All Forum Posts by: Nick Ferrari

Alright guys,

I have purchased many SF & MF homes and i'm starting to build a pretty good base of knowledge on my numbers, what to expect from tenants, local markets etc.  However I don't have a clue about manufactured homes and i'm curious.

I have looked in several nice manufactured home neighborhoods with paved streets, communal walkways, good people, etc.  I have found several properties that look like solid investments...BUT do people rent these?  Honestly i'm not being facetious I genuinely don't know, and what do they rent for compared to the rest of the market?  My gut tells me yes people will rent anything anywhere but I'm not certain and I have no clue what to expect for rent.

I went onto rentometer for each neighborhood and none of them had alisting of the rent inside the neighborhood which doesn't tell me much because the other homes in surrounding neighborhoods probably rent for more inflating the median number.  I tried looking on your basic web searches to see if any rentals were in these neighborhoods but virtually no info that was relevant.  Does anyone have anything other than Zillow Rental, Rentometer, google, that might be able to give me some data?  Or even a hey I've owned a manufactured home for years and there are tons of people that want to rent it (or the opposite) any info would be helpful.  Thanks guys!!

Additional questions if you're searching for brownie points:

1.)  What are the lifespan of manufactured homes? I'm assuming they don't last as long as a well built SF.

2.)  If tenants come in what do you usually expect?  Retirees? Blue collar workers?

3.)  What's the resale process like on these down the road?  Are they hard to sell?

Let me give you a hypothetical scenario:

You have a HELOC valued at 150k you buy an investment property at 100k cash through your HELOC. You then go to your bank and request a standard 30 year mortgage at an investors rate since it's an investment property.

Since you purchased the property as cash do you need to put down 20-25% on the house since you're pulling out all of your money from the HELOC?

This sounds like a very basic Question but I've got a newborn and am on 2 hours of sleep and have never used a HELOC before so I'm curious the actual steps and what to expect.

Hey everyone,

We've been using a few of the same listing services such as Zillow, Craigslist, Apartments.com, and Cozy.co for getting the word out about renting our home.  We have had some nibbles but no bites any other services I am missing that you guys have had success with?

Just curious what service works best for you.

@Michele Wax

Michele put it best you’re asking for a small

Loan and for that small of a loan the interest rate increases. Banks make an investment in lending you money and if they lend you what’s looks around 36k they’ll make very little on their return at say 4%. That’s why you’re getting quoted a higher interest rate.

Another item to be aware of the Federal Reserve has been on a slow and steady interest rate increase since 2015. Many of us listen to BP or have bought homes from a few years ago and hear 2.5-3.5-4.0 interest rates and think well I got that in the past I should get that now. The reality is that the benchmark is 4.25 now and that’s continuing to go up. Even after Federal Reserve chairman Jerome Powell announced yesterday there will be no interest rate cut for the near future unless the economy declines.

In addition to this it sounds like this is not a conventional FHA loan correct? Your interest rate will be higher for what's considered a commercial loan as well. If you were to move into the property and perform what many people call a house hack (living in the property while renting out another unit). Than you could qualify for an FHA loan and receive a lower interest rate.

I hope all of this was helpful and good luck.

@Sean Rooks

Keep getting base hits and you'll be in the hall of fame. Don't undersell yourself. That's a great job on your first BRRR. Great job Sean.

@Ricardo R.

Fair point up front conversations in the beginning are about as honest as it gets.

@Costin I.

This is awesome thank you.

@Jason

@Jason D.  I believe Jason is correct on the legality of this.  I don't believe on a state by state basis you are not allowed to collect rent up front and if you do I believe it has to be held in a special account and if you evict you have to have a pro rated return on that said account.  I would double check just to be safe,

@Chris Courteau  

They can't have it both ways.  Your tenant can't an updated apartment with low rent.  Personally I would increase rent to what you want to raise which sounds like $650 and if they choose to stay than they can stay.  They will likely decide to leave and when they do now you have an empty unit in which you can update.  You have a responsibility to yourself to profit off of this building.  If you've done your homework don't wait another minute and charge what you believe the market value is.  Take emotions out of everything.

One last note if you do push it to $500, and you plan on eventually increasing it to $500 isn't the same thing going to repeat itself with your next tenant?  

@Brendan Edwards

I’m a property manager in Philly and the Greater Philadelphia area. If you would like to connect feel free to reach out. Would be happy to help.