Double-wide durability

[Tanner Glenn]

I live in an area where there are a lot of double-wide trailers on their own land. Monthly rental income from DWs are close to similar sized duplexes and town homes. I've got an opportunity to purchase a 1995 DW on just under 2 acres of land:

Asking price $19,900

Monthly rents $600-650

Rehab costs $15,000-20,000

I like the numbers, but I'm concerned that putting that kind of rehab money into a DW will be hard to justify if it needs another major rehab in 5-10 years. Has anybody done a similar rehab to rent and hold deal on a DW?

This will be my first deal. I don't have a ton of capital to work with and I'm wondering if it would be better to hold off until a similar DW becomes available that is either newer or just in better condition. I'm open to any suggestions/strategies.

[Curt Smith]

We've moved from stick built rentals in top high schools to this deal type exclusively now.  6-10/year added to inventory.

The rehab will be cheaper than 15k.  Only way you can (should) spend that much is:

- roof $4k

- heat pump hvac $4k

- paint $1.5k - 2k

- flooring $2k

- appliances - $1.6k

- fix up cabinents cuz it's an old house.  $500 ??

- fix baths, maybe new toilets fix the valving in shower, sinks $500

- Fix / paint decks  $500

Just mow the lawn, cut down any errant bushes.  Don't spend any money in the yard.  This isn't a 300k house.

That's it.  Most of our deals are half of the above.

We don't rent!!!!!  We rent to own for 12 months getting $1k to $2k option money to move in, to get into long term capital gains and installment sale tax treatment, then we seller finance into a note and keep the note.  We take another $1k to $2k at closing for the balance of the down payment.  15 years of maintenance free cash flow is great.   We'd never sell the note.  Being Dodd Frank is not a problem.  PM me or look for my many other posts re how to be compliant.  3 per year per person.

We cap rate 25% to 30% sometimes more than 30% on this deal. We only buy 2000 or newer. Once in a while a 98 or 99. To keep rehab costs down. Some double wides bought off HUD or auction.com we just use a spray bottle of cleaner and a vacume and new appliances. Those cap rate over 30%. Some need some amount of the above punch list for rehab.

Advertising for rent to own, seller will finance is a dream.  Wonderful people wanting to get back to a stable life in their own home will apply.  You will be a component in the circle of life facilitating good families getting a head via your seller financing and fixed up decent home.  You'll get passive cash flow for alot longer than you'd last if you tried to run a rental business in these things.  They are best occupied by the owner mentality!!