Buy & Hold- New Manufactured Homes

[Jesse Jensen]

Will buying a new manufactured home (Trailer/Mobile Home) and placing it on a foundation make a good rental property? In my market following the 1% rule is difficult. It can be done, but the time and effort it takes to find these kinds of deals is a lot of work and time. I'm looking for a better way. In Northern Virginia, I've found that if you can provide a place for someone to stay you'll likely get close to $1,000 in rent. I've run the numbers on buying land and placing a manufactured home on a foundation and it seems to good to be true.

Location: Northern Virginia

Land................................$20,000

Manufactured Home.............$40,000

Transportation & Set-up........$5,000

Foundation........................$5,000

Well................................$5,000

Septic..............................$5,000

Utilities............................$1,000

Permits & Fees....................$2,000

TOTAL..............................$83,000

Mortgage 30/yr@4% ;1%tax ; $800/yr insur.............$532/mo

I should be able to get $1,000 in monthly rent. My goal is to pay cash and once construction is complete get all my money back with a cash out refi. This will allow me to do it all again very quickly. I wouldn't have to look for unicorn deals anymore- just buy land, develop it and put a manufactured home on it. What am I missing? How accurate are my cost estimates? Will a lender allow me to cash out refi on this kind of home?