Next you will want to dry out the area with a dehumidier and negative pressure air scrubber to eliminate any mold spores in the air.  

But could be improved with the right group of investors. 

Personally I wouldn't have the tenant build it, but 10 year tenants looking to improve the property may tend to keep staying.

With this said, overpaying for a mobile home AND over improving a mobile home are two big areas where newbie mobile home investors spend too much money.

Go Air Force...Steve 

And the best kicker is that the owner is willing to finance it with 15% down and 6% interest, which is better than any bank.So, I'll go ahead and use the formula mentioned to see what the worst case scenario would be:$800/mo x 10 homes = $96,000/year-50% Vacancy and or expenses = $48,000/year-$1900/month mortgage = $23,000/year-$250/month water = $3000/year-$110/month trash = $1320/year-$1943/year property taxes per-$1800/year insurance-----------------------------------+$96,000 Income-$48,000 vacancy/repairs-$23,000 mortgage-$3,000 water-$1320 trash-$1943 property taxes-$1800 insurance-----------------$16,937 Net Operating Income @ 50% expense/vacancyWe would have an extra $19,200 if we can keep it at 30% which we're hoping/expecting to be at on the second year after doing some improvements and getting everything rentedWe also believe this can make us look good with the bank for owning property and having cashflow to be able to get another bigger loan in the future.

So your 25% ROI may not actually be that high when you factor in high turnovers rates, high property management costs, and unexpected capital improvements.

Basis = what you paid + capital improvements - depreciation to date.  

Taxes will be around 20% of your actual profit (sales proceeds minus purchasse price/costs, plus any improvements you did).  

Hi Rehabbers and Builders.We recently had a plumber who disappeared into thin air along with the $1000 installment we had paid him.