Abandoned Mobile homes - Do you even touch them?

Question

I have been out looking at a lot of MH over the last week, I cannot believe the condition of some.

Some of the mobile homes I have seen really look like a tornado swept through. I'm talking busted windows, missing doors (int and ext), no plumbing fixtures, decks half tore out, siding missing, holes in the siding, cabinet doors missing, whole cabinets missing, garbage piles, missing floors, wire stripped out...

I cant believe some people waste their time destroying a property like that.

Does anyone here rehab these kind of properties and make money on them? Horror and success stories are welcome :wink:

Terry Drake · Answer

I'm not a big fan of junkers either but if a deal presents itself and you can make a good profit on it, then don't be afraid to at least take a look and crunch the numbers. My intentions were to not do any work but I ended up in a park and they had some vacant homes with a lot of potential. They were willing to give them to me for free and free lot rent until they sold. Some I sold as is, others I put in $1500-$2000 (labor and materials) and let my handyman do all the work and ended up with a completely remodeled MH in less then two weeks. Just to give you an idea how cheap you can get things done: My handyman gets $100/day (or $12/hr) and usually takes him 4-5 days to complete the job. Carpet is delivered, installed, tack strips and padding for $10/yd. (avg cost is about $500 to re carpet the home) Laminate wood flooring + under layment is about $1.20/sq ft. (kitchens/bathrooms are small, avg lam flooring cost is $150) Misc materials (plywood/2x4's/paint/cool seal) usually runs about $250. If you need appliances, stoves and refrigerators are about $75 a piece on craigslist. So for about $1,500 you've got a mobile home with no leaks, solid floors, fresh paint, new carpet, new wood flooring and ready to sell. An added benefit of doing this is the homes show much better and sell quicker (an even bigger benefit is these homes appeal to the more picky cash buyers or those who fall in love with the place with a nice chunk to put down). Now you know when you walk into a home for sale like this and the guy wants 8k, you know you can do everything he has for less then 2k. Likewise if you walk into a home for sale with potential (nice ''floor plan'', cabinets, ect) but otherwise 'trashed' you know you can clean it up cheap and make a healthy profit. JM2C

Marc Faulkner · Answer

I would take the advice above and skip out on the junkers if you are looking to do Lonnie Deals. Remember that mobile homes are hard for most folks to sell because financing in most areas for mobile homes in parks (chattel loans) is next to impossible to come by for your average mobile home buyer. Take your time and find the right mobile home that doesn't need a bunch of work. Remember this is a buyers market. Your are the boss and your plan is to be the bank not the handy man. On the flip side I have a cash market for the junkers in my area. I sell them to farmers and to park owners that fix them up and place them in their communities. These are quick flips that I rarely have much money tied up into and the key is that I have a strong list of professional buyers that know the game and act quickly on good deals.

Just Don · Answer

BEFORE you commit to one,,,better check to see how much in back taxes are owed. MOST around here owe more taxes than they are worth. Not much value in a gut job MH. Even less if you have to tear down and haul to the dump.

Rachel H. · Answer

I think everyone kind of has their own area of expertise when it comes to buying mobile homes. I know some investors who do specialize in buying junkers for really low and fix them up. But, that's their thing - they enjoy the challenge. For me, I don't really take on these types of projects and usually pass them on to others who do. I guess it's all a matter of personality. Hope that helps! :D

Terry Drake · Answer

I should also mention I consider those repairs to be cosmetic and minor. I have definitely passed on homes that needed major repair. (Also called 'career rehabs')

Eric Gard · Answer

Ok thank goodness, I thought I was missing something. I was under the impression that some people would take mobile homes that were in need of major repair and flip them. But after I did some number crunching on a few homes they just didnt make sense.

Bill W. · Answer

Eric, Lonnie Dealers make money by using their cash to buy at a discount and selling on terms. This spread is how they make their profits. Spending money and time rehabbing homes will greatly slow you down in turning profits. There may be occasions that you should consider taking a complete junker and doing minimumal work to it to make it more marketable but generally speaking, you'll be better off passing off repairs to your buyer.