Singlewide Trailer home on land?

Question

Trying to buy property in a very fast paced market right now with average home prices of 300k going up. Extremely high demand for rentals.

I have my eye on a 70s trailer home, 2bd 1 bath, with a little porch and two small additions, a mud room and a dining nook. It’s on a nice big lot in a B neighborhood, has a well and septic. No garage or shed or anything. Interior has new floors and painted panels, so somewhat updated. Not on a permanent foundation as far as I can tell, so that should help keep taxes low.

Listed for 139k currently. Been on the market for a while. Thinking about offering 95 k cash, live in it for a year while making it a little nicer and then maybe rent it? It would probably rent for 1200 as of now.

Looking for any possible strategies to utilize here. Is it worth it to make it nice? Should I just sell it at some point and build?

Theresa Reynolds · Answer

@Joe Splitrock

Thanks for your input. Since it’s been on the market for a long time and even though everyone wants to buy there, this one seems to have fallen through the cracks. The issue with it is also that it seems to have some water damage in the ceiling and the work they did on it was really just putting lipstick on a pig. They just painted over everything but didn’t really fix anything structurally.

When I looked it up the property itself appraised for about 50k last year and the trailer for like 15k. So I really don’t want to offer more than 95k because the trailer to me doesn’t have any value except I could rent it for a few years.

The location is in a nice neighborhood but not in a fancy neighborhood, I would say upper middleclass. People definitely take care of their homes there.

Joe Splitrock · Answer

It sounds like it may be worth $65K, but if you can rent at $1200 maybe the cash flow justifies it. I was thinking worst case it may be a buildable lot for a better structure.

Joshua D. · Answer

@Theresa Reynolds

These trailers can be great cash cows!  We have 3 of them in our portfolio. They rent for about $1000 a month and we have picked the up for 50-70k.  Course mine are all mid 90s or newer....

Joe Splitrock · Answer

Trailers built in the 70s were designed to last 20 or 30 years at the most. They may have fixed it cosmetically, but the structure itself is way past it's life expectancy. What would the land value be without the structure on it? Depending on location that land could be worth half or more of the sales price, which is good since the structure isn't worth much. You can try offering $95K but that is a major lowball offer in a hot market. I would only buy this property if the location was excellent.

Mark Brogan · Answer

@Theresa Reynolds, there are many options you can do with these type deals, living there for a while will give a better understanding of what it takes to live in these homes, me personally I own 2 that I live in and we love them, renting them out can be a good way to get started in this business good luck

Rachel H. · Answer

@Theresa Reynolds If it's an older home, smaller and you plan to live in it, it's best to see if you can actually live in it before making an offer if that's what you intend to do. The deal killer for my criteria with most of the 70s type mobile homes are that many don't have central heat and air conditioning. You may want to check out the place and do a walk through before committing to putting in an offer. See if the home lives up to your standards of living.

With an older home, there may be some deferred maintenance that you may have to pay for. Items that may need attention and/or maintenance include: roof, plumbing, hot water heater, subfloor, siding and skirting. If the home is lacking central heating and air conditioning and this is something you want to put in the home, you'll have to check around to see how much this would cost. In my experience, it's pretty expensive to put this type of system into a home especially on an older model. You may want to check all of these items before putting in an offer.

If I were going to be moving into a home, I'd definitely do a walk through before putting in an offer. Hope that helps. Good luck!

Reid Hanley · Answer

One off the good thing about the 70's 2/1 mobile homes is that they are only about 750 sq ft ( I own several of them) so you don't have to put a ton of $$ in to them to improve them - as long as you don't over pay for the labor! If you live alone 750 sq ft might be enough, but it gets pretty small once 2 or more people live there, so be sure it's a good fit for you if you plan to live in it for a while.   Also, do good DD before you buy...don't get blindsided by a bad well or septic at the end of its life.

You need to really understand your market to make this decision.  Don't assume anything.  Do the research.  I'd post an add on FB or CL advertising this home for rent at $1200 to see how much demand there is.  If you get enough interest it may be worth it.  Also think about your exit in case you had to sell.  Could you sell it for a profit (or at least break even) in the near term?  Good news is that's not that hard to do.  Call some realtors, search FB and CL for similar properties,..etc.   Good luck!