As luck would have it, I lost my job a week ago. There are some employment possibilities on the horizon, but nothing sure yet. I feel like my investing ambitions, have been put on hold. My focus has been on looking for work, and working my part time job.
After putting some thought into my circumstances, the only two solutions would be to invest in a small fixer upper residential or look into investing in a free mobile home. With a small rehab, I would have to look into using hard money. Right now such a strategy may not be the best approach. It just seems extremely risky and expensive. I then went on Craigslist, and found some free mobile homes. One of the ads shows a picture, the other does not. I have not seen the homes in person, but the one with the picture is an older 1970's home in great curb appeal (on exterior). The description says that it needs some work, and may need to have the floor replaced.
The opportunity to get the mobile home is there. I am already familiar with the park, as they had offered a free mobile home to me when I first started learning about mobile home investing. The park's rent is about $520, and it is in a 55 and over community. For me, these are two red flags I try to avoid. In my circumstances though, it seems like an attractive opportunity. I know from past experience that the park has offered to waive the monthly lot rent for up to 4 months (with a possibility of 6 months waive).
My dilemma is on what should I do???... Even if I got the mobile home, it still needs work (which costs money). If for some reason I still have the home after 4 to six months, then I face the possibility of lot rent. Hopefully by then, I would have a job to cover that risk. Not sure where to go with this. Any thoughts and advice would be greatly appreciated.
Sorry to hear about your job loss. I know the fear that comes with that.
I would be careful about the free mhs. It's easy to find you have to put too much into them. You're lucky if you can get free lot rent for a time.
sure, why not?
I would say go for it!
Look at your risk vs reward.....free and free...the only thing on you is to make sure you have the funds and the knowledge to put the MH back together and sell for a profit.
Sorry to hear @Orlando Paz
Good way to get into investing in mobiles.
NOTE: Older than 1976 could have some code issues that 'may' need to be resolved. 'May' because if you disclose that it 'may' have code issues you 'may' not have to fix them yourself. My state has a form we can use. Not sure about where you live.
Ping @John Fedro . He works in Florida so knows what's happening there.
First off, I regret to hear about your recent layoff. You are in good company on this website because most of us are here pursuing our own side businesses so that we will not have to rely on the income of a traditional job. Additionally, it is good to hear that you are not being a victim or blaming anyone. This layoff has happened and now you simply must move forward in the best safest way possible.
With all that said I might be the only person here who does not think you should jump into this "free home" deal. I say this to you because of your inexperience in this niche and also the "red flags" that you mentioned in your original comment. You are in a vulnerable position at the moment and I do not think it is wise to make decisions based on emotion versus logic. In this niche it is so important to know your local market, know what buyers will pay, know how many senior buyers there are, and know your exit strategy before moving forward. Based on your original posting it seems like you are taking a shot-in-the-dark because of the "free" home and lot rent. *This free home and lot rent is actually pretty common, so don't worry about missing out on this opportunity because you didn't act quick enough. There will be others I promise, likely in family parks and/or in better shape.
Without any income coming into you weekly you are taking a gamble that this free mobile home will be quick to repair, attractive to buyers, and lucrative enough to generate a nice payday or monthly income when rented or sold. Because the mobile home is in a senior community it will be a good idea to know what else is for sale in the same community and similar communities locally. When you repair and resell your investment mobile home you may be competing against other sellers depending on how they are selling and the condition of their homes. The snowbirds will be returning later this year so you will have a chance to sell to these folks when they get in.
If you do decide to move forward with your due diligence than I highly suggest you have at least two mobile home experienced handyman walk through the properties and give you an estimate on the repair work needed. In senior communities many purchasers will want the homes to be in move-in ready shape, as opposed to handyman specials.
With all of this said if the homes are good sizes (ideally 14 feet wide and good sized bedrooms) and do not need more than a few thousand dollars in work, then they may be good opportunities to purchase and resell. It is quite important that you will have this 4 to 6 months free lot rent as you describe in your original comment. This way you are not bleeding the lot rent monthly in addition to making repairs and marketing.
Everyone here respects your ambition and determination to move forward in this niche rain or shine. This "free" mobile home may be a very lucrative opportunity, however do not let the word free distract you from the goal of a real estate investor. In your area there are likely other sellers and/or parks that are confused and willing to sell their nice mobile homes for a free or next to free price. These opportunities may be more lucrative and easier to pursue than the "free" mobile home you described above. Keep in mind that because of your limited budget if you do close on this free home you will likely be limited to this one deal or two until you resell them and can move on to your next opportunity.
In short my advice is only that of one person. Everyone must do what is best for their own interest as they see fit. I highly suggest you look for new employment, start generating an income, then look for slightly newer mobile homes that need less work in family communities. It is far better to wait a little while to start and follow the path of least resistance. I hope this helps and makes sense. If you have any follow-up questions or concerns don't hesitate to reach back out.
"The Cheap Comes Out Expensive" - Author unknown.
I second @John Fedro ! Ask yourself "why is it free". Having managed a 1306 lot senior mobile community in Florida, I can tell you that all owners want is lot rent... what is on the lot tends to be an after thought. As soon as you take control of this home, you start paying lot rent (so much for free). If it is owned by one of the REITS in the area (ALL, ELS, HTA, CAL-AM, ETC), the manager is not in a position to live up to the promise of waiving lot rent (notice... didnt say they cant offer it... they just cant live up to the promise).
Replacing the floor is a pretty big job, depending on the manufacturer. Also, once you pull up the floor, you see the plumbing, frame, tie-downs, etc... which can uncover a whole new list of problems.
I would LOVE to get back into the MH business, flipping homes, but I have enough Florida Park knowledge to know that a deal too good to be real is just that (see line 1 of my post).
Feel free to shoot me a PM with the park and I may be able to provide you with some additional ammo if you decide to proceed. I have worked with well over 200 Senior parks across Florida over the past 10 years and have physically been in a heap load more than that.
Thanks for all the feedback and support. A quick update... I went to check out the home. It's from 1970, and it looks it! lol! Lot's of soft spots and uneven areas throughout. It's a 2 bedroom / 2 bath, and it needs lots of upgrades. I may save money on the actual purchase, but the cost of work involved, would bring it up substantially.
With this one, I have to say that I agree with @John Fedro and @Edward Hamill . I am thinking with my emotions, rather than a clear mind. I have an upcoming interview, I feel good about. If I get the job, then I can slowly get back into the game without worries.
Hi @Orlando Paz
I'm glad to hear about your interview.
If it were me, I'd pass. There are so many mobile homes out here in Florida for cheap, the market is very brutal. You can buy a new MB for $14K. Fixing one that is almost 40 years will most likely cost you half of that just to get it to code, and maybe more to attract buyers for resale.
And there is the monthly rent. I don't know what you're paying now, but, maybe it's cheaper for you to live there for a while, since they waive lot rent. That will give you a chance to get caught up on your bills and maybe save some small capital for making deals.
Also, you mentioned the two red flags. Depending on your age, you may not qualify to live there. Take the step and fill out the application to see if you even qualify to live there. Then move from there.
It's free for a reason: falling apart, bugs and pests inhabit, mold and other toxins, unsafe (condemnable) habitation, etc. If these aren't an issue, then maybe it might be worth investigating further.
However, once there, you can always invest in other MBs that become available to invest and resell. to me, it's a hard market and very little reward vs risks. However, if the park manager knows of your investment schtick, it might become a little gold mine for you. And her, if you fix and flip. All she cares about is occupancy. The more the park is filled, the better.
@John Hamilton - Thanks John. I'm glad to be working. With time, I look forward to the day that I won't have to worry about the security of a job.
I actually went to see the mobile home, and honestly did not care for it. Aside from it being a very old and beat down MH, it also had a roof that had once leaked. As a result, the floors were all warped and soft in various places. The repair was going to be more than the trouble of fixing it up.
@Orlando Paz If you keep at it, you will find the next deal. Sometimes it's best to walk away.
You and I have the same aspirations.
Good decision @Orlando Paz
As mentioned above, keep at it and you'll find a great deal soon.
free ain't free.
You need a lot more experience before jumping into this pool. Get a paycheck first, then bank a little $ or sell some stuff for seed $.
Check out the articles and forum at mobilehomerepair.com.