Rent to own or rent or flip?

Question

So I’m acquiring (cash) a mobile home next week for $18k will take about $2k to be rent ready.

It’s an 1983 liberty leader 2br 2bath

Projected rent $1300 - 1400

Lot rent $640

Insurance $60

Do I flip it (probably sell around 40k)

Rent it

Rent to own?

I’ve never tried rent to own so I’m unsure how to structure it if that is the best route?

Could use some advice? I don’t know mobile homes but I know they depreciate which makes me think rent and hold is not ideal.

Edward Dandrea · Answer

@Rachel H.Definitely solid advice thank you. I do own a few rentals already so I know what your saying. The mechanicals heater electric etc are actually all new.The 2000 in work is more for the skirt around the mobile home has one or two spots that should be addressed and I’m gonna do some landscaping to make it more presentable. Roof is metal siding is good but could use fresh paint.

Joe Homs · Answer

I am flipping mobile homes built in the 70's. They still look really nice.

Account Closed · Answer

It's a mobile home, and he's probably aware of what happens to the value for the owner over the long haul.

Rachel H. · Answer

@Pamela Perkins Phillips You can try mobile home parks and local mobile home dealerships. Both I've found to be good sources of information for market insight and referrals. Another option is to focus on an area or two and look at mobile home subdivisions to find mobiles on land. Feel free to DM, if you have any other questions. Hope that helps!

Pamela Perkins Phillips · Answer

I am researching flipping mobile homes myself. Where should I look for good deals?

Edward Dandrea · Answer

@Jerry Lucker I love the advice and your right most parks don’t let you. I’m gonna canvas this specific park with offers since they allow it and have been very easy to deal with.The lot rent does cover property taxes in this case too so bonus.I am curious about your 20 year contract to buy and how you structure it.I had a friend renting a codon for 1200 who made it rent to own at 1700 for 5 years and and took the wax tea 500 over 60 payments or 30k as a down payment on the purchase of 80k leaving the buyers the task of coming up with the remaining 50.Is that what your suggesting with a 20 year contract? I found a renter for mine at 1500 and after expenses I’ll have a profit of 8400 a year which is great on my 20k investment, but you’re right about vacancies and wear. How would you suggest I structure a rent to buy ? The lot rent insurance and fees is about 800 a month

Edward Dandrea · Answer

@John ChongI like this idea for obvious reasons my concern if the taxes, doing an exchange to avoid taxes makes sense but in this market I only find decent deals once or twice a year

John Chong · Answer

I would flip it and make the quick $40K profit. Then you can buy 2 more mobile homes cash and do it again.

Jerry Lucker · Answer

I recommend flipping mobile homes in parks for cash. I wouldn't rent (most parks don't allow rentals), or sell on contract. If and when the renter/buyer disappears you not only have no money coming in but you'll be responsible for the park rent, the utilities, the maintenance, the personal property taxes, the insurance, etc. You'll probably have to rehab the house on top of all that.I have several mobile homes on lots - private property. I rent them for several years then sell them on a 20 year contract. I have investments that will pay me for 30 to 40 years. What makes it sweeter is that I purchased the units for 1/3 to 1/2 of what I would have paid for stick built houses of the same square footage. I get virtually the same amount of rent that a similar size stick built house would generate. I've always been able to find renters that are basically concerned with the size/bedrooms, baths.etc. - not if its a mobile or not :)

Rachel H. · Answer

@Edward Dandrea If you're looking to build up cash and not ready to buy and hold, it's best to try to flip it. A lot of things can come up when you hold investment properties. With the age of the property, I'd be sure to check the hot water heater, heating and air conditioning system, plumbing, roof and siding at a minimum. Other than that, expect to do some cosmetic work to the home to make it market ready. Though, if you're ready to buy and hold it may make for a good cash flow property. You just have to manage the risk and plan for the expenses accordingly including any vacancy issues should you need to cover the lot rent while it's empty. Hope that helps. Good luck!