Flipping mobile homes - what am I missing?

Mobile Home Park Investing
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Flipping mobile homes - what am I missing?

Justin R.
Developer · San Diego, CA · Member since 2015 · 1k+ posts · 1k+ votes

First, I plead ignorance other than everything I can read about mobile homes on BiggerPockets and mobilehomeinvesting.net in about 3 hours time.  :)

I own and manage a modest portfolio of MFR properties and have been involved in a couple SFR flips, so I know those games. But, I've never done anything with mobile homes.

Locally, a 4bd/2ba 1990s double wide in a central, preferred park on a spot with, say, a 2000sqft back yard, will sell for somewhere in the $120k - $150k range.  Brand new ones are listed for about $170k.

We're contemplating a flip and I'm scratching my head since almost everything online talks about buying $5k MHs and reselling for $15k and carrying the paper.  I don't see much (any?) conversation about the $130k price range.

Summary is: $50k purchase from a distressed seller, $20k in work (imagine pets and chain smoking for 25 years ... yeah), multiple comps of the same vintage within 6 months in the same park above $120k.

I'm trying to find the gotchas here.  What am I missing?

FWIW, the manager seems to want to be sure we're moving into the home rather than flipping it.  How important is park management's opinion of what's going on (answer: more than I'd like, I suspect)?

THANK YOU BP Nation!

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Bill Neves
Flipper/Rehabber · Vancouver, WA · Member since 2013 · 328 posts · 252 votes
10y

@Scott Schultz 

Just a different business model.

Correct - mobile homes are depreciating assets. So the question for an investor is "do I want to make money or play the stick built game?" One does not always equal the other.

I used to train people in stick built real estate deals. Worked for the Robert Kiyosaki Rich Dad Real Estate folks, when it was called Russ Whitney. Funny - you mentioned him. I played in that arena for over 10 years and did 160 stick built deals. Made great money... Until the market crashed and LOTS of investors got crushed.

Fortunately, I didn't get hurt but stopped for 3 years. Attempted to get back at it in 2012. No traction. Auctions, many times, are over run with newbies who have 401k money and frequently overpay. Short sales are difficult compared to 2005-2009. Lease options are not what they used to be. Flips are great but many MLS listings are over run with investors out bidding each other to get the deal.

Tried one mobile on a whim and haven't looked back. Almost 40 now. No competition thanks to the stick built 'fact' that mobiles depreciate and are a waste of time. We love that.

10% of all housing... but a waste of time.

@Justin R. is in San Diego, California. There are lots of depreciating mobile homes that sell in the several hundred $ thousand range and more. I've seen 'mobile homes' in parks on the Calif coast for $1 mil and more. Brad Pitt, movie guy, has one worth over $1 mil.

Correct they don't appreciate... but VALUE is different than appreciation. 

Most investors want income and cash flow. But need credit, a pile of cash or hard money to do most deals. And most investors don't have those readily available. 

The monthly cash flow on rentals after repairs is a joke many times. We see nice pay days and several mobiles we've done are $300-$500/mo cash flow with no maintenance. Most stick built investors don't see that. Some, but not most.

So now I show folks that you can do stick built if you have those tools mentioned above or do mobile homes and both can make good to great money.

----------------------

Just yesterday a 'recovering' stick built investor called me. She and her husband invested $50k cash into a 60 day 'quick flip' to make $20k with 2 other investors. A FULL YEAR later they made the 2nd sale. 1st sale fell out, after 12 months of rehab and sales attempts. So after many nights of lost sleep... They got their $50k back and $15k net. 

Now, $15k net is still 30% annual return on the money which is a great return. But wasn't the 60 day 'quick flip' for $20k net they thought they were doing with their experienced stick built investor friends.

She called because she just got her 2nd mobile home deal in 2 months. Working on fix up on the 1st one. Both should net $10-15k each. And in 45 days tops each. And on to more.

Just sayin'!

We love that stick built investors have that opinion. No competition.

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  • Jeffrey H.
    Houston, TX · Member since 2015 · 512 posts · 338 votes
    10y

    I will never understand California real estate.  Maybe @John Fedro knows a high end Lonnie Dealer in Cali...

    0Reply
  • John FedroPro Member
    Investor · Austin, TX · Member since 2009 · 410 posts · 295 votes
    10y

    Hi Justin,

    Thanks for reaching out. I'm curious to see what example folks will talk about in this thread. Your question is not uncommon and very valid.

    You are correct in that much of my material is focused on lower-end housing that is more affordable to the masses. With that said there is considerable profit in what you are discussing as well.

    Whether you're fast-turning a home for a $3,500 profit or a $35,000 profit, it is nice to have the influx of cash. In many areas of the country there are a lack of cash buyers or bank approved buyers at any one given moment, making reselling for cash a competitive market place with $5,000+ cash being a good profit.

    What I believe you are discussing is the higher-end manufactured home marketplace. These buyers typically desire modern and move-in ready homes for their money. Typically 2 things can cause a manufactured home to be worth $60,000+. Either the home is newer and therfore simply worth more or the location of the home is driving the price up and up. In very high-demand areas (such as San Diego, and many other places as well) a "normal" mobile home worth under $20,000 (in most areas of the US) can be worth 5x that amount simply because of the location. Additionally the lot rent will be $800+ monthly.

    You touched on the main issue above. Are local comps selling, and are they selling fast?

    Regardless if you are fast-turning a mobile home in New Jersey or California, the demand for buyers must be verified and substantial.

    With us all knowing that the real estate market could change at any moment, it is a math problem when it comes to fast turning or flipping a mobile home for all-cash or bank financing. Know your repair costs and beware of holding costs, however now is a good time of the year to resell soon. If the comps in the same park are as strong as you say then the risk is certainly reduced.

    I hope this all helps and makes sense some. If you have any follow up questions or concerns don't hesitate to comment back for us all to help. If you move forward with the deal please keep us all in the loop.

    Thanks for the shout-out, Jeffery.

    All the best,
    John Fedro

    Podcast Guest on Show #75
    2Reply
  • Kevin FoxPro Member
    Real Estate Agent · San Diego, CA · Member since 2014 · 1k+ posts · 635 votes
    10y

    Hey @Justin R.

    Shoot me a text!  I actually know a good number of the mobile home park owners in SD. Let me know which park it's in and I can advise you on whether its a good idea to go against management lol.

    1Reply
  • Dan H.Pro Member
    Investor · Poway, CA · Member since 2015 · 7k+ posts · 8k+ votes
    10y

    I have seen some below market deals on trailers but because it is not in my area of expertise I have never pursued any of them.  So keep us informed of what you decide and how it works out.  

    Good luck

    2Reply
  • Dan H.Pro Member
    Investor · Poway, CA · Member since 2015 · 7k+ posts · 8k+ votes
    10y

    I had a thought on the landlord.  What could he have to complain about if you are rehabbing a trailer.  A trailer that may not be the best will be upgraded.  It will quickly be sold to a tenant that wants a nice trailer.  The quality of the trailer park would increase.  

    So I suspect the landlord was asking because he does not desire non-owner occupied and not because he has an issue with someone quickly rehabbing and quickly selling (I.e. Flipping). 

    2Reply
  • Jeffrey H.
    Houston, TX · Member since 2015 · 512 posts · 338 votes
    10y

    Be aware of Park rules prior to Purchase.  Many MHP's have rules that they have to approve the tenant / buyer prior to occupancy - they don't want violent felons with 8 pit bulls in the Parks and screen them just like any other prudent person.

    Depending on the extent of the rehab you can also sometimes get the Park Owner to defer or reduce the lot rent for a couple months while you make improvements...they have a vested interest in seeing the exterior of the homes improved and should invest to make that happen.

    Let us know how this works out - I haven't seen anyone flipping high end homes in markets like yours and would be an interesting read.

    1Reply
  • Scott Schultz
    Rental Property Investor · West Bend, WI · Member since 2015 · 931 posts · 598 votes
    10y

    I never understood investing in a depreciating asset, or as Kiyosaki would call it a Liability, Manufactured homes do not appreciate, the lot may, but the house will not, I dont care what you do to it. it nothing more than a fixed location RV Licensed at the DMV, there are very few Lone products for end users, and the ones that do exist require bug don payments. We have a lot of them in my area, and on its own lot, they bring 20-40% less than a similar sized Stick Built or Modular Home, I was involved as a broker, for someone that flipped one, the margins were tight, an buyers were slim, sorry to be Negative on them, just my experience. we see them here in parks from $500 to about $20K for a really nice double wide, not much money to be made there.

    0Reply
  • Andy Beis
    Investor · Poplar Bluff, MO · Member since 2014 · 20 posts · 7 votes
    10y

    I believe it's all a matter of location. We purchased one in the Florida Keys and rent it out. It preforms well. Will it have the same up side as a stick home from an appreciation stance no but it can still make sense.  I think the work better in rental setting than flips but it all depends on your market.

    0Reply
  • Bruce May
    Lender · San Diego, CA · Member since 2011 · 664 posts · 231 votes
    10y

    @Justin R. thanks for bringing this up because I've had the same thoughts as well over the past year or so. At first I started looking at buying these low priced units and keeping them as rentals and quickly found that most parks in our area will not allow it. I found a few that had homes that were rentals but they were grandfathered in under previous park rules. It seems the park owners and managers keep a very tight reign on their park operations around here.

    That said, I know of one instance wherein the local guru teachers flipped one in San Marcos and I suspect they've done others as well. You're biggest hurdle will be getting approved by the manager to "move into" the park. If you get past that hurdle then I think you would have success. The concerns I would keep in mind are the end buyer financing options and lot rents. Some rents on the coast are as high as $1,500 month.

    I have a possible solution for you, one which I have considered doing. Buy the home from the current owner but don't transfer ownership into your name. Once you own it, go in and do the remodel and when you're done list it for sale. You have all the paperwork and control the home and you are able to sidestep the manager as long as the lot rent is still paid. Not sure if this would work and I'd love to hear other investor's thoughts about this.

    My final thought here, and it echoes those above, is that if you do this, it would be a good blog to follow to see how it works out for you.

    1Reply
  • Jeffrey H.
    Houston, TX · Member since 2015 · 512 posts · 338 votes
    10y

    Another way around this problem is to find a Park with empty pads - they may be willing to work with you if you bring the home in and remodel it to their liking.  Parks love it when tenants bring their own home in....

    0Reply
  • Bill Neves
    Flipper/Rehabber · Vancouver, WA · Member since 2013 · 328 posts · 252 votes
    10y

    @Scott Schultz 

    Just a different business model.

    Correct - mobile homes are depreciating assets. So the question for an investor is "do I want to make money or play the stick built game?" One does not always equal the other.

    I used to train people in stick built real estate deals. Worked for the Robert Kiyosaki Rich Dad Real Estate folks, when it was called Russ Whitney. Funny - you mentioned him. I played in that arena for over 10 years and did 160 stick built deals. Made great money... Until the market crashed and LOTS of investors got crushed.

    Fortunately, I didn't get hurt but stopped for 3 years. Attempted to get back at it in 2012. No traction. Auctions, many times, are over run with newbies who have 401k money and frequently overpay. Short sales are difficult compared to 2005-2009. Lease options are not what they used to be. Flips are great but many MLS listings are over run with investors out bidding each other to get the deal.

    Tried one mobile on a whim and haven't looked back. Almost 40 now. No competition thanks to the stick built 'fact' that mobiles depreciate and are a waste of time. We love that.

    10% of all housing... but a waste of time.

    @Justin R. is in San Diego, California. There are lots of depreciating mobile homes that sell in the several hundred $ thousand range and more. I've seen 'mobile homes' in parks on the Calif coast for $1 mil and more. Brad Pitt, movie guy, has one worth over $1 mil.

    Correct they don't appreciate... but VALUE is different than appreciation. 

    Most investors want income and cash flow. But need credit, a pile of cash or hard money to do most deals. And most investors don't have those readily available. 

    The monthly cash flow on rentals after repairs is a joke many times. We see nice pay days and several mobiles we've done are $300-$500/mo cash flow with no maintenance. Most stick built investors don't see that. Some, but not most.

    So now I show folks that you can do stick built if you have those tools mentioned above or do mobile homes and both can make good to great money.

    ----------------------

    Just yesterday a 'recovering' stick built investor called me. She and her husband invested $50k cash into a 60 day 'quick flip' to make $20k with 2 other investors. A FULL YEAR later they made the 2nd sale. 1st sale fell out, after 12 months of rehab and sales attempts. So after many nights of lost sleep... They got their $50k back and $15k net. 

    Now, $15k net is still 30% annual return on the money which is a great return. But wasn't the 60 day 'quick flip' for $20k net they thought they were doing with their experienced stick built investor friends.

    She called because she just got her 2nd mobile home deal in 2 months. Working on fix up on the 1st one. Both should net $10-15k each. And in 45 days tops each. And on to more.

    Just sayin'!

    We love that stick built investors have that opinion. No competition.

    5Reply
  • Scott Schultz
    Rental Property Investor · West Bend, WI · Member since 2015 · 931 posts · 598 votes
    10y

    Interesting model, I guess if it works in your market, In my market, I cant see it working, unless its water front, there is a huge stigma about MFD's here with o without basements, they have typically much longer days on market here. as far as rentals go, Im getting $250/mo positive based on financing purchase and rehab at 5% with a 10 year amm, and still have the upside down the road, i know thats not typical, and probably dosnt play in CA, I can see the rental return if you can get your money back out someday, my guess is where you are the Lot, and having water at the lot has god value, Im glad its working, your plan proves like NAR says "Every Market's Different"

    1Reply
  • Justin R.
    OP
    Developer · San Diego, CA · Member since 2015 · 1k+ posts · 1k+ votes
    10y

    Wow, BP Nation delivers again - great insights! I think it's crazy how different the situation is here compared to elsewhere, but I *do* see why it's like this from a supply/demand perspective. The reality is there are VERY few rental home options in this market (it's very geographically constrained) and this particular manufactured home lives like a house in an HOA - all the location benefits, much less cost.

    Going to talk with the management to be sure they have no strong objections, then will pull the trigger on this one.  Yeah for new experiences!

    One question for everyone: are there typically any protections for tenants of a MH park or can management simply give 30 days notice to force you to vacate?  Different rules in different states, I expect, but what's the industry standard?

    @John Fedro You are right on the lot rent - it's $900+ in this case.  But, it's also near the ocean and open space in a very nicely kept central location park.  The park's land is owned by the city - if it were privately owned, it would long ago have been developed into *very* expensive stick homes.  So, this feels atypical.  Thanks for validating the scenario at least isn't crazy.

    @Jeffrey H. I hadn't realized just how much power the park management holds - thanks for calling that out.  This home is definitely an eye sore, so I would hope they would *love* for someone to deal with it.  Great idea to see if they'll help on the lot rent as a way to help us solve this problem for them!

    @Bruce May Definitely will keep folks in the loop on how this turns out.  Love your suggestion on not transferring residency, but the current owner appears to be an estate and the park management knows about the problems with this one, so not likely to work here.

    One question 

    0Reply
  • Bruce May
    Lender · San Diego, CA · Member since 2011 · 664 posts · 231 votes
    10y
    Originally posted by @Justin R.:

    Wow, BP Nation delivers again - great insights! I think it's crazy how different the situation is here compared to elsewhere, but I *do* see why it's like this from a supply/demand perspective. The reality is there are VERY few rental home options in this market (it's very geographically constrained) and this particular manufactured home lives like a house in an HOA - all the location benefits, much less cost.

    Going to talk with the management to be sure they have no strong objections, then will pull the trigger on this one.  Yeah for new experiences!

    One question for everyone: are there typically any protections for tenants of a MH park or can management simply give 30 days notice to force you to vacate?  Different rules in different states, I expect, but what's the industry standard?

    @John Fedro You are right on the lot rent - it's $900+ in this case.  But, it's also near the ocean and open space in a very nicely kept central location park.  The park's land is owned by the city - if it were privately owned, it would long ago have been developed into *very* expensive stick homes.  So, this feels atypical.  Thanks for validating the scenario at least isn't crazy.

    @Jeffrey H. I hadn't realized just how much power the park management holds - thanks for calling that out.  This home is definitely an eye sore, so I would hope they would *love* for someone to deal with it.  Great idea to see if they'll help on the lot rent as a way to help us solve this problem for them!

    @Bruce May Definitely will keep folks in the loop on how this turns out.  Love your suggestion on not transferring residency, but the current owner appears to be an estate and the park management knows about the problems with this one, so not likely to work here.

    One question 

     Justin, if the city owns the land check to see what their plans are with it. I heard about a MHP in PB on the bay that is closing because the city owns the land and they are evicting everyone in the park. Don't know if that info is true or not... you know how rumors go.

    1Reply
  • Justin R.
    OP
    Developer · San Diego, CA · Member since 2015 · 1k+ posts · 1k+ votes
    10y

    @Bruce May You're right that the City is pretty much on a mission to push out MH parks - they want higher density, and they've made it really hard (non-feasible) to create new parks in the city limits, according to what I've been able to turn up and read.

    This particular park went through some rough patches with exactly this problem several years ago, but the city eventually relented and committed to keeping it a park ... at least for a long while.

    Given that this is a buy-fix-sell rapid (hopefully) transaction, this shouldn't be too big a problem.

    One interesting question is how a decreasing number of parks may change the demand for the parks that remain (perhaps elsewhere in the county or in neighboring cities around here)... 

    0Reply
  • Thomas S.
    Member since 2016 · 13k+ posts · 12k+ votes
    10y

    Knowing your market is key to the real estate business regardless of the vehicle you invest in.

    I buy and flip in a MH market that generally sees renovated mobile homes sell in the $60,000 to $80,000 range on a consistent bases. If you want to be successful you must work with the manager/owner of the community. To do otherwise is a very poor business practice. Success depends on following the process not trying to figure out how to circumvent it. Working within community rules is simply part of the business you are entering. The community manager/owner is your silent partner in every transaction you do. If one community doesn't work move on to the next. 

    Think of MHCs like a fenced yard with a very large dog. There are plenty of ways to get to the front door of the house but your choice has a major impact on the outcome. It may simply be a no go, you may chose to enter uninvited and suffer serious injury or you can make nice and actually be allowed to leave unscathed. 

    1Reply
  • Jo-Ann LapinPro Member
    Loan Officer · Tustin, CA · Member since 2015 · 3k+ posts · 713 votes
    10y

    Hi Justin. I am sure that you can purchase just the home for those prices, however the shelf life is real questionable. I have found a solid used double wide perhaps a Fleetwood used can run from $40,000 to 70,000 3 bed 2 bath or 4bed 2 bath. I hope this helps.

    [email protected]
    0Reply
  • Justin R.
    OP
    Developer · San Diego, CA · Member since 2015 · 1k+ posts · 1k+ votes
    10y
    Ok, update on this one, especially for Bruce M. and Dan Heuschele and Kevin Fox ev I don't know whether this will turn out to be a good idea or a bad one, but I'm going to pull the trigger on this one. Since I started this thread, we've gotten clear with the park management (they won't credit lot rent, but they're fine with what we're doing). Have also watched the escrow and title process (different, but it seems reasonable enough). We close next week. I hope I can lean on you all when questions come up. :) In short, I'm partnering with a contractor on thistle the I've worked with on other projects. It's also the first MH fast turn he's done, those he's done work on MHs before. Here's the numbers: 4bd, 2ba, 1200sqft private yard 1700sqft, built 1991 $48k PP $24k rehab, including basically all interior cosmetics + exterior + yard improvements Seeing comps in the park around $150k for similarly aged homes. DOM range from 15 days to about 90 days over the past 9 months. Not sure how to check on non-MLS sales as I'm still unclear exactly how MH titles get recorded (compared to permanent real property). It seems as though many of the buyers are paying cash. I'll readily admit there are plenty of things I don't understand with this, but I figure the best way to learn is.... I'll try to remember to update as things move along for anyone interested. For the record, some of the things I hope to learn include: 1. Why is this a depreciating asset if the utility is the same as it was 15 years ago. I've read some things about how MHs just use cheap materials that wear out, but everything I see - the framing, water heater, kitchen, bathrooms, and interior finishes are all the same I'd expect to see in a stick home. 2. Are we going to get killed by the lot rent when holding? LR is about $900/m, so we don't want to hold for long. That said, if you want to live in this central location, your total monthly payment is going to be way below that of a stick home ... And there's pretty nice amenities. 3. How hard will it be to sell this thing? And, how will marketing be different than a stick home?
    2Reply
  • Jeffrey H.
    Houston, TX · Member since 2015 · 512 posts · 338 votes
    10y

    If you weren't in California I would have spit out my coffee at your 24K rehab number - that's really high for most places across the country.  We use specialized mobile home repair guys to perform work at a fraction of the cost of the stick built contractors.  But with the exterior and landscaping if this is a full rehab then it could be justified.  Get multiple quotes if you have any doubt.

    Personal property always depreciates. RV's, cars, etc. These things are thrown together in a factory in 12 hours and then delivered to wherever. The materials used in most cases are cheaper - for example mobile homes from the factory do not use drywall, this is added by people ad hoc after someone plays super mario with the walls. The floors crumble because the factory uses this sawdust-like particle board that whenever it gets wet it becomes soft - this is always replaced with plywood. Lots of example of this, but yes some things are fine just like SFH.

    Your lot rent can be considered just like an interest only loan for a flip - yes it's going to sting and you will need to unload the property quickly to keep your holding costs down.

    To gauge interest and how quickly you may sell this home why not put up a test advertisement at your target price to see how many phone calls for cash buyers you get.

    Let us know how it goes - post photos, start a blog, and tell us about your experience!

    0Reply
  • Rachel H.
    San Antonio, TX · Member since 2009 · 3k+ posts · 1k+ votes
    10y

    @Justin R. Nice to hear your progress and the responses on this thread! 

    Regarding your question about why mobiles are considered depreciating assets, apart from it being separated from the land I think it mainly has to do with the way the homes are built.

    There's a large price difference between a single family home and a mobile home in general. The materials are very cheap and may not be able to withstand major weather catastrophes. 

    If you're in an area where the weather is mild, it can be OK. Though, there are times when you just can't predict the weather. I've known mobile home investors who have lost their entire portfolio due to major weather issues (i.e. hurricanes, etc). The key is to learn how to manage your risk. 

    Personally, I've been through a major natural disaster (a flood) which was deemed a national catastrophe by FEMA. The good thing is that my portfolio is spread out in other areas, not just one. Many I know just focus on one area which can be detrimental when the unexpected comes up.

    The experience caused me to learn more about mobiles and the materials they're made of due to the amount of work needed. Fixing up these homes can definitely be costly but now I have the knowledge (and the crew!) when going out to buy more homes down the road. 

    Hope that helps and give you some insight. Good luck on your deal! 

    0Reply
  • Justin R.
    OP
    Developer · San Diego, CA · Member since 2015 · 1k+ posts · 1k+ votes
    10y

    @Jeffrey H. I don't want you to lose your coffee, so I'll try to keep things tame here.  I'm partnering with the contractor on this deal (whom I've done a number of projects with), and his limited financial contribution is at the top of the capital stack.  So, my downside is pretty limited.

    You mentioned about drywall and going super mario with the walls ... do you differentiate in your comments between older MHs (prior to 1976) and newer ones?  Other than the skirt on the exterior, the fact that it's totally rectangular, and it's location, everything I see from the water heater to the cabinets to the rough plumbing to the floor joists to the showers looks like typical stick-build materials.

    Will do on the photos and update.  I don't like being way out on the edge doing something different with my $$, but like I said ... we'll see if this is a good idea or not.

    @Rachel H. Good thoughts.  We've got a pretty mild climate here.  About the worst thing we get is an occasional brutal fog rolling in off the ocean.  "Brutal," perhaps, but I'm guessing the lack of weather excitement does help these MHs hold up better than they probably would elsewhere.

    1Reply
  • Bruce May
    Lender · San Diego, CA · Member since 2011 · 664 posts · 231 votes
    10y
    Originally posted by @Justin R.:

    Ok, update on this one, especially for Bruce M. and Dan Heuschele and Kevin Fox ev

    I don't know whether this will turn out to be a good idea or a bad one, but I'm going to pull the trigger on this one. Since I started this thread, we've gotten clear with the park management (they won't credit lot rent, but they're fine with what we're doing). Have also watched the escrow and title process (different, but it seems reasonable enough). We close next week.

    I hope I can lean on you all when questions come up. :)

    In short, I'm partnering with a contractor on thistle the I've worked with on other projects. It's also the first MH fast turn he's done, those he's done work on MHs before. Here's the numbers:

    4bd, 2ba, 1200sqft private yard
    1700sqft, built 1991
    $48k PP
    $24k rehab, including basically all interior cosmetics + exterior + yard improvements

    Seeing comps in the park around $150k for similarly aged homes. DOM range from 15 days to about 90 days over the past 9 months. Not sure how to check on non-MLS sales as I'm still unclear exactly how MH titles get recorded (compared to permanent real property). It seems as though many of the buyers are paying cash.

    I'll readily admit there are plenty of things I don't understand with this, but I figure the best way to learn is....

    I'll try to remember to update as things move along for anyone interested.

    For the record, some of the things I hope to learn include:

    1. Why is this a depreciating asset if the utility is the same as it was 15 years ago. I've read some things about how MHs just use cheap materials that wear out, but everything I see - the framing, water heater, kitchen, bathrooms, and interior finishes are all the same I'd expect to see in a stick home.

    2. Are we going to get killed by the lot rent when holding? LR is about $900/m, so we don't want to hold for long. That said, if you want to live in this central location, your total monthly payment is going to be way below that of a stick home ... And there's pretty nice amenities.

    3. How hard will it be to sell this thing? And, how will marketing be different than a stick home?

     Thanks for the update Justin. And I agree that it would be good to see some before, during and after photos and occasional updates along the way. If you don't move too quickly maybe you and @Tim G. could host the next local meetup there.

    0Reply
  • Kevin FoxPro Member
    Real Estate Agent · San Diego, CA · Member since 2014 · 1k+ posts · 635 votes
    10y

    Hey @Justin R.

    Thanks for the update! Pretty glad to hear you're pulling the trigger here, I'm very interested to see how it turns out.  You know how to get a hold of me if you have any questions.

    As for selling the mh; there are some slight differences, but it certainly isn't entirely different.  The biggest thing is to be sure to tailor some of your marketing to the older demographics, since that is a huge part of the MH buyer pool in SD.  I almost never advocate for ads in the local paper, but with MH's I actually think it is worthwhile.  Let me know if you'd like my help when she's all finished :)

    0Reply
  • Justin R.
    OP
    Developer · San Diego, CA · Member since 2015 · 1k+ posts · 1k+ votes
    10y

    @Bruce May and @Kevin Fox and @Dan H. - asked for updates, and you got it.  :)  

    Closed yesterday on this home and should be locked on the rehab and starting that early next week.  Here's some pics of the "happiness"...

    Two car tandem parking. Note that really large backyard. Needs some work, but it's definitely bigger than my personal residence backyard, and it backs up to an established SFR neighborhood:

    The front door is indicative of the inside...

    25 years of smoking and who-knows-what-else in the house (we got the story of the previous owners from a neighbor - we can go through that over a beer).  ;)  Note the smoke stains on the wall surrounding where the picture frames were removed:

    '

    1980's kitchen.  Cabinets are cheap pressboard, but they'll look ok after some TLC:

    Laundry room and back door.

    Typical bedroom.  Thankfully it's not mold ... just some unknown nastiness on the wall.  Hoping they've got stainblocking primer on sale at Home Depot...

    There's some "soft" spots in the subfloor.  "Soft" meaning if you step on them the carpet may tear and you'll fall through.  We'll know more after we get the carpet pulled up.

    Overall, there's nothing I see that's atypical of a standard cosmetic flip.  Scope includes scraping and skim coating all ceilings, laminate in the common areas, carpet in the bedrooms, new fixtures in all bathrooms, epoxy painting showers, repair siding, new gutters, some new fencing and landscape clean up.  Targetting end of April to have it on the market.

    We, shall, see.

    Thanks especially to @John Fedro and @Jeffrey H. and for your input and giving me the confidence that this isn't a totally big risk to take on.

    3Reply
  • Dan H.Pro Member
    Investor · Poway, CA · Member since 2015 · 7k+ posts · 8k+ votes
    10y

    @Justin R. curious where this beauty is located???

    I think you will make a fine profit.  You originally indicated the park manager had potential issues with you flipping (which I did not understand at all).  How did that work out?

    Good luck

    0Reply
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