Too Good to Be True?

Question

Hey everyone! I've been saving up to put a down payment on a home with a 3.5% FHA loan. My wife and I are full-time performers in Orlando so we'd love to start getting into the real estate game for some stability. We've been looking for a home to house hack with airbnb, move to another home after a year (per the FHA loan requirement) and find long-term renters for the first home, and repeat. We've been waiting for a good deal and for our savings to grow, as we don't have a lot to start with as far as down payment goes. But I just found this listing on Zillow. Based on the Investment Calculator template I've been using, this is ideal for our situation. Is this listing too good to be true?? I feel like it MUST be. But I don't know how or why. I'd love anyone's thoughts on this! https://www.zillow.com/homedet...

Jeff Copeland · Answer

This listing is for a mobile home that appears to be in a mobile home park, which is very different from investing in a single family home.

The mobile home is considered a vehicle, with a title much like your car. As such, it isn't considered real estate.

In some cases, a mobile home is attached to the land like a SFH and you can finance it much like a SFH.

But in the case of most mobile home parks, you'd only be buying the trailer, not the land, which means:

1. You'd likely need cash or some kind of private financing for the mobile home (seller financing is often offered in these situations) since it isn't real estate, and

2.  This is the real kicker: On top of your acquisition, financing, and operating expenses, you'd have to pay "lot rent" of probably several hundred dollars per month to literally rent the land than the trailer sits on (Note: I believe the lot rent is $780/mo, per the listing).

Shawn McCormick · Answer

Hey @Easton Curtis not positive here, but it looks to be a trailer park where you don't own the land, so you won't be able to get financing on that. Mobile homes in Florida are titled like cars, unless they are 'attached' to the land that you would own, you can't get traditional financing on them. Also, they are depreciating assets, this one is newer, but you won't get financing typically on units older than 1988  and double wides (lenders please chime in).

It is also listed from a broker in New York, which, to me is a red flag.

Easton Curtis · Answer

These responses are very helpful. I wasn't aware that they wouldn't be considered real estate, but that makes a lot of sense. I greatly appreciate you both taking the time to thoroughly answer and explain. Thank you, @Shawn McCormick and @Jeff Copeland !

Bobby Evers · Answer

Any time you see a mobile home look for lot rent. This one looks to be around $700 @ month. If so, you would not own the land. Also, Many of these type of communities in FL are age restricted to 55+. There can be a few exceptions.

Randy Gutierrez · Answer

Yes, too good to be true.

Rachel H. · Answer

@Easton Curtis You'd have to figure in the land lease with the mortgage on the home (if any) plus the taxes and insurance to see if it works for you. As others have mentioned, this listing is for the home only (as personal property) not the land. Hope that helps!

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