What does a "rentable mobile home look like"?

Question

I'm new to this wing of investing. We are currently evaluating a park with 4 vacant park-owned-homes. They are in pretty rough shape inside, but definitely aren't bad enough off that we would scrap them. They need new carpet, a solid clean out, and some of the floors have some water damage which would need to be repaired (along with the spots in the roof that caused the leaking). Cabinets are in place, and overall the fixtures are not terrible (maybe have to replace some door handles and things of that nature). I know this is an incredibly tough question without seeing the homes, but what's the average cost to bring a mobile home in bad shape in the inside up to "rentable condition"? I know what I would and would not live in, but I'm not a mobile home tenant. Exterior of these homes is fine (skirting is one and they all have decks). General numbers on how much you would spend to rehab a home would also be helpful. Thanks much.

Curt Smith · Answer

Not saying the $2500 is low or not achievable.  But problem subflooring is a time eater.  Rolling the roof fixing + glue is easy enough.  Not done it myself but the local MHP supply store will have the material and talk you through it.

I'll guess 800 sqft since you didn't say.  The hot tactic is to NOT do carpet, but wood grain vinyl through out.  Use the new thick stuff.  about 1/8" think.  Stronger and hides floor mis match.  Lasts longer than carpet.

Paint labor is $1/sq ft of floor space s0 $800 labor for paint + paint another $100.   Flooring for vinyle is $13sq yd installed.  13 x 800 / 9 = $1155.  Fix the roof and subfloor I think you'll be closer to $4k +/-  this is minimum.  you didn't mention heat or AC.  Lots of MHs are "you bring it"  tenant brings AC, space heaters and their own appliances.  If you add any of these then add this on too.  But beware they useually get stollen on turn over.  Used appliances at best.

Harold Anderson · Answer

@Mark Brown

I'd like to know how to do a good job with rehab on these with only $2500.  It may be possible but I've spent many times that to do a good job and can't see how it could have been done cheaper.  Leaking windows, doors, A/C units, etc can create havoc that's not always visible during inspection.  Small things like aluminum wiring, pests nesting in insulation, rotting boards where you don't expect them, etc can really add up in time and money.

I've got a bad habit of looking at a place and seeing how "easy" it would be to do.  Then I spend way too much time and money on the project because I want it "done right".

On the other hand, I spent 25K to renovate a double wide and am getting $1150 in rent.  I doubt I would have gotten that with just a $2500 reno.

Orlando Paz · Answer

@Mark Brown - I’m no pro by any means, but the first priority would be to make it habitable. I realize this is common sense and it sounds funny to point out. The mechanicals (HVAC, Electrical, and Plumbing), should be in good working order. You should check for black mold. Especially, if there is any water damage. With that being said, make sure that all leaks are resolved. Check for soft spots on the floor and walls. Check the floor by exterior doors, windows, and behind the refrigerator. Check the whole bathroom. Make sure there are no holes or damage that exposes the interior to the elements. Once these basic items are taken care of, then you can determine how you will make the place attractive. As with “stick built” homes (and if budget allows), focus on making the kitchen and bathroom areas attractive. Paint and add new flooring if needed. You are looking to rent, so make sure to keep a mindset of making purchases that are of reasonable quality, somewhat attractive, and an overall good value. If there are any pests, get that taken care of. From beginning to end, you should ask yourself if this would be a place that you would consider safe and comfortable for yourself and your loved ones. Check out forum posts, and look for frugal ways to get the job done. Now that I’ve put some detail into my advice, I need to get a mobile home and put my money where my mouth is! Lol!... Good luck!

Michael Meeks · Answer

I'm not that far from you, so cost should be comparable. I have flipped (3) using lease purchases. I typically sink $5000 to $7500 into similar renovations. I do include a/c when necessary, but liability is theirs, if there are any issues since they are ultimately purchasing. I am purchasing for $5000 to $9000, and selling the homes from $26,000 to $38,000, (plus finance charges) and that is still cheaper than they will typically get from a dealer on a used home. My father works for a dealer, and they struggle getting customers financed. Buyers are plentiful. My homes are all 3/2 in parks with great school districts.

Mark Brown · Answer

Thanks for all the advice guys. Seems like there is plenty to do... If we end up doing this deal, I'm going to deduct some of these reno costs from my offer for sure. I looked online yesterday at what a $10K used mobile home looked like and most of these were in considerably better shape than any of the vacant ones I'm buying. I like the idea of doing the vinyl floors instead of carpet. I don't think any of these homes had AC or heat (definitely not central), so that's another aspect I'd have to contemplate. Do you guys furnish window units in your Mobile Homes?

Josh McCullough · Answer

Sounds like maybe a $2,500 rehab. Nothin to it but to do it!

Jassem A. · Answer

Shouldn't cost that much. Really depends how much the contractor you hire decides to charge you and what other problems each home might have.

What does a "rentable mobile home look like"?

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