Real Estate Investing School Podcast

Episode 135: Masterclass—Manufactured Homes with Jason Velie

Date: February 26, 2024

Host: Joe Jensen
Guest: Jason Velie

Episode Overview

This masterclass features Jason Velie, who pivoted from a finance career to a full-time real estate investor, building a 59-unit portfolio (44 weighted ownership) and flipping over 30 homes in four years—many in the often-overlooked manufactured home sector. Jason shares his journey from zero capital to a $3.5M equity position and $10K+ monthly cash flow, revealing actionable insights on flipping manufactured homes, unique financing challenges, title and age nuances, plumbing issues, and market strategies. Joe and Jason demystify the manufactured, modular, and mobile home landscape, offering a crash course for newcomers and seasoned investors alike.

Key Topics and Insights

1. Jason's Origin Story: From Finance to Real Estate

• Jason started investing in late 2019 with "virtually no money to his name" ([01:43]).
• Inspired by podcasts, he learned about using hard and private money lenders.
• First flip: "I had no money... did a cash advance through my credit card… bought the materials on credit, paid the contractor when the lender released the funds… my net on that first flip, which was a double wide manufactured home... was a little over $26,000." ([03:36]).
• Growth was "really slow" at first; exponential deal flow came after the fourth deal ([04:44]).

2. Compounding Knowledge, Credibility, and Networking

• "Everything you know, your knowledge base compounds over time. It's like the concept of compounded interest... your credibility is the same way." ([07:11])
• "Let your network know what you're doing. Make the Facebook post... Because I also now get word of mouth deals." ([07:32])
• Your reputation and track record in a local market become a deal magnet: "Most wholesalers bring their deals to me first... especially manufactured homes, since other buyers aren't interested." ([07:00])

Quote:
"Compounding effectiveness, compounding credibility... if you have somebody in your network that you can see as legit—boom, that's been so much more than somebody on Facebook." – Joe ([08:03])

3. Manufactured Homes: Masterclass in Financeability

What makes a manufactured home financeable for a buyer?

• Own the Land: Must include the land—not in a park or leased land ([10:01]).
• Permanent Foundation: “Tongue and axles removed... sitting on cinder block piers with metal tie-down straps” ([10:28]).
• Skirting: Skirting isn’t structural; vinyl is sufficient. "So many investors and even realtors think vinyl skirting disqualifies for financing—it's not true." ([12:02])
• Single vs. Double Wide: Both can be financed if requirements are met ([13:01]).
• Affidavit of Affixation: Title with DMV must be canceled; home is legally “affixed to real property.” If prior owner failed, it's usually fixable unless documentation is missing ([13:25]).
• Data Plate and HUD Label: Data plate (inside a cabinet or closet) is key; HUD label on exterior or VIN on frame can substitute ([14:21]).
• Year Built: Must be 1976 or newer (HUD regulation began in ’76). "Most lenders won't finance over 20 years old, but break that rule all the time—1990 or newer is usually safe” ([17:25]).
• Moved Homes: Has to be on its original site—if moved, no FHA/USDA/Conventional; VA can finance if it's only moved once ([18:06]).
• Plumbing: Late ’80s–early ’90s homes likely have "polybutylene (gray) plumbing," known to fail. Re-plumbing runs $3–6K, so budget accordingly ([22:02]).

TIP:
"If it's gray, it can't stay." – Jason, on polybutylene plumbing ([24:30])

Pros & Cons of Flipping Manufactured Homes

Advantages:

• Lower price/entry risk.
• Less competition, especially for those who understand title and finance nuances ([25:10]).
• Easier, cheaper repairs (easy access to crawl spaces).
• Significant opportunity: "Most investors don’t know these homes can be financed—they think you have to sell for cash, so there's an arbitrage if you understand the process." ([27:56])

Cons:

• Many hurdles: title, age, moving history, skirting, foundation, plumbing.
• Learning curve: "If you don't know the nuances, you can get burned." ([27:00])

4. Manufactured vs. Modular vs. Stick-Built: Know the Difference

• Mobile/Manufactured: Built off-site, often on steel I-beam frame; can be single or double wide. When set and titled as real property, often called "manufactured."
• Modular: Built in sections, assembled on-site but NOT on a steel chassis; treated/appraised like stick-built once affixed. "Modulars are now viewed as equivalent quality construction... can use stick-built comps." ([33:35])
• Barndominiums, Container & Tiny Homes:
  • Barndominiums can be modular or stick-built; not a loan hurdle if built to code.
  • Shipping container/tiny homes generally not financeable under traditional/HUD-backed loans ([41:29]).
• On Modularity:
  • "I live in a modular home that is two stories and 3,400 square feet... from the road, you'd never know it's a modular." ([39:02])

5. Lending & Financing Tactics

• Many lenders (hard/private money) initially say "no" to manufactured homes—don't give up, call more: "The best lender is the next lender." ([36:17])
• For rural properties: USDA loans create additional traditional financing options, not fewer; can be beneficial ([37:53]).

Quote:
"Don't ever limit yourself or think that you don't have options, because they're out there." – Jason ([36:17])

6. Jason’s Portfolio: Weighted Ownership and Transparency

• Weighted ownership means only counting one’s share of each unit: “By ownership percentage, I only own 45 of those 60 doors. I’m a huge advocate for transparency.” ([48:25])
• Joint ventures vs. syndications: "Two complexes, no partners; two with partial partners." ([51:13])
• On ‘door-count’ posturing in the investing world:

  "If you want to say, 'I have 1200 doors under management, that's fine.' But be transparent. It does a disservice to everybody when people try to fluff things." – Joe ([52:24])

Notable Quotes & Memorable Moments

• “If you’re one of the folks that goes to these meetups and you’re actually doing deals… you instantly become more credible.” ([05:34])
• “It all compounds and gets easier over time.” ([07:38])
• “If it’s gray, it can’t stay!” — Jason, on replacing gray polybutylene plumbing ([24:30])
• "I'm going to save the copy of this video as a resource... because I've had other podcasts where I've been able to get into some of this, but not quite to that level." ([27:56])
• "Most real estate investors—even those doing it for decades—don't know that [manufactured homes] can qualify for regular financing." ([27:56])
• "Barndominiums—aren't those just like a style of build?" ([42:54])
• “I form my business and growth slowly and progressively at a pace that’s fun and manageable for me... so I never have to work evenings or weekends.” ([56:10])
• "Outside of the Bible, 'The Go Giver' by Bob Burg... the more you help people and the more you give, the more just naturally comes back to you." ([58:28])
• "I was an idiot and hired the cheapest, flat-rate home inspector... he missed everything..." (Jason’s most expensive mistake, [59:55])
• “Real estate can be so forgiving in so many ways, because so many things went wrong, but you didn't lose your shirt…” ([62:07])
• “The more you give, the more just naturally comes back to you without having to try. And that's been so incredibly true.” ([59:09])
• "My calling is to be successful in business so that I can be radically generous." ([65:05])

Timestamps for Key Segments

• 01:43 – Jason’s first flip: no money, credit card strategy, proof of concept
• 04:44 – Slow growth to exponential deal flow: compounding credibility/knowledge
• 09:53 – Masterclass: What makes a manufactured home financeable?
• 17:25 – Age restrictions and the “moved homes” rule
• 22:02 – Polybutylene plumbing: what to look for and cost to repair
• 25:10 – Pros & cons of flipping manufactured homes
• 31:09 – Manufactured vs. modular vs. mobile vs. stick-built explained
• 36:17 – Lending tactics/financing manufactured homes
• 37:53 – USDA loans for rural manufactured homes
• 48:25 – Weighted ownership explained (transparency in door count)
• 59:55 – Jason’s most expensive mistake (the $16k contractor, inspection fail)
• 65:05 – Purpose of life: success, business, and radical generosity

Closing: Resources & How to Connect

• Follow Jason on Instagram
• Interested in partnering or lending?
  JVwithJV.com ("Joint Venture with Jason") ([54:47])

Takeaways:

• Manufactured homes are a high-opportunity, low-competition niche if you understand the legal and finance nuances.
• Knowing the difference between “mobile,” “manufactured,” and “modular” opens up value—especially as modular homes now comp with stick-built.
• Real estate investing is as much about relationships, reputation, and education as capital.
• Radical transparency, resilience through mistakes, and a focus on helpfulness (the “Go Giver” mindset) compound your investment career as much as your financial returns.
• Jason’s advice: If you’re considering investing in manufactured homes, learn which details matter (title, foundation, plumbing, age, moving history)—then seize the opportunity others overlook.