Mobile Homes

4 Due Diligence Steps to Take BEFORE Purchasing a Vacant Mobile Home

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Vacant mobile homes come in all shapes, sizes, ages, and conditions. If you have not walked through or purchased a vacant manufactured home yet, you will — especially if you plan on purchasing or investing in mobile homes in the near future. While these homes can absolutely offer tremendous value and profit, there is of course proper due diligence to be done before pulling the trigger on any deal.

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Below are a few things to consider before purchasing or investing in any vacant mobile home inside a pre-existing park or attached to its own private land.

4 Due Diligence Steps to Take BEFORE Purchasing a Vacant Mobile Home

Learn the Seller’s Story

It can be very important to understand why the current home is vacant. How long has the home been vacant? Where are the sellers living now? Is there something wrong with the home, community, or land?

Many times sellers have perfectly logical and rational reasons for their mobile homes being vacant, such as they purchased a new home, moved across town, upgraded, downgraded, etc. However, other times there may be structural problems with the home, utility problems with the park, flooding issues with the land, or a combination of literally thousands of other issues. The important takeaway is to make sure you understand any potential problems with the home you may be buying.

Related: The Top 5 Reasons Investors Are Loved & Hated Within Mobile Home Communities

Pro Tip: Look and listen for inconsistencies in the seller’s story that may lead you to believe the seller is lying or omitting certain truths.


Ask Park Management a Few Questions

Ask the park management if they are aware of any problems or current violations with this vacant home. The seller of this vacant mobile home may be a private seller, or the seller may be the mobile home community itself. This is because many mobile home communities will occasionally find themselves with a mobile home they need to resell. These vacant homes may be in need of repairs or conversely may be in move-in ready condition. If you are purchasing directly from a community or park manager, aim to negotiate 3-12 months free or discounted lot rent for a fast sale. Be aware of all current and proposed park rules and regulations to ensure a happy working relationship now and in the future.

Pro Tip: If the vacant mobile home will remain in the current community after you purchase it, aim to become approved at the park management before closing. Make sure to verify all payments, liens, and/or lot rents are current.

Plan an Exit Strategy

Your exit strategies for profiting should be known prior to making any purchase offers on this or any other investment property. If a vacant manufactured home needs repairs, who will be performing these repairs? Will this home be sold as-is for wholesale or repaired for a retail price? Will this home be rented or resold? Can this home be sold via conventional financing or an FHA loan?

Check Out the Electricity

Vacant mobile homes certainly have their advantages and disadvantages. While you are able to walk through the entire home unobstructed from furniture and debris, you may not have the luxury of running water or electricity. In these cases, it can be wise to briefly have water and power turned on temporarily so that you may verify the electricity works, there are no leaks, the hot water heater is operational, etc.

Pro Tip: Pay for this cost only if the sellers will not have the utilities turned on in their names. Turning on power and paying a one-time $100 utility bill may cause you to spot a massive water leak under the home that will cost $1,000+ to repair. These repair costs should then be reflected on an adjusted purchase price and terms.


Get Inspections Performed

How long have the utilities been turned off in this mobile home? Call the local power company and water company to verify electricity and water are ready to be switched on at this location. If the mobile home has sat vacant for longer than a certain number of months, your utility companies may be required to have the home inspected prior to turning power on at this home. This piece of code law is designed to help prevent fires and deaths in homes with outdated electrical or plumbing issues.

Pro Tip: If your mobile home property is located inside of a park, this community may be able to turn your water on briefly without contacting the city. Consult with your park manager to confirm if this is possible.

Related: 5 Things You Likely Don’t Know About Mobile Home Electronic Liens & Titles

If you want to purchase a vacant mobile home that you fear may need an electrical inspection, call the power and water companies to verify if an inspection is truly needed. If an inspection is needed, aim to have the current owner contact the city/county permit department to schedule an inspection prior to you purchasing the home. This inspector will either clear the home as-is (which would be great) or will likely be very descriptive as to the repairs needed prior to being approved. This will greatly help you in not overspending when purchasing vacant mobile homes.

In conclusion, purchasing vacant manufactured homes is an inevitable part of almost every mobile home investor's portfolio. Like any real estate investing deal, there is always proper due diligence to perform and possible headaches to be aware of. Through education, asking others for help (through this site's articles and Forums, it is possible to protect yourself, help local sellers, and create a win-win value for all parties involved.

Investors: Any other steps you take BEFORE offering on mobile homes?

Let me know with a comment!

Investing since 2002, John started in real estate accidentally with a four-bedroom mobile home inside of a pre-existing mobile home park. Over the next 11 months, John added 10 more mobile homes to...
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    Terry Martin-Back Property Manager from Gainesville, Florida
    Replied over 4 years ago
    The stigma of mobile homes is going to be a factor for many investors. I’m constantly advising investors to look at mobile homes as an investment. Some other things I suggest you look at look at is the package HVAC unit, date it as well as checking the return and feed lines. Replacing a frozen unit can be costly. If the unit has been setting vacant for over a years, ask if the water heater was drained and before turning the power on, make sure the water heater is filled. You can always pressure test the water lines with air and set a gauge on an outside spigot and monitor is for a couple days. Mobile homes are great investments and can create double digit cap rates.
    Account Closed from Honolulu, Hawaii
    Replied over 4 years ago
    This sounds like almost any due diligence that should be done with any investment. Awesome tips!!! I will surely look in to mobile home investing in San Antonio, TX.
    Jonathan Casillas Lender from Four Oaks, NC
    Replied over 4 years ago
    Great tips. What I like the best was the “Pro Tips” through out the article. Thanks for a quick but informative read.
    Devin Bartley
    Replied over 4 years ago
    This is weird, but I really like the photos in all these articles. Possibly because they’re like a fantasyland of attractive mobile homes that I’ve never seen… Not hating! But I live in Florida, and there’s just a lot of parks, with few that I could call pretty. Still, it’s not my main strategy, but I have a motivated seller with two MH’s (someone else’s lot) that I”m trying to figure out what to do with, and reading about them has gotten me fascinated. Some say ‘recession proof’ real estate investing. Even ‘pro-recession.’ LOL. Anyone like to weigh in?
    Replied over 3 years ago
    I like that tip negotiate 3-12 months of free rent for the lot. Remember, having an unused home costs the lot money. I’m thinking about getting a mobile home, so that I can get out of my parent’s house.
    Replied over 3 years ago
    I like that tip negotiate 3-12 months of free rent for the lot. Remember, having an unused home costs the lot money. I’m thinking about getting a mobile home, so that I can get out of my parent’s house. Reply Report comment