Buying a lot with SFH and adding mobile homes

[John Romero]

Hello MH investors,

I hope this is the correct forum but Im currently searching for a piece of land that does or doesn’t have a single family home on it and I would add mobile homes. I’ve found a listing for a house on piers and on 1.3 acres. The house would need about $10k to finish upgrades that previous owner didnt get to. 

Currently it’s listed for $80k and new metal roof, new a/c and a few other new stuff including a good amount of interior improvements. Outside of the home improvements I would like to add 3 mobile homes to the lot as I have preliminary approval from parish/county. I would need to add another septic to fit the new capacity which will run $9500. I would also need to add utilities and pads for mobile.

With the prices for mobile home being high I would most likely fix up and rent out the house on piers (3/1 currently but part of upgrades would be to finish it into 3/2). After a year or so and if prices come down then I would make my improvements and add mobile homes. If I can get the listing for $70k I think the PITI would be around $700 and I should be able to rent the house for $900 maybe $950.

From my understanding our local municipalities allow up to 3 mobile homes to be added. I’m looking for some experience from people outside of my network, as I’ve talked to a few local contacts. Also if anyone has done this method or just bought a small piece of land and added a few mobile homes to it then please help. 

[Rachel H.]

@John Romero Before you move forward with the purchase, it's best to call your local zoning department and double check that particular piece of land is zoned for what you want to do. Get the legal description and parcel number, as they'll need to know it so they can look it up. Tell them exactly what you plan to do for that piece of land and ask if you can do it as it's zoned now. If "yes," that's great and you can negotiate the deal. If "no," ask the zoning department what exactly you need to do as far as zoning goes in order to move forward with your plan of adding mobile homes on the land. 

When in doubt, check and confirm with the government authority in charge of zoning. The last thing you want to do is buy a piece of land with investing plans only to learn you can't do it after the fact. Hope that helps! 

[Dave Rav]

@John Romero, where is this deal located (what state)?

Also, have you ever considered just buying a multifamily property, with homes already set up?

[John Romero]

Quote from @Dave Rav:

@John Romero, where is this deal located (what state)?

Also, have you ever considered just buying a multifamily property, with homes already set up?

Louisiana. My area has very few 4 units and less so they typically get overbid. I have been watching the market but most that become available for sale need a lot of work to get them up to my safety standards. I’m not ready to invest out of my zone as I’m not willing to give up my free time in that capacity. 

From my current point of view it seems logical to buy properties where I can rent the current house and then add mobile homes later to up the ante in regards to cashflow.

[Dave Rav]

A major consideration (actually a few) are 

1) zoning requirements

2) purchase and home moving costs.

3) infrastructure (do you already have septic/sewer, water, and possibly roads in place?).  Water and sewer utility alone is a major expense.  I recently looked at adding septic and water here local to me to a MH lot I own.  I walked away as the initial expense eclipsed what I was willing to pay.  And that was for ONE lot.

4) holding costs