Should I flip a modular home in a 55+ community

Question

I have an offer to purchase a 1988 modular home in a 55+ community in Florida for $16000. It needs a new roof, a wall knocked down in the kitchen (to give it an open concept), paint inside and outside, new flooring and kitchen appliances. I estimated repair cost at $15000 with me doing all the repairs. The sell cost should be around $60000ish. I will have to pay a lot fee of $600 a month till it sells. The sell has to go through the park as I will not be able to sell it so im not sure what the commission for the salesman would be.

Would this be worth the investment?

Aaron K. · Answer

It needs a new roof, new paint, new flooring, and kitchen appliances, and you're expecting to spend only $15k on rehab?  The roof alone is probably $7-10k, appliances $1500, flooring $2k, and paint if you are DIYing is $500-$1000.  That's not counting the stuff you don't know is broken yet.  Commission is probably at least 6% so another $3k, and 55+ homes tend to sit longer because they have a more limited buyer pool.  Is there an HOA fee that you also need to pay?  Have you factored in financing costs?

Jermaine Chad Ingram · Answer

$600 is high for lot rent in Florida.

My questions would be:

What's the comp for your house in that community? What are others paying for rent? How many empty rentals in that community? Are there any assessments pending in that community?

Have you ever done a rehab?

Aaron K. · Answer

@Lance Conyers it can be worth it, but with this one I think there are a few things that make it higher risk.

1. It needs a lot of work, basically everything cosmetic except kitchen cabinets.

2. It has a bad roof, that alone is a big undertaking, I'd also wager that unless the HVAC has been replaced recently it may have some issues too, they just may not be obvious as it is currently December.

3. It's 55+ you are limiting your buyer pool to only that age group, and unlike a cheaper house there are a large portion of retirees who would be unwilling to pay an additional $600 a month off of a fixed income if they can afford something else.

Chris Rosenberg · Answer

@Lance Conyers I have no experience in this but I remember listening to someone on a BP podcast who said they did something like this and then the economy tanked and they took a bath because they had such a small buyer/tenant pool for 55+ manufactured home communities. Maybe it’s different with modular.

Lance Conyers · Answer

@Aaron K.

The HOA or Lot rent is $600 a month. I haven't factored in electrical. No fee for water, sewer and trash. The roof is only 900sq ft and after crunching numbers it'll cost me $15-20k.

I've never flipped a mobile home or modular home and not sure if anyone has any experience doing so and if it's even worth it.

Should I flip a modular home in a 55+ community

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