Manufactured homes for first investment!

[Omar T Sharaf]

Hello,

I'm looking at my first property to buy, it just went on the market last night. It is a 2 bed 1 bath manufactured home. Asking price is 39,000. Year is 1978. I ran numbers conservatively on it and it works. I can get 800 a month in rent. I will be financing this with 20 percent down. Have not walked the property yet, but my realtor is working with the seller to let me walk it.

Please any advice from experienced manufacture homs investors. What should I be focused on when it comes to these types of homes. I understand they do not appreciate. I plan on doing a minor rehab in the property based on video floors need updating a possibly kitchen and bathroom. Is this a good idea to rehab or rent as is current condition. Condition is not unlivable just not modern looks.

Is there anything I left out that I'm not looking at?

[Mark Kendall]

I bought and rehabbed 10 mobile homes and owned a small mobile home park in South Carolina. I'd say the only thing I didn't like about the business was plumbing. Here's my 2 cents:

1. Polybutylene is a water piping that was used in many mobile homes from the 70s through the early 90s. There was a billion dollar class action lawsuit against the manufacturer in the 90s and polybutylene can no longer be used under US building codes. The polybutylene gets pinhole leaks that have to be stopped. Plumbers will recommend re-plumbing the whole home. The re-plumbing will cost more than the mobile home is worth. But, maybe it will be worth it.

2. The other issue is many mobile homes are on septic tanks. As a rule of thumb, those septic tanks have a lifespan of 30 years. So, if it's a 1978 on a septic, does that septic have any issues? 

Otherwise, I like mobile homes. There's always a need for more inexpensive housing and as an investor you get a lot of ROI.