How It Works

For those who sell mobile homes in California, a lot goes into figuring out offers, which we can always explain when viewing your mobile home or when we make the offer. Also, we dedicated an article on calculating ARV, too. Cash offers will be lower than what you would receive if you were to wait around months waiting to get market value for your home. We help market those homes, as well, but we will not be able to offer $50k for a $25k mobile home if you want to sell quickly. We speak with a lot of people who have unrealistic expectations, which is why we do our best to educate people on the dynamics and economics of selling a mobile home, so they can come to the best decision for their family.

 

Also, while we do our best to make fair offers, you can always negotiate.  Its not uncommon for people to have an attachment to their home and there is nothing wrong with wanting more, which is why we have other options.  If you have a pristine house and you are looking to get top dollar for it we have no problem actively marketing your mobile home for the best price but even this can take months depending on lot rent, location, and the type of park you live in. However, if your home isn’t pristine, we can’t offer a high cash offer because there are a lot of things we have to consider on our end. Aside from market conditions we consider what is known in the real estate world as ARV.

​

What is After Repair Market Value or ARV? This simply means we look at what the value of your mobile home would be, completely fixed up. This is just one of the steps we take on our end to formulate your offer!

​

What Do We Do Now?

​

We know that if we make similar upgrades to your house (AFTER we buy it, of course), having it updated, we would also be able to sell it for $50K.

​

So after the home has been renovated, we will have a better idea of the value (in this case $50K), and we know the cost of repairs/upgrades. We can now make an offer that makes sense based on the research and comps in the area.  Hopefully, it works for you too and we can move forward in arranging a closing! We always do our calculations because it protects both of our interests. SEND US SOME BASIC DETAILS ABOUT YOUR MOBILE HOME TO GET STARTED!

​

Calculating the Offer:

​

Who loves math?  If so, you’ll love this!  For transparency, this is our actual formula for calculating offers.

​

[Offer] = [After Repair Value] – [Repair Cost] – [Selling Cost] – [Profit Margin]

​

And here is a breakdown of all the terms above.

​

After Repair Value (ARV): This is what your home will potentially be worth after it is complete and looks like your favorite HGTV flipping show.

​

Repair Cost: This is what our cost will be fixing/updating the house AFTER we purchase it from you.

​

Selling Costs: If you want to sell mobile homes in California, we buy your home with our money but we may also have to pay to market and sell your home, too.  Some of our costs include paying agent fees, closing costs, taxes, holding costs, etc. All fees you do NOT have to pay when you sell your house directly to us ;). This is usually 10% all together with the selling price. (Our Selling Cost = 10% x ARV)

​

Profit Margin: Ummm.. this is a business after all, right?  We have to make money because we have bills and employees.  We wouldn’t be able to stay in business, buy more houses, pay contractors, plumbers, etc if we didn’t make some sort of profit. However, we look to serve as many as possible, and doing that doesn’t mean charging an arm and a leg.

​

English Please!!

​

So what does this mean? Think of it like this:

​

The market value of the house (after rehab), minus ALL our costs to fix it up (including our profits), will be the offer. Get it?  Congrats, now you are an expert at this,  but if you need to see it all together, let’s use that formula for a real-life example…

​

Here we go:

​

 ‘As-Is’ Value = $40K

​

ARV (After Repair Value) = $60K

​

Repairs = $15K

​

Selling Cost = 10% x $60K = $6K

​

Let’s say Our Profit Margin For This Purchase = $7K

​

Let make it easier:

[Your Offer] =  [ARV] – [Repairs] – [Selling Costs] – [Profit]

​

Offer = $60K – $15K – $6K – $7K = $32K

​

Offer = $32K

​

It’s all just math and numbers.  This is how we do 80% of our cash offers. We simply add the numbers up trying our best to give you the highest possible offer we can make you, to make sure you will be happy.  Sometimes a cash buyer does not make sense, that’s okay!  We have other ways of helping and we are a licensed dealer.

​

Analyzing the Offer

​

So, the house is worth $40K as is,  meaning if you listed it with an agent you could sell it for $40K. Yet after ~8% agent fees and closing costs you would probably get about $37.5K for it after it will be on the market for 4? 5? months! And no one can guarantee the house will actually sell, which means you will be paying lot rent for the foreseeable future.

So now you have to make a decision.

​

Sell it for a guaranteed sale for $32K in as little as 10-20 days, or a “maybe sale” and receive $37.5K hopefully within 4 to 5 months.

~Decisions, decisions…