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Updated over 9 years ago on . Most recent reply
![Jacob Knowles's profile image](https://bpimg.biggerpockets.com/no_overlay/uploads/social_user/user_avatar/371550/1621447297-avatar-jacobk4.jpg?twic=v1/output=image/cover=128x128&v=2)
Whats the downside to mobile homes for buy and hold to rent?
If you missed my other post. I am new and will probably have a few questions while I am studying and analyzing deals the next few days. One question I have right now is whats the down side to buying mobile homes for buy and hold rentals? They seem to good to be true. The only thing I can think of is because they might not appreciate like a normal house does? or maybe you cant get as much for rent in a mobile home as you can a house? Whats the deal? As far as cash flow goes they seem like a no brainer. I have found some very reasonable 3/2s and 2/2s compared to houses their same size. When I calculate the numbers they seem to be a pretty strong GO, but like I said I am learning and am a little skeptical when something seems to good to be true. Would like to hear some input. Thanks!
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![Mike Sedlacek's profile image](https://bpimg.biggerpockets.com/no_overlay/uploads/social_user/user_avatar/320042/1621443970-avatar-mikbuysre.jpg?twic=v1/output=image/cover=128x128&v=2)
I've been in the mobile home business some 10 years. I once owned a 50 unit mobile home park. I also managed other family owned parks. One thing I have to say about mobile homes is the up keep as they age. Roof issues, siding issues, leveling issues, HVAC issues and especially tenant issues. We have experienced that most tenants don't take care of thier mobile homes. You really have to stay on top of them, especially in your area when it comes to winter. Frozen sewer pipes and water pipes are always an issue. You have to be sure you winterize all the exposed pipes before winter sets in. We have had fires with electrical pipe wrap products. Another issue is trash around mobile homes, tenants don't seem to care about how much stuff is thrown around thier home, they don't pick up for themselves and un-registered cars seem to follow the mobile homes.
On the good side, I have purchased used mobile homes, rehabbed them and sold them owner finance. Much better way to go then owning them. You get a monthly check on the loan and lot rent to boot. And you don't have to deal with trailor issues. We have purchased country houses with 3 acres and installed mobile home pads and extended utilities and rented out the lots with the house. Three mobile homes and a house on three acres. Lot rent at $275 times 3 = $825 add the house rent at $1,200 = $2,025 monthly. Then if you purchase 3 mobile homes under $10,000. Rehab them for under $5,000 and sell them at $20,000 with $5,000 down at 6% amortized at 25 years gives you about $166 per month. Add that to the lot rent $166 + $275 = $441 x 3 = $1,323 plus the house rent $1,200 = $2,523 per month x 12 months = $30,276 yearly. Then each year you raise the lot rent by $10.00 monthly if the market allows.
Now repeat this 10 times over the next 10 years and you become well off for the rest of your life.