Receiving a free house... help

6 Replies

So I have been anxiously waiting to get started in my investment career, but my lack of funds has prevented me from just jumping in and buying a home right off the bat, until now. 

My mom is (finally) moving out of her single wide trailer and has agreed to give me the home absolutely free. As stated it is a single wide manufactured home, not too pretty on the inside or out but livable. She tried to trade it in a few years ago for another mobile home but the trade in value was only $2000. I can keep the home on the property it is on now for as long as I want, just cant rent it here (land owned by family) so to rent it out ill need to a.) Put it in a park and rent. b.) Buy land and rent. 

I will be fixing it up first though, mainly cosmetics and duct work, but I am assure with what path I should take to get the most out of it. 

Should I rent or flip?

@Andrew Baker , you need to look at your market.  What is a comparable mobile home selling for and what can you rent it for?  Another thing to be aware of is that sometimes moving mobike homes is tricky.  Some can fall apart, especially older ones.  Even if they hold together any new work done can be damages.  The older homes had wood paneling as walls, high fire danger, but help up well in moves.  If you have drywall, it has a much better fire rating but you can get cracks etc, as well as occasional water leaks etc.  If you can get $500 per month in rent but it only sales for $2000 then I would rent it for awhile.  If you move it to a trailer park you must factor in lot rent.

Originally posted by @Jerry W. :

@Andrew Baker, you need to look at your market.  What is a comparable mobile home selling for and what can you rent it for?  Another thing to be aware of is that sometimes moving mobike homes is tricky.  Some can fall apart, especially older ones.  Even if they hold together any new work done can be damages.  The older homes had wood paneling as walls, high fire danger, but help up well in moves.  If you have drywall, it has a much better fire rating but you can get cracks etc, as well as occasional water leaks etc.  If you can get $500 per month in rent but it only sales for $2000 then I would rent it for awhile.  If you move it to a trailer park you must factor in lot rent.

 Most mobile homes in my area sell around the same price as homes do ,(60k +) but with this one I could probably sell for around 20k after repairs and rent for 500 - 600. 

If I could buy rentals for $20K and rent them for 2% to 3% of cost per month I would probably buy them if they were not in war zones.  I would strongly consider renting and start saving up for the next one.

@Andrew Baker - a couple thoughts.  What is your living situation now?  Are you in the same area, paying high rent or mortgage payments?  Maybe live in it and save a ton on housing expenses.  Rent your current house out?

If your family were to approve of a great tenant, would they not be ok with your renting it out?  Give them a little (say quarterly) with assurance it will end the minute the tenant becomes a nuisance?   I wouldn't be moving an old mobile to a rental park.  Probably not enough meat there, plus the damage potential @Jerry W.  mentions.  I'm sure it costs a few grand to boot.

Some info to help with the decision.

I'll throw out some numbers but they're specific to South Mississippi. 

Depending on the distance the mobile home will have to be moved. In my area I can expect to pay $2,000 to $3,000 simply to have it moved, set on site, skirting installed and strapped down. Another $300 or so is needed for dirtwork prior to delivery. Then plumbing can be $500 or more depending on the site. Next some kind of deck out the front and back doors. In the city two of our MH's are located,require a specific sized deck and steps. So there's another $600 or so apiece. Don't forget electrical hook up. This can be considerable.  The last one we had done cost us $1,000. Next is the air conditioning.  It'll have to be serviced and charged. You'll have to look aroundbutmyguydoes it for $300 as long as the elecelectrician has done everything so he can just tie into the quick disconnect.

Next is the requirement by the city to have an "improved hard parking surface". The only thing the inspector will pass is concrete. Again a specific size is required. Add another $1,500 to the total. Install a mailbox - $70. Add another $300 for the city permits and inspections. Oh yea all the work had to be done by a licensed contractor. 

Now you're ready to add all the moving damage, repair and reno costs. 

The last one of ours was minimal.  All we had to do was vacuum and wipe down the counters.

All totalled up that's in the neighborhood of $8,200 in addition to the purchaseprice.

 Boom- $625 per month.

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