Mobile home strategy

4 Replies

Hey, 

So my mom inherited a piece of property with 4 mobile homes and a house. But the mobile homes are in rough shape and need a lot of work to get livable, same with the house. She doesn't really know if she should just sell it all or if there is an opportunity she is missing. Any ideas?

Figure out how much it would cost to renovate the mobile homes and the stick-built house. Figure out how much they would rent for if renovated. Figure out how much it would cost in expenses to rent out the four mobile homes and the house. Calculate the net income. Cap that income at 10%. Subtract that amount from the cost to renovate all five structures.

Now compare that number to what you can sell the property for "as is". If it's significantly higher to do all that work, then you might proceed. Otherwise, dump it. That project sounds very capital intensive and my bet is that the numbers will demonstrate that you should just sell it "as is" but I leave it up to you.

@Davis Evans If the homes haven't been lived in for a while, there's probably a significant amount of work needed to fix them up. You'll have to go through them and see exactly how much damage it has including the repairs and replacement costs needed to get them back into habitable condition. You may need to bring in contractors to get a few estimates for each project needed. 

If it's too much work to do, it may be best to try to find someone to take them off your hands. Then, you'll just have to find newer ones to put on that piece of land if that's the route you want to go. Be sure to check with zoning to see if there are any restrictions on putting newer homes on that parcel of land before you do anything. 

Hope that helps. Best of luck!