There Is Still Money To Be Made In 'Mobile Homes'

[John Arendsen]

There Is Still Money To Be Made In 'Mobile Homes' In Today's inventory strapped San Diego Coastal real estate market

I am frequently asked if the market is still ripe for investing in old "Mobile Homes". The following post may give you some ideas and suggestions about the viability of investing in older homes.

Cheap does not always translate to a good deal. It's all about the 'PATH of PROGRESS' & that means, yes we say it again, the LOCATION, LOCATION, LOCATION! Those looking for new or different ways to provide housing for your clientele, a vacation home for you and yours or perhaps even enhance your own passive income portfolio may find this article interesting.

We Purchased this 1977 12x36 (432sf)  single wide Mobile Home for 100k. Given its 300 foot proximity to, "BEACONS BEACH",  one of the Worlds most popular surf areas located in the city of Leucadia, Cali on the North San Diego Coast. Add to that it's nestled in an upscale neighborhood of multi-million dollar homes and properties. In fact the 92024 zip code boasts of some of the most expensive properties in all of San Diego County.

We are installing a 1x1 foot footing with an 18 inch rebar reinforced and concrete cell filled block and mortar stem wall  around the entire perimeter of the footprint in order to support the new interior drywall, exterior Hardy Board Cemetitous siding and a 12/12 pitched metal roof.

I'd say that's a pretty safe bet considering we're going to have to spend close to 75k (our cost as contractors) to strip it down to the bones and rebuild it from the mainframe up to and including the roof. In other words it will be a brand new home on a 1977 chassis which means for all intent in purpose it will transformed into a brand new 1976 Mobile Home.

This will be a total strip down including the cabinets which have already been removed, acoustic ceiling, flooring, wall paneling windows, doors, interior walls, floors, appliances, (water heater will be replaced with a much smaller tankless water heater which will give us an additional 32 cubic feet (4sfx8') of living space.

Above the furnace will be replaced with a sub floor heating system which will allow us an additional 32 cubic feet. An additional 64 cubic feet of interior space in a 432sf home doesn't sound like much but you will see when the project is finished just how valuable that space was and how much more open it enhanced the overall ambience .

This home will be literally stripped to the bones and rebuilt from the frame up. It will be a 432sf open studio with a fully functional custom kitchen with all  modern below counter small scale appliances and fixtures in the kitchen and bath. It will be reduced from a very cramped and cluttered 1 bedroom, 1 bath, kitchen and living area to a much more open and spacious one room studio with a full and enclosed bathroom.

Why not just remove it and replace it with a new one you may ask? Simply put it's about the existing setbacks and the fact that this MH is what they call "legal non conforming". So once from it's removed from its original situs the empty space would then have to become code compliant. 

This means that instead of a 12x36 (432sf) Mobile or HUD Manufactured Home you would have to install a 10x34 (340sf) Park Model RV thereby giving up almost 100sf or 25% which makes it a much tighter fit. 

{For some reason I can't upload the photo of the Park Model. Let me know if anyone would like me to upload one in a forthcoming post) 

There are issues with Park Models vs Mobile and/or Manufactured Homes. There are times when you have no choice but to install a Park Model if setbacks cannot conform to new installation standards. But there's much to be said about purchasing an existing home and doing the above.

When finished we will have close to 200k in the investment with a 25 year lease of 1000/mth. escalated according to the CPI. Our lease allows us to sublease for one year minimums which we plan to do for about $2500/mth + utilities including escalation clause.

In this cozy little neighborhood of upwardly mobile millennials looking for a fun place to live, work and play and the well healed Baby Boomers seeking a cute place to hang out, take long walks on the beach, bike the many miles of beautiful coastline, golf, fish or surf to your hearts content.  This may be your chance to downsize permanently with only rent and no responsibilities or to use as a vacation home and live in and around the predominance of multi million dollar MANSIONS.