Mobile Home on a Cheap Parcel as spec house

[Ryan Rock]

I ran into a woman a week ago who had a great investment idea, I thought. She told me you can pick up a used mobile home for next to nothing, rehab it, put it on a piece of property with a well and septic and sell it at a hefty profit. She noted a particular geographic area near me that was ripe for this type of investment.  I did a little checking and, indeed, I think I can get a parcel for $50K, and a decent used mobile/manufactured, in need of updating, for $25K.I think a septic could be done for less than $10K. If a water meter is needed I think they are pretty pricey, like $25K. I don't know about drilling a well but I think it would be less. Then I need to pay for moving the trailer ($3K), home rehab (maybe $20K), some grading and pouring the perimeter foundation and steps (maybe $10K). I don't know about the permit fees. That's a wild card for me at this point, but I'll say $40K. So I'm getting a total of $173K. I think I could get some of those costs down with some more leg work and research.

I saw comparable properties for sale in this particular area for $200-$275K.

At a sales price of $200K it doesn't look that inviting, but closer to $275K (which is the end of the market where I think I'd be) starts to look appealing.

Does anyone have any thoughts or experience with this?

[Ryan Rock]

Hi Aaron. It is in the wine country in the foothills East of Stockton. The appeal, as compared to a stick built house, would be lower investment, lower sales price, thus appealing to first time home buyers, less time to complete the job, and a higher margin. 

As counterintuitive as it might seem, I am not surprised to hear your different lower home values for certain sectors in SoCal vs NCal. I was searching for property in the San Bernardino mountains a couple months back. I found the home prices to be significantly less in comparable communities of Northern California. For example, Homes in Lake Arrowhead seem to be considerably cheaper than homes in the Lake Tahoe area, or homes in Crestline seem to be cheaper than homes in Murphys or Meyers. I'm not saying my study was entirely scientific.

Mostly I'm hoping someone will reply to this thread with some actual experience in this department, or someone who has looked into it thoroughly and decided whether or not to proceed.