All Forum Posts by: Jeffrey H.

I pluck homes from greater Lufkin / Nacogdoches area yearly - for the exact reason you mentioned.  Nobody likes to find a mover to move them 200 miles.  But I do make about 15 offers before one is accepted.

The local dealer still has to run it through the corporate process (Vanderbilt in this case), but they seem to consider the context and their time after it has been sitting a while.  This one in particular had been on the market for a year in a very remote area (East Texas border near Louisiana)...  Finding a mover to go out there and getting the site cleared to move the home off the property was probably the hardest part, and probably weeded out a lot of buyers.

After several months those homes will eventually be discounted through a local dealer in the area - my last one was listed for 12k and picked up for 3k, including taxes.  I was praying they wouldn't accept since I had to move it 200 miles and then put 15K into it for make ready.  Alas, it worked out fine but was much more admin than I prefer.

A few variables to consider when doing this: 

1. How long have the homes been abandoned by their owners?  The longer the period the less likely they will be claimed as part of your state's abandonment process - which you will need to use to obtain title after closing on the land; 
2. Are these homes currently being rented and maintained by the landowner?  Will there be a dispute among the tenants or do you have copies of the leases / estoppel letters that confirm they are simply renting?  You don't want legal issues when it comes to evictions; 
3. It's backwards for the Seller to put any value on these homes if they don't actually own them, so I do hope they're a bonus as part of the land purchase and not the core reason for your purchase...but it does happen and you need to account for that risk based on the answers to the first two above.

There are some companies that specialize in getting titles for these situations, you might consider seeing if they can do their magic prior to close so this is not a risk item for you...but in many states it can take 3+ months so may not be doable.

Keep us posted.

@Kat N. yep this is common.  You want the optionality to sell these homes to tenants, and not be encumbered by lack of titles.  And the other thing you can say to the Seller is, "since they are only $100 it should be easy for you to get them prior to close!"  Getting them is not a difficult process, but there are 4-5 steps and it takes a solid month if you're very good at it.  I just hate doing it...

Keep us posted how it goes, we're happy to help along the way.

There are very few lawyers who specialize in just MHP's, and even fewer in Texas.  The reason is there are so many aspects of MHP's that no lawyer usually has that breadth AND depth to effectively advise on so many topics.

With that said here is my recommendation if you truly need an attorney:

1. Get a generic real estate attorney to help with a purchase contract, if that provides you comfort.
2. Bring in specialists for help if you have specific issues in a certain area you need help (e.g. zoning, grandfather status).

I have a custom 15 page MHP-specific contract I use for investor-owned MHP's (this contract is mostly padded with seller disclosures and outs for the buyer if materials facts are omitted - everything from utilities, zoning, and financials), and then for small sellers I use a 3 page TAR form.  One scares off small sellers, and the other does not.

There is one particular nugget in an MHP specific offer you should take away: mobile home titles.  Many Sellers will not have the titles to the park owned homes (POH).  They will make this your problem if you don't address it in the contract.  So you do this: put in a clause for a title offset.  

That means for each Mobile Home title they cannot produce by closing, you reduce the purchase price by $2,500 (or whatever your time is worth) for each home.  Some people will give the Seller 30-60 days extra where that is held in escrow - but the truth is that if you are clear and up front with them when presenting the contract, it won't matter and is not necessary.

Finally, the reality is that if you do proper diligence and have a reasonable feasibility period (e.g. 2-3 months is standard for any commercial property) then you will be fine.  If you need guidance on diligence I suggest the MHU Due Diligence Manual as your starting point.

I hope this information is useful for you.

I have done this a few times.

The exit strategy is fix up the mobile home and owner finance it.  But with your market rents so low you need to be careful how much you put into the home and land.  A singlewide on 1-2 acres given your market rents you need to be probably 30K all in, and could then sell for 50K on a note and collect interest.  A doublewide would give you better cushion, but still need to be around 40K in that scenario.  You'll want to escrow insurance and property taxes and try to get the payments around $650 total so that you're competitive in the market.  This means you're going to have to do some 12-15 year loans to get there (assuming a 5K down payment), and not sure if that meets your investment criteria.

I'd try to find properties a little closer to town where the rents are marginally higher in the $700+ range, but that's just me.  Good luck.

You see this setup when the soil is hard clay and effluent cannot percolate sufficiently for a septic system.  This means you have to hire a pump truck to periodically empty the holding tank, which is supremely expensive.  The alternative is a mound system, which you can expect will run 6 figures to install.

I have heard stories of parks that make very little money, if any, because the pump truck expenses eats all the profit.  Be very careful on this one.

Good luck.

Before you DIY this check with your insurance company this is not going to cause some exclusions in coverage.  The last thing you want is for a wind storm to blow the home over after you've done the work, injure some tenants, and then your insurance company leaving you with the bill.  

For new homes or any moved home (in Texas) there are standards that licensed installers adhere to, but not sure about tightening up existing anchoring for older homes.

Good luck!

Demand in Houston for affordable housing is unbelievable.  I think it's going to be very difficult to find something inside city limits - you're best off looking outside town in the suburbs and unincorporated areas, or otherwise small towns 45 to 60 minutes away (e.g. Conroe, Huntsville, Sealy, Dickinson, Galveston, etc).