Experience gained in moving & rehab of manufactured home.

[Lori Souza]

Investment Info:

Mobile home fix & flip investment.

Cash invested: $300,000

Purchased a vacant residential lot and a used 2004 Manufactured home in 2 separate transactions. Made necessary improvements to move the 2700 sq ft, 5 bedroom/3 bath manufactured home onto lot and did repairs required for occupancy permits to sell home. Provided both project management and hands on labor to accomplish final restoration. Home is under contract.

What made you interested in investing in this type of deal?

It was primarily for a family member that needed to upgrade their housing for a growing family. I was initially looking for a site-built fixer to rehab and sell to them, but inventory was very limited. I found a lot that was in the area they needed and then found a large manufactured home that needed to be moved.

How did you find this deal and how did you negotiate it?

the lot was on market and posted on Redfin. As a result of previous, unrelated conversations with brokers who sold manufactured homes, I discovered that many of these used homes are posted on Craigslist and that's where I found this home. I called the listing agent and found out that it was much closer to my desired location than I originally thought. I made a cash offer that was within my budget and the buyer accepted. We also had to do a lease back to seller who was building a new home.

How did you finance this deal?

Personal funds

How did you add value to the deal?

Moved the house to the vacant lot, using professional contractor licensed to move manufactured homes. This was a triple-wide home that had to be moved in 3 separate sections and then had to be restored on-site, including exterior shell and interior drywall and finishes. I managed the project and applied for all permits, and did a lot of the interior labor. The family member involved also worked on the project, as well as had friends who had needed construction experience that helped.

What was the outcome?

Buyer is currently living in the house, paying rent, pending completion of financing. Because of the "twice-moved" status of this home, financing was limited and they are using a Private Lender for 65%. This is a family transaction, so they will be doing a combination of lender financing and owner carry for a year, and then refi to combine loans in a year.

Lessons learned? Challenges?

I learned a lot about the benefits and challenges of dealing with manufactured housing. There are definite limitations on financing a used, or "twice-moved" house - no FHA, VA, USDA loans are available for these used houses. There are lenders who specialize in this market, but the retail buyers need to be aware of this before you accept their offers. The benefit is that these houses definitely provide a needed category of housing and are quicker to get installed than site-built.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Cindy Dutton of Grants Pass & Medford area in Oregon was my local broker and was very responsive in working with me as an investor. She has a construction and development background as well.