homes that sit in parks are considered personal property, not real estate.
It is up to the investor to decide which strategy makes more sense for his IRA. Either way, with the right facilitation, the IRA can acquire a mobile home and rent it out or resell it out of the IRA. Investors can also buy the paper or notes on mobile homes in their IRAs. Our clients have been very successful utilizing this investment with their self-directed IRAs. I hope this will give you an idea about the creative investment strategies available with a self-directed IRA. Please feel free to contact us at [email protected] with any questions you have regarding this type of investment for the self-directed IRA.
As always, we never give investment advice. We simply assist you in the administration and recordkeeping on behalf of your IRA. It is up to you to do your due diligence on every investment. I have enjoyed sharing stories of our clients’ successes and hope they will help some of you accumulate wealth with investments that make sense for your self-directed IRA.