Should I get an Inspection?

Question

So long time lurker first time investor. I’m currently looking at starting with mobile home investing. I’ve been looking at a few properties. Since starting out I figured why not grab one on the cheap that will need some work so I can rent it out.

My question is should I get an inspection if I plan on doing a full rehab and replacing just about everything anyway. Will I just be wasting my money in the long run? As far as it stands the home(s) will stay where they’re at I don’t plan on moving them anytime soon.

Adrian Adams · Answer

@Frank Rolfe

Thanks for the tips I’ll make sure to look into them I don’t want to have anything come back and bite me later. Yea I wasn’t planning on making something extravagant just comfortable to live in something I’d actually live in.

Moises R Cosme · Answer

Adrian,

Here are the downsides to investing in mobile homes:

1. You do not own the land, so there is a significant portion of your monthly expenses that you will not control.  Mobile home parks have become a favorite investment vehicle for hedge funds, the reason they like mobile home parks so much is because they can leverage the owners (they own the land & you cannot actual move the mobile home).

2. There is no upside from a capital appreciation standpoint; mobile homes lose value over time, as compared to real property.

@ Frank Rolfe has good advice and his post reflects experience in this area.

A follow up question:  what are the numbers?  How much are you buying for?  How much is your 'all-in' payment monthly?  How much do you expect to collect for rent?  How much do you expect to spend on renovations?

Not looking to discourage you, I just want to offer you a different perspective.  BP does an amazing job of introducing concepts and ideas, but there is not a lot of discussion about the downside risks.  I hope this helps!!!  Feel free to message me if you want additional thoughts on this subject or any other.

Adrian Adams · Answer

@Moises R Cosme

I figure it to be easier to start in investing in in Columbus Ohio and from what I’ve seen in the available properties it out of what I’m comfortable with first starting. I need to get my feet wet first then move onto bigger properties.

Frank Rolfe · Answer

Mobile homes -- for the most part -- are all about affordable housing, so make sure not to "over-remodel" a model home. The customer is typically looking for safe, clean, affordable housing and are not expecting something off of HGTV That being said, you have to make sure the home matches your clientele. The mobile home industry is vast (roughly 8% of the U.S. population lives in a mobile home) and customers range from McDonald's employees to billionaires (in the Montauk park in the Hamptons) and even movie stars (Pam Anderson, Hillary Duff, etc. in Malibu).

Make sure you understand the rules from HUD on remodeling mobile homes, such as the fact that you can't enlarge windows or doors or increase the weight on the exterior walls (for example replacing paneling with drywall). Remember that mobile homes are inspected by HUD and you have to meet Federal criteria as well as state, county and local codes.

Also make sure you understand the SAFE Act and dealer requirements on selling homes in your state.

Perhaps the most profitable sector of mobile home investing is simply finding older homes that need just TLC with a seller that needs some fast cash. These type of deals are similar to the "quick car flips" you see on the Counting Cars show in which the guy finds classic cars that are filthy or need minor work and buy them from people who don't actually know what they're worth. In those cases you are making money using your mind and less about using your remodeling muscle -- that's a much easier lifestyle.

Moises R Cosme · Answer

If you plan on doing a full gut rehab, then yes, I would say getting an inspection is a waste of your time and money.  Why are you looking into mobile home investing first?  Have you looked at some of the pitfalls?

Adrian Adams · Answer

So I needed up passing on the property after some feedback and actually looking at things. I’ve got a couple of other properties to look at to where I’ll actually own the land and won’t have to do a complete or as in depth of a renovation. I was mainly looking at then based on the price they were being sold for but after looking at then the work would of been more than what I was budgeting. For a first time investor I wasn’t trying to sink all of my funds in the two properties. Thanks for the insight

Steve Morris · Answer

In general - Unless you know the property has only skin-deep stuff you can fix FOR SURE - I'd hire an inspector to look for stuff like foundation issues, moisture invasion, everything is to code, major mechanical stuff, life on expensive stuff like HVAC/roofs.

MHs a little easier though, but don't know the level of rehab you want to do.

Rachel H. · Answer

@Adrian Adams If it makes you feel comfortable, then by all means get an inspection done. There's not a right or wrong answer. For me personally, I inspect mobile homes myself as if I were going to live in there. Many times, someone is living in the property whether it be a seller or renter. If the home is vacant, it hasn't been vacant for too long. I'd proceed with caution if you're looking at homes that have been vacant for a long time (many years). If someone has been living in the home, that usually means it's habitable. Best of luck with your decision!

Calvin Ozanick · Answer

I almost always recommend an inspection. When it comes to full rehabs in Mobile homes, I would say you probably do not need one. However, I would also ask what makes you want to invest in a mobile home first. It all can work the same but there are definitely some pitfalls to be wary of.

Rudolph Shepard Jr · Answer

Go for it. Mobile Homes are easier to repair than old houses.  The rental income or owner finance potential is outstanding. True they don’t appreciate like a Stick built house, but you can learn a lot about the process on a much lower budget.

Should I get an Inspection?

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