Help - want to buy old mobile home or do I?

Question

There is a mobile home that I am going to look at and have know clue as to how to buy or what to look for. would like to rent it out. it is old - so I will need to replace the furance paint carpet ect. Any thoughts ?

Shawn Pennington · Answer

Check out BP Podcast Ep# 75....all about Mobile Home Investing...its a great listen!

Steve Vaughan · Answer

Oh of course, @Harold Anderson . There is a huge difference between a nice doublewide on land and an old beat up tube in a park. Parks are different to, of course. In the 2 parks I have dealt with, the clientele was sketchy at best. Different that the land is causing more repair headaches than the home. Trees and acreage will do that. Thanks for the clarification and congrats on what seems like a great rental!

Harold Anderson · Answer

@Deborah Walleman Is this MH in a park? I'm working on one in a park. In our area, I haven't found one park that allows rentals. My exit strategy is to offer seller financing. I don't think I'll ever purchase an older MH again. The amount of work to do is far greater than it appeared when I first looked at it. And the cost for the repairs is much higher. I'm doing all my own work. I thought I could finish it in less than a month.I'm glad I took on this project, though, because I'm learning a lot. The first problem I found was leaks, both roof and plumbing. These caused damage that couldn't be seen in my inspection of the MH. They have caused hours of work to track down and repair and, now, 3 months after buying the place, I'm still working on that. The second unseen problem I discovered was the home was wired with solid aluminum which was allowed during the Vietnam war when copper was hard to come by. To do anything to the wiring in the MH requires using expensive connectors and is time consuming. My point is that, to put some older homes back into livable shape, can take much more time and money than you might expect. If you can rent the home or, better yet, if it's on land, I'd be more willing to put time and money into it because it will pay back over the long haul.As to the furnace, I'd have someone look at it before just replacing it. I had mine refurbished for far less than it would cost to replace. The water heater, on the other hand is far better to replace if you see any rust or if it's very old.Establishing good relationships with people who can help you is also helpful. While I can't put the money into full time help, I've got someone who I can call on when I need a hand. I've established sources of used but good quality supplies in my area. Habitat Restore is my favorite. A good source is a rehab contractor who renovates condos and high end apartments. I wish you the best and hope you enjoy it if you get it.Harold

Mark Gruetzmacher · Answer

@Deborah Walleman What Kyle Penland says used to work out real good but since the new Dodd Frank and the Safe Act laws past in the recent years, the seller financing has pretty much gone by the way side. People still do it but if you do just make sure you understand the laws you have to comply with or understand the consequences if caught. If you have not heard of it you can search here on BP. There are tons of posts about it. Just wanted to mention that, the more info the better I think people are off in the long run.

Deborah Walleman · Answer

Thank you everybody that commented on this I learned alot. The mobile home sold before I could get there.

Monte Blackwell · Answer

I agree with Mark in buying too old. I would offer, nothing older than 1990. Novadek flooring started replacing particle wood and plywood flooring which made for a superior flooring system. Some manufacturers started to build the walls with 16in on center just like site built homes which also made for better structure. Also a wind zone 2 is much better fortified than a wind zone 1 and that's always nice to know. Another thing that Mark mentioned which is probably most important, MAKE SURE you know whether or not you local M.H. parks will allow you to rent out the M.H., with you not occupying it. Most if not all parks these days will not allow it anymore. That could put you in a real bind if you have nowhere to put it and you don't find this out until after you invested your money. Selling it to someone who has property is great but you just cut your market down by about 75%. So be very careful with that.Having said all that, I have made out quite good with mobile homes in my past. Hope this Helps!

Harold Anderson · Answer

@Steve Vaughan I have a doublewide on land that I rent out for $1150. It's just prior to the 1976 magic date (July ?). We lived in it while renovating it. I put in $20K. I've updated it so well that I don't see much difference between it an a stick built at this time. Our tenants have been first class and pay on time. I certainly wouldn't be afraid to do it again. Yes, we have to work on it from time to time. but nothing that couldn't happen to a stick built as well. The land is actually taking more of our time than the MH, making sure that the land drains well. Trees fall down, a retaining wall failed, the .1 mile driveway has storm caused grooves in it.For my current one, I have the worst MH in the park. The park is excellant and neighbors are very friendly. I suspect that I won't have trouble finding good people to buy it. I've had neighbors suggest they might be interested and the guy I bought it from says he may be interested in moving back in when I'm done.As to Dodd-Frank, I've been told different things. An MLO told me that, if the home is in a park, it's personal property and DF doesn't apply. I'd err on the side of caution, though.Harold

Steve Vaughan · Answer

I wouldn't hold an old mobile as a rental. Too much work on the 'home' itself like @Harold Anderson and @Mark Gruetzmacher mention, plus extra landlord headaches with the clientele it attracts. If it's in a park, then no times 2. Gotta pay park rent if it's even allowed to have rentals in the park. Oh- and a lot of parks require that mobiles be moved out at the 30-yr age mark. I used to buy for cash and sell on paper. People, us included, tend to under-estimate repair and maintenance costs of these things so the condition wasn't a problem for the buyer if the terms are right for them. The title is the same as a car. Does Dodd-Frank apply to personal property? Thanks in advance!

Joshua Houchins · Answer

mobile homes are cash cows if you buy them right. Don't over spend your cash on cash return will be nice if you buy cheap a. Keep repair cost cheap. Also look into land that you could move it to that would have space for other units that you could by or rent the lots.

Mark Gruetzmacher · Answer

@Deborah Walleman There are a lot of different things to consider when buying a mobile home. What kind of age is it and what price range? Prices vary greatly from state to state and even from city to city sometimes. Prices in my area vary from maybe $1000 for a barely livable older unit in the 1970's range. But those same years fixed up sell for anywhere from $5K-15K. But on the same token I have gotten some mid 90's for 12K but they needed work as well. Again depending on the price and age you would need to decide if it is worth it or not. Go take a look at it and see what it is going to need and then make a decision. First make sure the owner has clear title to the mobile home. They are usually like car titles but you have to check with the county about the taxes. The older homes usually have the taxes a year in arrears so when you buy it the taxes have to be brought current which usually means all of last years taxes will be due plus the current years. That might vary with your state and county.Then I would check around your local area and see how it compares to others for sale as well. If you are buying something in a mobile home park you need to first check with the park to see if they allow people to rent them out. A lot of parks do not allow you to do that. See what the lot rent costs as well. If lot rent is $300 and you can rent it for $400, it might not be too great of a deal. Mobile homes in general all have more issues than houses it seems and more so with older mobile homes. If it is going to need a furnace you need to price one out, they are not too cheap. If it needs flooring throughout then that is anything expense as well. Check the floors for soft spots around the doors and windows. Those floors get weak very fast if water is allowed to soak into them. There is tons of things to consider when buying mobile homes for an investment. Just don't pay too much or buy too old. Me personally I would not buy before 1978 when the HUD codes came into play. I would rather have something in the late 80's at a bare minimum as well but everybody has a budget to go buy. Let us know what it looks like and the age and price point. Good Luck