Is buying a manufactured home crazy?

Question

Ideally I would love to start investing in real estate using the house hacking method. My husband and I are working hard to find a lender that will work with us, however he is self employed and starting flight school (which requires a large loan) and my income alone will not qualify us for a traditional loan in our market.

Instead of continuing renting, I have been considering purchasing a manufactured home. My thought is that we can take advantage of the lower cost of living to start saving, and also be able to build a small amount of equity to be able to leverage to buy our first douplex/triplex after he has finished school.

If anyone has any advice or suggestions, I'd love to hear it!

Justin Poulsen · Answer

I agree 100% that there is a real pilot shortage going on right now.  Not at Delta, United, or American, but at their regional partners Delta Connection, United Express, and American Eagle.

• 15 years ago pilots would pay for their own training to get these jobs.  Shelling out $10,000 was pretty common.
• 10 years ago wages were peanuts especially the first year.  Starting pay of less than $20,000 was the standard.
• Today starting pay can be around $80,000 (including new hire bonuses).  On top of that many regional jobs come with a career path to the parent airline.

Having been through some of those lean years myself I started doing real estate just to try to survive.  My advice would be to focus 100% on flying til you get the career job.  Optimizing your housing with the mobile home might save you hundreds of dollars per month.  That's very small when compared to the money you can earn in flying or any other career.  Stated another way: right now the best investment you can make is in yourselves.

If I was starting out today I'd go to an accelerated flight school like ATP and knock out all the training in 1 year.  Then I'd get a part 135 job where you could get hired with 250 hours and build time to the 1500 for regional airlines.  After getting comfortable at a regional make sure to finish your bachelors degree if you haven't yet.  Many pilots use the California Coast online program.  Then keep applying for the top level jobs.

Good luck.

Matt Shields · Answer

A few things to know about mobiles. If you are going to rent the lot and buy the home you may find your expenses increase. Mobile home park pad rentals can be expensive, and moving them also cost a lot. If it is affixed to the land it is real estate, if not it is a vehicle  (check local laws) and depreciates like a vehicle. Even affixed, generally only the land has the potential to appreciate. Also, older mobile homes are very challenging to finance which makes them more difficult to sell. Sometimes you can find used older mobiles on the cheap because of this. I'm not opposed to them as an investment property, but you must know their limitations. You mentioned house hacking, are you planning to rent out a room in the mobile?

I have friends who are airline pilots and flight school is probably a good choice. There is a pilot shortage, and after school and a couple of years in commuter Hell he should be able to get a well-paying job, then you could qualify and invest in good quality properties. That's my two cents.

As always, seek professional advice.

Aaron Poling · Answer

It could be a good idea. Will you be putting it on a rented lot? If so make sure the park will allow you to rent the home out later and you can turn it into a rental later and purchase a duplex after flight school is over. I typically only like buying mobile homes that are attached to real property that you own but if it cuts your cost down and gets you into something of your own it could be a good pathway. You can also pay it down while living in it and sell it and take the profit and put towards a home later on.

Hope this helps a little! Aaron