4 manufactured homes package - could be my best deal this year

11 Replies

I found a property off of Zillow in Casa Grande, Arizona across from one of the homes I just bought at the end of November. It was on the market for 53k but I thought that I could rent it out for $650 or $675 and that the market value would be around 55k to 60k. The pictures of were nice and since it was across the street from one that I owned, I figured that I would through out an offer for 45k. It took the seller a little while to get back to me but then the seller accepted and said that they had 3 other properties in the area that were similar to this one and the seller asked if we would be interested in them. All 4 were manufactured homes on land (1 vacant, half way through a remodel, with some issues as far as access to the property, 3 others were located in Arizona City, Coolidge, and Casa Grande and they were rented out month to month for $640, $525, and $625 respectively).

We got them all under contract for 136k. Our plan is to finish the rehab (15-20k) making that property on an acre worth about 120k and rent it out for $1100 on a lease option and increase the rents on the other properties to $740, $625, and $700. Our total in should be around 155k for the 4 properties worth around 255k with rents at $3165. All units were build after 1976 built so they are financeable so we should be able to get a loan on them for 153k with a mortgage payment of around $1050. Add taxes and insurance on them and the total monthly expenses should be around $1500 -$1600 giving us around $1500 a month in cash flow.

All of this snow balled from a throwing out an offer on a property across from a house I bought back in November. 

Lesson learned: There are great deals out there, but you’ll never get them unless you just start making offers.

@Mike Kirby The banks that I work with are local to my area of Arizona. I hesitate to state their name here because I am not sure they give these types of loans to everyone. I have a relationship with the banks and my bankers so they do some things out of the ordinary for me when it comes to lending - which is something a bank can do in commercial banking which is where we're at in real estate.

@Shiloh Lundahl

Thanks. I bought a 2012 2 bedroom/2 bath mobile home from the oilfield guys when they went bust in South Texas for $15,000 that was 876 sq ft and added a 500 sq ft living room to it. All in cost was $63,000 with the lot that I already owned here in New Braunfels. I"ve been getting $1,150 a month rent on it for 2 years now. It's worth about $130,000 and I would like to use that equity but I'm having a hard time finding any banks that will cash out/refi mobile homes.

@Mike Kirby I had a hard time finding banks that lend on mobile homes too but I kept looking and networking with investors in my area until I found some. Also, it helps that I have a few million dollars in loans with their banks. They will allow for some mobile homes to be in my portfolios that they refinance.

@Mike Kirby and @Christopher Leet I just closed on the 4 property mobile home package on Friday. It was found out that the seller had an old 14k lien on one of the properties. The agent wanted to exclude that property and sell us the other three but only discount the package by 13k. We were not amenable to that so we had to record our interest in the properties to cloud the title so they couldn't just back out of the deal. It took sticking to our guns but the deal got closed. Now comes turning them into lease option properties.

We found out at the day of closing that the tenants that are in the properties had no leases and 2 of them have not been paying rent. We are going to go over to them on Monday to collect the rent. Without any signed lease agreement, I wonder if they would be considered tenants or squatters?

@Shiloh Lundahl Time to talk to an attorney. I doubt that anybody that hadn't been paying rent before this all started is going to start paying now. I personally would treat the ones not paying rent as squatters and evict as soon as legally/morally possible. It's hard for me to consider evicting at this time even though I'm in a similar situation. I bought a house at the tax sale on March 3rd in Guadalupe county. There are people living in it that haven't paid rent for 4 years that are not the legal heirs. I couldn't start the eviction process until 22 days after the sheriff's deed was signed so I hadn't started the process before covid-19 shut down the eviction process here. The sheriff's deed was signed on March 19th but I'm not going to contact the people living there until things get better. I just can't bring myself to start an eviction now even if I could.

@Shiloh Lundahl

They are tenants and not squatters however the remedy is the same......an eviction 

Obviously, that is not going to happen currently. Take the time to familiarize yourself with the process and deliver the proper notice so you can be up and running when the time comes 

@Greg H. we just finished an eviction last week on people who were using drugs and damaging our property and allowing other people to enter the property and damage it also. They moved most of their stuff out but kept coming back into the property. The constable was sick and wouldn’t return any of our calls for a couple of weeks all the while they were still just enjoying living in the property rent free. We had someone else who really wanted to rent the property because of the history of the property (It was built by Caesar Chaves for his workers), and because it had a guest house in the back where the unwanted tenants where, move into a camper onto the property in order to makes sure they didn’t damage it more and in order to keep out other people from breaking into the main house while we were rehabbing it.

We had a judges signature for the eviction but could net do it because the constable wouldn’t call us and deliver the notice. We were able to get them out because they moved most of their things out and he had given them a 30 day notice a month earlier. So we were able to get them out because they were considered squatters. 

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