Need help evaluating a mobile home purchase

[William Walker]

I'm looking to purchase a mobile home and need some advice on the numbers and costs associated with mobile homes.  I've never lived in a mobile home so I'm not familiar with the different problems that arise compared to a house. 

List price is 25k but negotiable.  I'm hoping to get in around 20-21k.

Home is on .26 acres that comes with the mobile home.  It's a 1987 2 bed 1 bath.

Rented at $540 a month to a tenant who has been in place since 2013, on section 8.

Yearly taxes are $280.

It's got central heat/air, underpinned, front deck, on city water but there is a well on site.  All appliances stay with home

Tenant pays all utilities.  No pets or smoking.

He has a security of deposit of $500 that would transfer to me.

Home was updated in 2012 with new floors including sub flooring.  New paint, vanity, windows, and a "coat of seal" on the roof. 

One big concern is that the tenant was on a yearly lease but it has expired and the current homeowner never had her sign another (his first and only investment property, he is selling due to medical condition).  Current owner says she would be fine with signing another lease and wants to stay.  I was thinking of putting her on a month to month.

I would manage the property myself, and I was thinking of looking at it with $50/month CapEx, $50/month vacancy, $50/month repairs. That eats $150 of the $540. I'm paying cash. If the purchase price is 21k, the home would be paid off in 4.5 years while still putting away the $150 a month towards expenses. I guess I don't really have to set aside the $50 towards vacancy because I won't have a mortgage, so I'm not going to be putting that money to the side and then paying myself a set amount a month to make up for no rent.

Please tell me your thoughts about the purchase, any big expenses that I need to inquire about.  Thanks for any help BP!