Mobile Home Rentals in Bay Area

[Justin Oda]

I was reading a post from about 5 years ago about investing into MH, so it made me wonder about my situation. I’m looking to buy my first investment, but I live in the Bay Area. So I have been looking else where like Arizona. BUT, I was just looking through Zillow, and just started doing the math on a MH. It’s cheap at 75K so my mortgage would only be around 300-400 + lot fees. But studios/one BR apt go for 1600-1800 lowest around here, is this deal too good to not take or is there something I’m missing here? 

[Brenden Mitchum]

Hey @Justin Oda, welcome to the BP community!

Here are a few things to think about:

1. Who is providing the mortgage currently and is it assumable? Banks won't lend on MHs so unless the park, a dealer, or some other third party is providing the mortgage or the current one is assumable, you won't be financing it. 

2. What is the park's lot rent? Many lot rents in that area are astronomical, and, like an HOA, the park owner can raise it (within CA rent restrictions laws). Also, some parks do not allow you to rent out the home so check this too.

3. Don't expect to get the same rent you would get from a non-MH rental. You'll need to do some research on that park to see what other people are paying for rent. You can also go to nearby parks that have park-owned homes and ask how much they charge for rent. Make sure you also ask what their lot rent is so you can have a better idea of what the home rent is. 

There are plenty of other things to consider here like how much it will cost in turnover every time a tenant moves out and leaves your place trashed. This often wipes out any cash-flow unless you are doing some kind of rent to own program. You'll need to be careful with this though too as it could be in breach of the Dodd-Frank Act. Check out John Federo's website for more info on MH investing.

Please, feel free to reach out any time if you have questions or just want to chat!