I have a potential deal with a local park owner for a 73 double wide. It would be my first time working with a mobile home and was wondering what sorts of things would be your conditions to take it on.
Physical condition, park fees, title condition, etc.
I'm actually fairly excited about this deal if I can make it work.
Homes in parks present a bunch of problems. Read past posts here on why not to do deals in parks.
- does the home come with back lot rent?
- will you owe lot rent from day one while you fix it up and market it? You could be oweing $300/mo while you fix up and market. You'll not make money in the first year easily. Free to get, $10k++ to fix up, $1200 lot rent (3 months) to fix and market, then your paultry positive cash flow above lot rent and setting aside reserves for damage and turn over.
- 1973 is VERY old. Have you seen the inside?
- Will you own the septic system it sits on and the maint?
- These older homes where plumbed with CPVC or PVC. Which get brittle and need replacing. PEX the best material for plumbing in mobiles is more recent.
- A long line of ifs for me to take a few home in a park.
- Will the manager let you manage your own rental? Will he let you sell it? Meaning if you bring a candidate will he approve them quickly. He may just want you to fix it up, then not approve your applicants. Forcing you to give back the fixed up home. You think this sounds preditory and not possible? Parks and managers are an unbelievable bunch when they go bad. You need to be very very sure your effots and money will not be wasted.
I guess there should have been more detail in my post. I am working the deal out to rehab the home for resale.
In terms of how things work out with the manager are there protections I can put in place for myself for the resale or does it really come down to the management of the park?
I don't think I would take a 1973 mobile home in a park. That is really old. Curt's analysis is spot on. If it needs any substantial work at all forget it. and I don't see how a 1973 doesn't need substantial work. If you need a roof, HVAC, paint+carpet you're probably losing money already, and that is before eating the lot rent.
(919)628‑0742 | http://www.rdupropertysolutions.com
I would consider it. Can you get photos of the home? Some homes are just ...too far gone to bother- but you never know. I did a 1978 that had had a LOT of updates done to it over the years so it was in fantastic shape. The hot water, plumbing, roof...had all been done.
1976 is kind of the golden year though when they standardized building requirements for them. But if its in a good, cheap park- easily marketed...wont be SUPER hard to find a seller (you wont be stuck with it) Worth looking into.
See if you can look on MLS as a starting point for what any other homes in the park haev sold for recently on MLS. You may see what some older homes have sold for and in what conditions. Have you seen the home?
Older mobiles do have PVC, or in some cases 3/8 copper lines.
Anybody can solder but can you do it right next to an old tub/shower that lights on fire when you even get close with a flame?
The other problem can be black mold. And you won't see it in a mobile until you start tearing things apart. Then it gets ugly.
First of all - nothing is ever free. There's a catch somewhere. If there was no catch, the park owner would take the unit.
Mobile homes are different in that they are not always "real estate". They can be, but they always start as personal property - it's a vehicle with a VIN, not a parcel ID. Often times it can be converted to real property, however you then start paying real estate taxes instead of property tax, which is usually more expensive.
My experience is that any park I would feel comfortable doing a deal in will not allow rentals (their way of preserving the quality of the park with some pride of ownership) - in that case it would be doing an asset flip, or a seller financing the asset. If they do allow rentals I probably wouldn't deal with it.
The rehab of a mobile is slightly different than a house - it's usually not on a foundation and you're dealing with different materials, but overall there's a lot of similar aspects. You're still getting your supplies from home depot...
If it's in okay shape, there's no back rent or crazy fees that come with the free unit, and if the park isn't a total dive, and the monthly fees are reasonable, and it's not haunted or something crazy like that, I'd seriously consider it.
could be a great opportunity. Like the others said, get the details of costs for lot rent and repairs. See how much you could sell or rent it for.
I have 8 rentals in a mobile home park and the park is quite nice, so I disagree with those who say only lowlife parks allow rentals. In fact, I've been told I could rent homes in some of the nicest parks in my area. So, a lot of the negativity is hearsay that gets passed around
Not discounting those here who have had bad experiences. But all types of investing has it's downsides and failures
@Natalie Kolodij - I was not able to go look at it and the park owner is adamant about removing it from the park so there isn't much I can do. In my area of Colorado there really isn't a cheap park. Lot rents run 500+ minimum and are usually at full capacity. I am going to keep an eye out for others as I continue forward.
@Mike Baker - Mold was a concern of mine with the home from the pictures. I had some roof leak problems and it was hard to tell where it had gotten into.
@Blair Poelman - I was going to work with the park owner on the logistics in terms of what was still owed. The park is a mid range in terms of ownership. In the city it is 1 of 3 parks and definitely is in the middle of the pack in terms of quality.
@Leslie A. - Personally for me I couldn't do mobile rentals or at least that's how I feel right now. I'd much rather rehab them and do a seller finance on them. Not all park owners are bad, but I would have issues knowing that they could change their mind on terms. Plus lot rents here are getting ridiculous and aren't slowing down. Everyone from Boulder is getting pushed out of the "Bubble" and it's shooting up prices in the surrounding area.
it needs to be removed from the park????
Ya, I'd pass on that.
There are 10+ free mobiles on CL here at any given time to be moved. It costs too much and if its older most movers won't do it.
I never move them.
I'd look at it. I have done several older than 1976.
In addition to plumbing - Aluminum wiring is in most.
In my area, you must meet code requirements for older than 1976, in order to sell:
1 - Egress windows in bedrooms.
2 - Sheetrock around heater and hot water heater compartments. Also within 6 inches of open cook areas = cooktop and exhaust vent. Ovens are enclosed so exempt.
3 - All plugs and switches must be replaced with certified aluminum rated
OR needs a non corrosive grease (available at any Home Depot, Lowe's, etc.) on ALL plugs, switches, light connectors. (If you hire it out it's quicker to put new.)
This can run several hundred to several thousand $.
Also if it's free from the park ALWAYS ask for rent moratorium until sold. Like mentioned above if it were a screamin' deal the manager/owner would likely do it themselves.
Someone correct me here, but if it's older than 1976 the possibility exists for asbestos insulation. So I was told anyway. Most parks around here in Oklahoma have an age limit on homes. The park might just be wanting to move it out to update the overall look of the park. There might be nothing wrong with it other than its age. You just never know, until you know...
I met guy who got an old mobile for free and let the local volunteer fire department burn it to the ground for practice. They gave him some receipt for his donation and he was able to use that on his taxes somehow. I thought that was clever, but not sure if his story was BS.
Jeffrey Vandagriff, Razor Box Containers, LLC - Owner
@Natalie Kolodij - There was no plan for me to actually move it. I was working on convincing the owner to let it stay in place.
Most areas will not allow older than 1976 to be moved. Most cities/counties won't give a permit to move that vintage. Haulers can't legally move them. So leaving them in the park is the only option.
One question I always ask the Park Manager (PM) is 'can the unit stay in the park?' Sometimes as mentioned, they want to upgrade the park so will give it to someone to move.
Just double check.
Also I'd steer clear of them unless you're comfortable with them. I'd recommend to do at least 5 or 6 newer ones to get a feel for the business before venturing into deeper waters.
Good luck with it and....
You must be a BiggerPockets member to post on the forums
Join the world's largest, most open Real Estate Investing Community online, 100% free forever!