1. Tear Old House Down 2. Put New House Up

[Dakoda Spencer]

Hey all, 

I have a situation that I am trying to think of a solution for. 

I just recently went and looked at a house that is in a great neighborhood and has a great 1 acre lot. It's an REO, they are asking 52k, the ARV is 135k-145k.

The house needs to be tear down. It is not structurally safe and would be nothing but a money pit if I did buy it. I know I can't pay near what they are asking.

I thought about buying it anyway (Only at the right price), tearing it down, and either rebuilding or putting a modular home on it. I'm just trying to figure out a way to make something happen with this deal. I know that there is a point that I need to walk away from the property, but I want to exercise my mind by trying to come up with other solutions. 

What are the costs of a modular home? Would I be able to do a cash refi at the end to pull some money back out of it? I would actually like to live in this area but not only if it makes sense. 

Any suggestions? Thanks!

[Rob Myers]

Remember that the property will always be labeled as a modular home which could impact resale value.  There are decent modular homes out on the market, but it will always lag behind a traditional stick built home.  Also, I believe there are more stringent lending requirements from Fannie Mac/Freddie Mac but don't quote me on that one.