1st Mobile Home Deal

14 Replies

Hello Everyone, I have been lurking and posting a little here and there on BP for a few month now.  Started around podcast 62 I think, listened to all the podcast in like a week or so while driving on my job.  Love Bp and all info here.  Wish I was in a larger area with other BP members to network with but you make due with what you have I guess.  Been tossing around the idea of buying some buy and hold's but houses are high here for what your return on rent is so I started looking at Mobile Homes.  Mind you mobile homes are high priced here as well where most early 70's (12 or 14 wides and 50 to 65ft long) models are usually in the range from 3-6,000 for a rough shape one in need of lots of work but rent is decent as well from maybe the $550-850 depending on the size and condition.  I knew I didn't want anything older than 1977 and would prefer something in the middle 80's.  90's would be awesome but they are all running around 15K-25K with most being over 20K.  That was too much for me to pay.  So I kept an eye out for some deals and looked at a couple older ones.  Most are just total junk and I wouldn't let my dog stay in them let alone try to rent them out but it is amazing what people buy and also rent around here.  I could by this older junk but ideally would like to have a nicer class of stuff in general.  Nicer stuff means a little better rent and maybe better class of tenent.  I finally came across a 1978 16x80 that was in pretty decent shape.  Not ideal for the age I was looking for but looked real decent for the age.  Needed carpets throughout and maybe some paint and minor stuff but overall compared to anything else it was good.  Also came with a newer washer and dryer and side by side frig.  Asking price was 5900.00 and it had to be moved.  I think it was worth all of 5900.00 in comparison to others so I put an offer in on it at $4500 and they accepted.  I had planned to move it to a park just up the street as well.  Long story short the Govt. agency that owned the home would not let me put it anywhere within my local city or even on some land I owned my self.  Again long story, so I searched around the outside my city for MH parks and didn't find park to keen on the idea of me renting out the home.  So after a few days of me looking and calling park and never getting calls back, the govt agency decided to take offers on it again.  So the broker that had the listing gave me back my deposit and I moved on but.....

On the bright side, a day or so before we decided to not pursue this 1978, I saw an ad on Craigslist for a newer 16x80 for sale.  Didn't have a price but it said it was a 94 or 95. I thought I would call on it for the heck of it because you never know.  The girl on the phone said it needs a total remodel, water leaked in from the upper wall or something where 2 pieces of trim meet so they torn out some sheetrock because it was wet.  So when we went to see it, the outside looked good.  Had vinyl siding that was in good shape, dirty but overall good.  Had a broken window or two as well.  Inside smelled of animals and all the carpet was out of it.  Some of the sheetrock walls were already torn out.  Most of the cabinets were out as well.  Some soft spots along a few walls but overall the floor was decent.  The back 2 bedrooms and bath were good.  Mainly it is the living room and kitchen that needs the work.  All the ceiling were great with no leaks or stains.  Now granted this might sound horrible to some but for me it was nothing I could not handle.  This was a 1995 16x80 3 bed 2 bath.  These around here are going for 20-25K.  So got to talking to the girl and her and her boyfriend were expecting a baby and there was no way they could fix this mobile home up before the baby comes so they decided to sell it.  Previously on the phone I asked her what she had to have for it and she said "well I at least need enough to pay the taxes" sooooooooo maybe like $700-800.  I about fell over, I first thought no way she only wants $700-800 for a 1995 16x80, I must of heard her wrong.  But after looking at it and talking to her she confirmed that she would take $700 for it.  So I gave her a deposit in the form of a check and told her I would call the county on Monday and get the taxes that were due and then meet with her to get my check back and I will pay her cash for what the difference between the selling price and taxes.  The rest of the weekend all I could think was "man I sure hope this goes through and I can't believe this is a 1995 and only $700".  Sure enough Monday came and I called the county, got the tax info and called the seller and met with her.  I ended up giving her $131 because the 2nd half of 2013 was due and then prorated 2014 taxes which has to be paid when I transfer title which ended up being 569.00.  After it was all said and done, she was very happy that I was able to buy this from her so her didn't have to worry about paying lot rent of taking the mobile home to the dump or whatever.  

So in the end I got an awesome deal of this mobile home and the seller was happy that I took it from her.  You always hear on BP of people getting deals on houses and such and the sellers are grateful that you took care of their problem for them by buying their home.  It is a win win situation.  This is a prime example of that situation with a mobile home.  

So my plan is to sheetrock the inside walls in the living room and dining room and put in some new flooring and some cabinets. I know I will have money into it but no where near what it is worth. Tax assessment on it is $22K. Sounds real good to sell it and make the cash but my main purpose is to buy it and hold it for now. Something like this should rent here for $750-850 and lot rent is $200. Renters pay utils also. Should work out ok. So in the end it pays to keep watching for decent deals. It is not a SFH like I would like to buy but the total investment is small and the rental returns are huge compared to the investment. You would have to buy a 100K and over SFH for the same return That's why I thought MH's might be the way to go.

If you have read this whole post, thanks for staying and reading.  It was shortened up a little but thought maybe some new people like me would read it and see there is always a good deal to be had.  Just takes time and patience.  Just keep looking.  Thanks again to BP for all the great info and for all the great people on here this site.

Mark,

That is a really fantastic deal you got.  I'd be very excited!

I agree that that's a great rental cash flow for such a small upfront investment. 

Great post !! Congrats

Mark,

 I've just joined BP about a week ago and I'm currently looking for relatively small investments, which is how I found your post. Even though its a year overdue, congratulations on the MH investment! 

Where's a good website to find a mobile home for sale? Not the land just the mobile home.

@John Turner As an update, I still have the mobile in the park.  It looks great.  Ended up redoing most of the inside but in the end it turned out great.  Thought about selling it as it could bring more than I thought but still plan to keep it and keep it rented out.  Gross is over $600 so I can't complain.  Picked up 3 others in the meantime and have them rented as well and working on a few more deal and maybe a small park.  I need to create a blog or put up some before and after pictures somewhere.  

what a great story, thanks for the update, hearing numbers on the others would not be a waste to all of us who read if you do not mind. and if they are in the same area/park or not. 

Originally posted by @Crystal H. :

Where's a good website to find a mobile home for sale? Not the land just the mobile home.

 Craigslist!

@Crystal H.

Craigslist is common and very good. 

Also MHVillage.com and MHBay.com work too, just not as well as CL.

We find many of our mobile home deals by doing 2 things...

1 - Driving parks and finding FSBO (for sale by owner) signs.
     Some sellers don't advertise, just put up a sign so would never see it on Craigslist.

2 - Meeting with park managers, building a relationship and asking them to call you when they have a unit they don't want to mess with.

We are in Arizona for 3 months (snow birding) and a park manager called me last week with not 1 but 2 potential deals. Already made the calls to set thing in motion. I have a couple associates in the area who will go look at them for me.

While I'm on vacation. How cool is that?

Have fun!

Absolutely great posting, Mark. 

Hopefully this is the first of many MHs for you. :) Great ambition thus far. Keep up the great work. 

I thought you brought up a lot of really good and subtle points, in addition to your unyielding determination. I figured I would list a couple below in case anyone missed them.

1. In almost all real estate investing you are not looking for a motivated home, you are looking for a motivated seller. From this point a deal may not be far away.

2. You experienced a seller really needing your help because there were few other perceived options for her to sell quickly. As an investor that also invests in MHs you will be able to help the mobile home segment of society that most other investors ignore. At this moment in time (2016) there are still not many active MH investors in most markets. 

Thanks again for posting.

Talk soon,
John Fedro

@Christopher Abernathy The others are not that great of a story as this one was but here goes.  My primary purpose for these are for rental purposes.  I have another 97 16x80 3bed 2 bath that I picked up about a month or so after this one.  I have about 15K into it and it has been rented for a year grossing $500.  Still needs some work. Could sell for maybe low 20's.  Then at the end of Dec. 2014 another month or so after this I bought a 1999 28x60 double wide on a basement on an acre of land..  Picked that up for a deal under $40k.  It was a foreclosure and had water in the basement due to no power to the sump pump and 4 inches of rain the spring before.  Water was gone when we bought it but the basement was ruined.  We gutted it all out and it is open now.  Been too busy to do much with it down stairs but the upstairs is fine.  The home itself is having new carpets and cabinets in it and painting.  I actually co own it with my sister and she is going to live there for now as she moved back from TX.  But we plan to rent it down the road for somewhere in the $1000-1100 range or sell it close to or over $100K.  Meanwhile she will pay half the rent cost.  In the end it was a great investment.  Last summer I bought a 2003 14x56 home at a sheriff sale.  It was bought without seeing inside and let me tell you it was a mess.  A hoarder lived there and she kept everything including the dog poop.  Yes that is correct, dog poop and papers piled 3 ft high in a pile in the back room.  It was disgusting to say the least.  The long and short of it though is it was cleaned, painted, new flooring and cabinets.  Bought for under $4K, put maybe $3-4K into it and got it rented out for about $425 gross.  It is actually about 15 mins outside where the others are and that is why the cheaper rent.  Home could sell for $15-20K.  Just bought another last week, a 94 16x80 3 bed 2bath shingled roof.  Nice looking outside.  Inside needs work.  The guy wanted 10K for it but after about a month he just needed out as he bought it for $6500 and put some work into the painting the outside and doing some work inside.  So I bought it from him for what he paid minus some back lot rent he owed and also some taxes for the 2016 payable 2017.  So in the end it was close to $6K that I got it for.  With a little work it will turn into another decent buy.  I can't rent it where it sits as the park won't allow so I might move it to the same park as the one from my post and rent it  or fix and sell it.  Not sure yet.  

So as you can see some decent deals and some not.  But overall that is what has happened since this deal in the last year.  Looking at a small park right now but not sure it is worth it.  It is hard to determine if it will work or not.  So it has been a busy year for me and I hope it keep going.  Happy investing.

Great post! My husband and I are looking into mobile home now, especially since we are kind of new to income properties. It will be a great way to get some leg in the game and build our landlording experience. BP has definitely been a huge benefit to educating and just getting real up to date and honest information from real people. 

Check out propertyinvestorsconnect.com, a new online platform for real estate investors to network, blog and post events to other members, and share stories in the forums. 

Join the Largest Real Estate Investing Community

Basic membership is free, forever.