How banks see ARV on mobile homes

[Account Closed]

Hello From what I understand, with no experience in real estate investing, mobile homes only depreciate and that banks don’t see them as having any increase in value after repairs. Is this true? I would like to begin my real estate investing career with them and am trying to figure out if I should expect to either have to do owner financing with my buyer after I make repairs or expect to target cash buyers. Thanks

[Charlie MacPherson]

@Account Closed You could certainly increase the value of a mobile home by rehabbing it.

You're correct that mobile homes lose value over time, where stick-built homes tend to gain value.

However, be aware that mobile homes aren't considered as "real estate" by lenders, so they cannot be financed with a regular mortgage.  They require a "chattel", or personal property loan.

Your challenge in making a business rehabbing mobile homes for profit is to find a lender who will write these loans.  Other people in the park can tell you where they got financing.

Make sure your buyers have a proper pre-approval from a mobile home lender.