Manufactured Home in Mesa, Arizona

[Billy Bell]

Hello BP Community!

I may have a deal underway as I have an extremely motivated seller with a manufactured "double-wide" home in Mesa, AZ. Most likely looking to wholesale it.

Stats:

-The property is right by the intersection of the 60 and the 202 freeways.

-Approx. 1100 sqft

-3 Bed/ 2Bath- Split floor plan

-2 Car detached Garage- Steel construction

-In good shape structurally, could use interior paint on walls and cabinets. 

-Brand new carpet and water heater

-A/C and swamp cooler in good condition

-Fenced in back and side yards

-No HOA, but still part of a lower level country club out there.

-owned free and clear, taxes current.

-ARV: 75-80k based on MLS comps.

Seller wants 52k and will leave all furniture, and 2 beautiful gun safes worth about $1500 combined

Property and numbers look good, just never done a deal on a manufactured home, and not sure how much confidence I should have in it. Should I not worry about it and treat it like a regular SFR? Should I stay away because it's less desirable than and SFR? I pretty much don't know what I don't know about how the market is for these manufactured homes.

Any knowledge, experience, advice, and/opinions is much appreciated to help me confidently send the purchase agreement or confidently decline the deal all together.

Thank you!

Billy Bell

[Curt Smith]

Billy, here's some key issues. This is our main business for the past 2 yrs after discovering double wides on their own land (not in parks) are great for high cap rate vs SFR here in GA and given our tricks re buying doublewides.. 30% vs 15%.

An issue: always doubt MLS comps when trying to value a mobile home. Drive the comps!!! Make sure they are equivelant homes. Not stick built vs your doublewide.

2nd issue with mobile homes:  98% of listed mobile homes never sell for but a fraction of their listed price.  Find sold prices, not listed.

How our business looks like:

- Our purchase costs are:  $15k to $25k for a 1996 to 2004 doublewide with land.  Anywhere from .5 to 2.5 acre for the above price.  We buy listed REOs from banks, or off auction sites.  Here in GA I have few folks bidding against me.

- All in costs are $35k, we rent for just under what SFR rents for and rent to own only. We NEVER rent these. The exit is seller financing using a LMLO and following dodd frank ATR, MLO etc.

- The key to selling this to a financed buyer is.  This is key!

- Must have the home title retired to real estate (the land)

- Must be on a brick foundation NOT skirting.

Your cost basis is much higher than mine.  You'll need buyers to be financed.  You'll never find a landlord or occupant with $55k in cash.  If they had that much they'd be crazy to put it down on a doublewide.

Banks will only finance if:  mobile home title retired to land, home is on a brick (permanent) foundation.

Call around to local banks looking for lenders.  Knock on neighbors doors to find where they are financed.

Worst case have buyers go through the loan shark mobile home lenders:  VFM, century21.  Google mobile home lenders.

You've got a wholesaling issue re a financed buyer

- Banks do not let assignments get paid on the HUD. I have never heard of an un-licensed wholesaler getting paid when a buyer gets bank financing.

- This hits the heart of many BP threads on wholesaling vs licensed.

- you are acting as an agent if you try to bring in a financed buyer, is the effect.

- Banks hate fraud, so they won't finance unless the "representative" at the table is licensed.  You are that "representative" of the seller.

You'll need to read up on the licensing vs wholesaling issue.

Wholesalers are relegated to cash transactions and then only if you don;t do many things depending on your state's real estate laws. You can't tell the seller "I'll find you a buyer". That is acting like an agent... You can only say "I'll buy your house", then sign a P&S that is assignable and find a cash buyer...

As an "investor" you can sign a lease (with sublet clause) and option to buy from the seller.  And proceed to find a tenant buyer who you sign a lease and a std optoin to buy contract taking a one time payment as the option fee.  You stay in the middle for a sandwitch lease option.  

There's another tactic of "wholesaling" the lease option back to the seller.  

Or the seller offers seller financing to you, you are now in the landlord business or you can find a tenant buyer for a lease / option.

Unless you close and buy this property yourself with or without financing, I don't know any way you can wholesale this deal to a financed buyer.   

I always put up test ads in craigslist.org offer a similar deal, no address or pictures, to test if there are buyers out there before I get into a new area, price range or property type.