Analyze this! Just went to see what I thought would be a turn-key
Ok, I just went out to look at my first potential deal. Its a 3/2, 1,280 square foot single-wide MH, 1999 Fleetwood. The title is free and clear according to the owner. Its been on the market (meaning Zillow) since June. There is no real estate agent working this property. The owners have already moved 10 hours away but did not finish some cosmetic renovations to the home prior to moving out. They are motivated, asking $20K and willing to negotiate. The state taxes of ~$350 are (if I remember correctly) due in December for 2016 and she said she really doesn't want to pay those, another reason for her motivation to sell. There are paint cans and trim pieces piled up in the living room because the seller is in the middle of completing that project. She says is just two hours worth of work but I tend to disagree after looking at the existing trim in the house, all the trim from the floor to the ceiling needs an overhaul to look new again.
In the five years they lived in the home the owners replaced or renovated the following:
AC, dishwasher, windows (double paned with blinds in between panes, can open to reach the blinds), flooring (throughout was very nice but I'd replace the peel-n-stick with laminate so it would be laminate throughout), sheetrock, texture, and paint throughout, ceiling fans and light fixtures throughout, sinks in both bathrooms, chain link fence dog run added, and a storage shed.
Other positives: I talked to neighbors and they are very happy living there, there is a beautiful and big rec center, gym, kids playground, monthly potlucks, people wave to each other as they drive by, there's a craft group that meets, etc. There are really nice homes in this park and not so nice ones that need a little work. Large trees. All the homes had skirting and seemed occupied. Several homes looked less than five years old. The neighbor who let me in said that the park maintains the trees. I was very concerned about a large branch that went right over the master bedroom area of the house. I saw lawn crews next to the rec center. Most lawns were well maintained. No pets over 25 lbs. All owners and tenants are subject to a background check. I have yet to talk to the management about renting options. Manager lives on-site.
Ok, those are the things that are positive about the home and community.
Now for the things I feel would need to be added/completed/renovated before ready for sale or rent:
New gutters - ~$800
Laminate flooring in kitchen and bathrooms to match entire house - estimated $500
Stove/Oven - ~$600
Fridge - $700
W/D (optional) - $600
Window in master bedroom - $200
Ceiling fan in master bedroom - $200
Kitchen sink - $200
Redo all door trim/paint all doors/rehang, replace or adjust a few doors - ~$500 (just a guess)
Add small door to water heater closet ~$100
New master bathtub - ~$800
3-4 panels of skirting need to be replaced - $ (no idea) but estimating $200
Ramp/Stairs/Deck leading to front door needs to be replaced - $1000
Landscaping in front - $200
Cleaning entire home to make ready for sale - $200
I'd like to get a foundation specialist to look under the home (free)
Roofing specialist to talk to me about the metal roof (free)
I need to ask her about the furnace (forced air) and its age and working condition.
I need to factor in about three months of lot rent (at $375 per month) for the renovations to be completed - $1125
And I'd like to have $1000 set aside for unexpected rehab expenses
GRAND TOTAL = $8925
This would mean that our negotiations to the seller would start at $11,075.
First, are these figures anywhere close to realistic?
Next, if I do some aggressive marketing for selling it and get a real estate agent to list it on the MLS, would I have a greater chance of getting it sold? My assumption is that its truly not move-in ready and that is why its been for sale for so long. It doesn't even have a stove and oven. I bet that most people looking to move are also looking for a move-in ready house, not a semi-move-in ready house.
The market value is $20,000.
What should be my asking price if I make all the renovations?
How long should it be on the market before I decide to try to screen for tenants?
What should I charge for monthly rent? Deposit?
Where do I start looking for contractors who work on MHs?
If I decide to go forward with purchasing the property, other than a Bill of Sale, what documents do I need? I've seen people mention an SOL. What is that for and why do I need it? I'm keeping the property where it is, not moving it.
What else do I need to do? I'm hoping to make this deal to get the first one over with and to create a net of at least 10% so I can put money into learning more about MH Investing. (I'm leaning toward the Mobile Home Formula course.)
Whew, that was a long post. Thanks for making it this far. I appreciate your input.