Buying a lot in an existing development to put a mobile home on.

[Mitchell Hammack]

Hey all,

I have the opportunity to buy the only empty lot in a 55+ community. I'm not sure if its technically a MHP. It's a like a typical suburb where the homes and land underneath are fully owned by the homeowner, but all of the houses are mobile homes. I was thinking about buying the land, putting a mobile home on it, and then selling the whole thing for a profit. My biggest concern is around not understanding the process and costs for purchasing a mobile home, having it shipped and fully setup on an existing lot. I'd love to do the deal since on the surface it seems that it would be profitable. But perhaps someone would have some insight into the costs and challenges associated with setting up a new mobile home on a lot. I'm not sure if this is something that is commonly done.

Thanks

[Mark Mata]

I am in the middle of a land development deal using a mobile home. We recently purchased a lot and a USED mobile home to move to the lot. I am currently working with the city on permits for the move, foundation, and site plan. So far here are my anticipated costs and anticipated return. 

$33,000 - lot purchase price

$6,000 - 2010 3 bed 2 bath manufactured home

$3,000 - transportation 

$11,000 - set up costs (includes running city utilities to the home, decking, skirting, foundation)

$6,000 - repair costs

$5,000 - misc

$64,000 all in

Recent comps show we can sell for $140,000. 

Exit strategy #1 is selling for cash. #2 will be to point potential buyers in the direction of a lender we've worked with who will lend on a manufactured home that has been moved 2+ times. #3 would be to offer owner financing. 

It is a bit of a scary process but having multiple exit strategies relieves me quite a bit.