From an investment perspective, can it be profitable to invest in homes substantially greater than $5k? It seems that an investment costing approximately $5k is the max standard among MH investors to make a good ROI.
I recently came across a MH that is FSBO. It was manufactured in 1983, but it's very well kept. It has also had some upgrading throughout, and a new AC system installed. The home is nestled in a small tree lined family park, which also happens to be very well kept. Overall, it's a hidden gem. The owner is asking $27k. The lot rent is $295 per month (not bad!)
In my mind, this looks like a place that I would consider buying (if I had the means). At $27k, I can only think of making some minor upgrades then selling it for about $45k. The only other strategy I can think of, would be to simply rent it indefinitely. According to information posted by the owner, they estimate a value of $30k. According to Zillow, recent comparables are about $70k. If I choose to rent, then the average rent for such a MH would be about $795 (According to rentometer)
Not sure if I am running on ambition and/or emotion, but I am thinking that there could be some potential.
Any thought’s or suggestions would be appreciated.
@Orlando Paz - if market rent is $795 and current rent is $295, you might be missing something important. I don't know what type of research you did, but I do know the two sites you listed tend to have wild inaccuracies (Zillow more so than rentometer) and that they were not designed for MH applications so numbers could be skewed.
When looking at comps (both rent and sale) are you absolutely sure the numbers are based off of comparable MHs?
@Michael Seeker The $295 is for the lot rent alone, not including the purchase of the MH. I'm basing the potential to buy and rent the MH, with the local comparable rents. So I am thinking that if I purchase this home, I could probably rent it indefinitely at market rent. In this case, approximately $795 or more per month.
If I chose to buy/sell, I could probably do some lite rehab then sell for about $45k.
is this a double wide or a single word you're looking at for this price
@Orlando Paz I would definitely check with the park about rentals. Many do not allow homes to be rented except thru the park itself. I know of some that have to approve your buyer before you can even sell your own personal home. Good Luck
If you decide to purchase the home, just be sure you check everything. Older homes tend to have particle board. It can be repaired but costly for the long-term.
Also, check the plumbing. If you have the "grey pipe" (I did a write-up on this awhile back), you'll have to replace over the years. There was a recall on this material which is why it's no longer used.
Everything can be fixed. It just takes time and money. If you have a team of contractors who can help, it will make things much easier for you. With the amount of fix up work involved in this industry, this is what inspired me to write my last book on the subject.
Best of luck!
I want to be rent-to-own ready for 6K or less. Homes clear 300-400/month over park lot rent.
I'm getting older homes, 15-30 years.
There are just so many things that can go wrong with a mobile home deal (at least with older homes and my renter pool). I want to be clear on the deal in 12-18 months.