Buying a manufactured home in Sacramento

Buying a manufactured home in Sacramento

Sacramento, CA · Member since 2014 · 73 posts · 16 votes

On Thursday I was surfing craigslist looking for some deals as I do from time to time. A part of the inspiration behind this was trying to solve a problem which was my mother needing a place to live. So I come across this ad for a mobile home in a C class neighborhood right off the i80 freeway in Sacramento for sale for $9,000, it was a 2 bed room 1 bath. I text the seller and I start inquiring about the home. I ask a number of questions like what is space rent, what are other expenses like garbage, water, and electricity. I ask if there was any property taxes. They say there are no other expenses but space rent which was $675 a month, which I felt was sort of high but I went and looked at the home anyways.  I saw the home it needed some TLC but overall it had washer/dryer unit, refrigerator, stove. There was a language barrier because I did not speak Spanish. (I found out the person I was texting was actually the seller's brother doing translations.) So when we look at the home the actual seller wants to get out quickly by the beginning of June. She says she would take $7,000. She shows me the title, it is not in her name.  I told her we would get back to her.

I figured all of this was going to be a learning experience. I am eager to make my second deal and be creative about it. So I figured I would work through all the little things like getting the money and the title situation worked out.  I was a little emotional about the situation because I wanted to get my mother a place to live quickly. I thought about it and it seemed like a good idea. So I text the brother on Friday morning and I say, " I want to proceed with purchasing the home. Are you guys working with a title company? or Agent?" He says, "No." He was trying to get me to go down and give them all the money right away, $7,000. I agreed to give them $1000 down and sign a purchase agreement. Then I remembered something in the ad about getting approved by the park management first. So then I have my mother go down and get me an application and find out more information about the process. Turns out the seller's brother was not telling the full truth.  I would have to pay space rent $675, and garbage and water $66. I thought ok, still not too bad, total expenses $741 a month. Before I went down to sign the purchase agreement I told the brother I did not feel comfortable giving $1000 down because if I do not get approved by the park owning the home could be a headache because I will have to move it.

So I tell him I will put $500 down and I will bring an agreement for us to sign. I obtained an agreement off BP and altered it for our situation.  I go and have the sister sign an agreement for $7000 and then she says something in Spanish about appliances. I guess she wanted to keep all of them. Not thinking and not knowing how to speak Spanish I proceeded with signing the agreement.

Over the weekend I spoke to a few people. They were telling me get inspection and asking questions. Not having much money to put into this I was not going to get an inspection. I started to do my due diligence for other little things. I looked around at appliance prices and realized that might cost me another $3k to get new ones. (not very inspiring to go through with the deal) I had my mom turn in the application on Monday and the park manager tells her more interesting information that I was not aware of. Which they sold the home to the seller. For less with all the appliances. Did not bother me too much everyone needs to make money. Then they said there are property taxes that need to be paid and there will be a rent increase each year. Then I am thinking wow there is so much that was not said. Too many little expenses that I do not know if my mom can afford. So I text the brother and tell him if they keep all appliances I can only afford to give $5k for the home. He says, "No and starts being completely rude." So I back out the deal and cancel my check, which I feel horrible about but they were not going to give it back even though the agreement allowed me to get my money back. I tried to get it back, and No luck. I told them I would still give them $100 for their time. The whole deal seemed to risky and sketchy there were a lot of red flags that I was justifying. When I backed out all the way and informed them about the stop payment, the brother starts texting me all kinds of crazy rude things. Not a professional at all. I am glad I backed out I saved a bunch of money but at the same time I kind of feel I should have went through with it to see how it would ended up.

But the whole reason why I am doing this post is to get some feedback. What could I have done differently? Is there anyway to negotiate space rent?

**thanks for reading Stephanie Garcia, I apologize if the story seems all over the place.

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Sacramento, CA · Member since 2015 · 35 posts · 13 votes
10y

I think the biggest advice I could offer, based off what you've shared is, trust your gut.

It sounds like you recognized the red flags fairly early on, yet you decided to proceed with things until the red flags become too numerous. If red flags pop up/ things smell fishy there's nothing wrong with asking firm questions and demanding solid answers. If you don't get them, walk away. 

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  • Nic WilliamsPro Member
    Real Estate Agent · Sacramento, CA · Member since 2015 · 24 posts · 8 votes
    10y

    Hi Stephanie- I know of an off market mobile / manufactured home for sale right now in Sacramento.  It's very similar to what you're looking for, although it's in the south Sacramento area.  I saw it last weekend, and although I didn't see much value from an investor's perspective, it may be a good option for your mom.  It's also in the same price range that you mentioned, with all appliances included!  Send me a private message if you're interested in hearing more about it, and I can certainly put you in contact with the seller. 

  • Sacramento, CA · Member since 2015 · 35 posts · 13 votes
    10y

    I think the biggest advice I could offer, based off what you've shared is, trust your gut.

    It sounds like you recognized the red flags fairly early on, yet you decided to proceed with things until the red flags become too numerous. If red flags pop up/ things smell fishy there's nothing wrong with asking firm questions and demanding solid answers. If you don't get them, walk away. 

  • Investor · Gilroy, CA · Member since 2016 · 255 posts · 195 votes
    10y

    Reallistically your financial situation is no different than before making the offer. So while you still have a need for a home, you lost a little time and fuel to still have options to go forward with a deal your more comfortable with.

    Good luck to your family!

  • Real Estate Agent · Phoenix, AZ · Member since 2016 · 738 posts · 1k+ votes
    10y

    Basically you made a $500 mistake instead of a $7,000 one.

    Like Frank said, trust your gut. If something about the deal seems fishy, pump your brakes before moving forward.

    And if anyone ever starts demanding all the money right away, that should be a sign you have a problem on your hands. Either they really need it and will not give back down payments because they can't afford to, or they realize they've found a sucker and can't wait to cash in on your ignorance.

    I'd say chalk it up to a win, as you learned more about doing proper due diligence before signing the dotted line, and overall this lesson was extremely cheap compared to the price that others have paid when breaking into real estate.

    Best of luck in the future!

  • Sacramento, CA · Member since 2014 · 73 posts · 16 votes
    10y

    Thank you all

  • Member since 2016 · 13k+ posts · 12k+ votes
    10y

    The lesson you learned is ask all the questions of all the right people before you develop any real interest in a property. 

    Dealing with the low end of the market means doing your due diligence before you say yes.. 

  • Sergey TkachevPro Member
    Investor, Agent, CPA · West Sacramento, CA · Member since 2009 · 690 posts · 262 votes
    10y

    @Stephanie Garcia, thank you for sharing!  This is a pretty good learning experience and a fairly inexpensive one :).  I'd say the biggest takeaway is that you can never ask too many questions and always double check the seller's answers against other sources.  If a seller tells you information that doesn't check out, you know that you need to dig deeper and usually the deeper you dig, the quicker you find out if you can trust the person or not.  This goes back to what's been said numerous times here on BP and the podcasts, that this is a people business and it's great when you know you are dealing with a person you can trust and unfortunate when that is not the case.  

    Thanks again for sharing, this is a good example for others to know what questions to ask in similar situations!

  • Investor · Springfield, OR · Member since 2016 · 2 posts · 0 votes
    10y

    Pluses and minuses of manufactured homes:

    We lived in a manufactured  home in South Sacramento for about 10 years and it was a great financial set up - but only for one reason: we owned the plot outright.  The thing is about these older manufactured homes is that the structure itself is not worth much, and it depreciates rapidly to be worth even less.  So you wind up in situation where you are building up no equity at all ( in fact losing equity) but paying a park rental fee every month.  Do the math - the park rental fees are often getting to the point where the monthly cost is  not a lot different than a regular mortgage on a stick built house of similar quality, BUT YOU BUILD NO EQUITY!

    We lived in Florin Mobile Estates in south Sacramento.  Each owner (about  200 in the park) held title to the plot outright ( I believe the term is "Fee Simple). The monthly park fee was $50 which covered the cost of the pool, tennis courts and clubhouse.  I believe that this is the only one of it's kind ( well I think there is another in Rancho Murietta, but it's very high end).  I think there are some other nice parks in that neighborhood that are slightly different - each resident owns a share of the corporation that owns the park as a whole. 

    We moved away to Oregon in 2011, so things may have changed.

  • Real Estate Agent · Sacramento, CA · Member since 2015 · 338 posts · 135 votes
    10y

    Take it as a lesson learned.  Going forward when looking into a mobile home be sure to talk to the mobile home park to get all the fact straight. As you can see sellers are only looking out for themselves.

    If I were you, next time you see a mobile home you may like immediately talk to the park. I've run into parks where it's not as easy as a seller selling to a buyer and it being a done deal.  Sometimes the mobile home park has requirements that the buyer must meet like certain credit score, certain income, etc. just like if one were to rent an apartment.

  • Engineer · Genoa, NV · Member since 2016 · 87 posts · 59 votes
    10y

    @Stephanie Garcia I think you made a very good decision to back out of that deal. I think your idea to find a nice mobile home for your mom is a good one and there should be quite a few in the Sacramento area to choose from. So, take your time, don't let your emotions get the best of you, and go find a good deal! Best wishes :)

  • Real Estate Investor · Audubon, PA · Member since 2009 · 13k+ posts · 8k+ votes
    10y

    Two lessons that you should learn from this. 

    1. When you are buying, you cannot simply trust information you get from a seller - you must verify. 

    2. All money should go through escrow - even deposits if they are not being held by a licensed broker that represents one of the parties to the transaction. Since in the case of the OP there was no broker for either side, then deposit money should have been put into escrow with a tile company (or other business that handles real estate settlements for that area).

  • Investor · Citrus Heights, CA · Member since 2016 · 29 posts · 13 votes
    10y

    @Stephanie Garcia, there's been a ton of good feedback and I wanted to thank you for sharing. As a new investor myself, these kind of stories are awesome to read to learn from.  The one message I've been trying to keep in the forefront of my mind is don't go into any deal emotionally. Always, always, always remember it's business, nothing more! :)

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