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My first mobile home park deal was with only 2.5% down. That’s right, not 25% but 2.5%. I bought Glenhaven Mobile Home Park for $400,000 and put only $10,000 down on it, with the seller carrying the balance. My second mobile home park was only 8% down. Then I had two deals at 20% down, followed by one at 0% down. So how was I able to do so many deals with low down payments? The answer is that I was buying mobile home parks. If you are looking for low down payment deals, then mobile home parks are the best shot you’ve got.

Mom & Pop sellers own them free and clear and set their own rules

The reason that banks can’t go with low down payments is because banks have rules and regulations and they simply won’t go less than 20% down. If they did, the FDIC would write them up. The only way to get less than 20% is with seller financing, and seller financing requires moms and pops that own their properties free and clear. With mobile home parks the #1 remaining real estate asset class that is majority owned by moms and pops, this is the only ticket in town for low down payments.

The power of bonding

Moms and pops will often “bond” with the buyer, and want to give them a low down payment simply because they like helping people. Many older moms & pops are not money motivated – they want to get enjoyment in other ways than dollars and cents. If they can help people who remind them of themselves when they were younger, or remind them of their son and daughter, then they get much more enjoyment from that than with a higher amount of down payment.

A shortage of buyers

Another feature of mobile home parks is that there are simply not enough buyers. If you look on Mobilehomeparkstore.com, you’ll notice that there are roughly 1,000 to 2,000 listings on that site every day of the week. Where are the buyers? Scared off by the stigma of trailer parks, mostly. Like any other form of real estate, supply and demand is vital, and with a lower supply of buyers, you can get better terms than if the parks were hotly pursued.

Why not? It’s safer for Mom & Pop than what the stock broker has to offer

CDs are paying around 1% right now. If the seller carries the paper, then they can earn 5% right now. That’s five times more money. On top of that, the mom and pop have owned and operated the mobile home park for decades, so they really have nothing to fear if you default. To them, it’s pretty much a win/win, even if they go with a 0% down deal.

Conclusion

If you really want to get into real estate with a small amount of down payment, then your best shot, without question, is to buy a mobile home park. With mobile home parks, 0%, 5%, 10%, 15% down is commonplace. For sheer leverage and ease of borrowing, you can’t beat moms, pops and mobile home parks. And don’t forget that there’s also no credit check on such transactions. There’s nothing easier than buying a mobile home park where the seller carries the paper.