I have a chance to buy a single wide 1970s mobile home for a few hundred dollars. It's in a park, has some plumbing and floor issues needing fixed. I am new to investing and curious as to what strategies could work with a deal like this, or if it is even worth it?
@Alex Elliott - I don't really deal with mobile homes, but keep in mind that in a mobile home park, you'd only be buying the trailer, not necessarily the property or "lot" that it sits on. Most parks have "lot rent" that is a few hundred dollars per month, and may or may not include utilities.
Be careful that your seller isn't giving away their mobile home just so they can get out of their lot rent (and saddle you with it instead).
I'm not a mobile home investor, but I would ask a few questions.
1) What are the value of fixed up mobile homes there? In lower end price points, it's not uncommon that even regarding dirt cheap properties, the required repairs would force you to rehab out all the equity.
2) Do you plan to flip or hold? And if you want to hold, does the park even allow you to rent?
look up "john fedro". Make sure you know what the park will and won't allow. :-). Good luck!
I do buy and hold mobile homes, and they can be very good investments. But you have to, first, find out if the park allows subletting. Or maybe you're planning to flip it? If the latter, you'll need to know the laws around carrying back (few lenders will lend on old mobiles).
In either case, you'll need to run some numbers to determine the value of this investment. Dawn is right on in recommending that you study everything John Fedro puts out. Here's his website:
thanks alot everyone, it is a family member's home and she is moving in with her sister nearby. the lot rent is 75$ a month, it's not in a "park" exactly, but similar circumstance. I was thinking about fixing it up myself and flipping it, or renting to own it. I will check out John Fedro's site, again thanks a bunch.
I would do some checking. Wherever the home sits, check to make sure you can rent it out once your done. If you can rent it then mobile homes can be a decent way to get started. I have a few in parks that allow you to rent out. You make a cent cash flow on them as well. You mention it is a 70's model. If the overall condition is still decent you might be able to have it work well for you. Floors are very common problem with mobile homes. Just cut it out and patch it with new. Plumbing should not be too much of an issue, most things can be fixed fairly easy. You say lot rent is $75 a month, that sounds real low but that is a good thing for you. What do the rents look like for your area for the home? If you have a low enough invested you could rent it out and have it paid back quick then the rest if cash flow. You could flip the home as well, I thought about it on some of mine but I would rather cash flow and sell down the road. If your at all thinking about selling on payments or the like I would research the Dodd Frank and Safe acts. Legally selling that way now is an issue. Something you should definitely consider. If your renting then there is nothing to worry about. Good luck on your ventures.
I would do it.
Older than 1976 (when building codes were standardized for mobile homes) can have aluminum wiring and some other items that may need to be addressed, depending on building code requirements in your area.
For instance, some areas require wiring pigtail terminals rated for aluminum so it won't corrode and possibly start a fire.
May need sheetrock surrounding heater, hot water heater, cooktop and stove.
May need egress (exit) windows in bedrooms.
Easy to check with local contractor, handyman or city/county planning. Caution: asking planning dept may generate questions and permit requests.
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