An idea I want to run by you guys/gals.

Mobile Home Park Investing
13yFollow

An idea I want to run by you guys/gals.

Jason Cotner
Real Estate Investor · Canon City, CO · Member since 2013 · 54 posts · 2 votes

Hello All,

I have mentioned before that we have a MH in a park that we want to use to get started in REI. We think we can sell it for 23-25k Which is option #1. Option #2, (and this is what I wanted to run by you good people) is to put it on it's own land, put a little money into it to get it looking very nice, and sell it.

So here is my plan, and I know it has to be full of holes so bare with me.

The home is a 1988 3bd/2ba 1269 sq ft In very good condition it is just outdated a bit.

Land= $10,000

Relocate MH= $6,000? I am having a hard time pricing this. We won't be moving it more than 3 miles.

Remodeling= 10,000

Things that have not occurred to me= 10,000

We would like to fund this with hard money. Is this feasible? If so, I am at $36,000. If we were to get the loan for 40,000 and I think 12-15% interest here in CO.....I'll just say 50k to pay back when everything is said and done.

I am probably dreaming here but I would like to sell it at 90k, but even at 75k that would be around 25k in profit (which would be close to what we could get if we just sell it) I don't know... just playing around with this.

Any thoughts or advice would be greatly appreciated!

Thank You

-Jason

0Reply
11 views

Most Popular Reply

Ben Reese
Real Estate Investor · Driggs, ID · Member since 2008 · 60 posts · 21 votes
13y

Hi Jason,

Several things about your plan jump out at me.

[b]Age: There are a lot of 25 year old MH's that can be bought for less than $23-25K which causes me to wonder if you can truly get this for yours as it sits.

[/b]Your Exit Strategy (AKA, Who is your buyer?): Let's say you move it to the new site. Now you have a 25 year old home on a piece of property. Who is your targeted buyer? Very few (if any) banks are going to touch this meaning this buyer had better be bringing cash to the closing table...And anyone with $75K plus in cash is probably not in the market for an old MH, especially considering $45K or less will buy an absolutely gorgeous single-wide these days. And that new single wide IS financeable.

[b]Hard Money: You may find some family or friend who would help you, but a HM lender is not going to touch this. HM lenders are concerned with loan-to value and will not want to be secured by a depreciated asset that could literally be hauled off in the middle of the night.

[/b]Idea: Your home is likely worth the most it is ever going to be right where it sits. (Unless it's in a hopeless park) That's because it's going to take $4-6K out of your pocket just to move it. And unless you move it to another park you are going to have expensive utility hookups to provide when you get there. So why not rent or sell it where it sits? And before you do, instead of spending $10K why not spend $1500 by cleaning it up, repairing the skirting, putting $100 worth of cheap painted shutters on the exposed side, finding some carpet remnants for the floors, and attacking the interior with a cheap airless paint sprayer and then either: 1) rent it or 2) take a down payment and sell it on terms? Google "Lonnie Dealers" for some ideas on how to do this.

Good Luck!

Ben

1Reply
See this reply in the discussion

5 Replies

Jump to latestLatest
  • Ben Reese
    Real Estate Investor · Driggs, ID · Member since 2008 · 60 posts · 21 votes
    13y

    Hi Jason,

    Several things about your plan jump out at me.

    [b]Age: There are a lot of 25 year old MH's that can be bought for less than $23-25K which causes me to wonder if you can truly get this for yours as it sits.

    [/b]Your Exit Strategy (AKA, Who is your buyer?): Let's say you move it to the new site. Now you have a 25 year old home on a piece of property. Who is your targeted buyer? Very few (if any) banks are going to touch this meaning this buyer had better be bringing cash to the closing table...And anyone with $75K plus in cash is probably not in the market for an old MH, especially considering $45K or less will buy an absolutely gorgeous single-wide these days. And that new single wide IS financeable.

    [b]Hard Money: You may find some family or friend who would help you, but a HM lender is not going to touch this. HM lenders are concerned with loan-to value and will not want to be secured by a depreciated asset that could literally be hauled off in the middle of the night.

    [/b]Idea: Your home is likely worth the most it is ever going to be right where it sits. (Unless it's in a hopeless park) That's because it's going to take $4-6K out of your pocket just to move it. And unless you move it to another park you are going to have expensive utility hookups to provide when you get there. So why not rent or sell it where it sits? And before you do, instead of spending $10K why not spend $1500 by cleaning it up, repairing the skirting, putting $100 worth of cheap painted shutters on the exposed side, finding some carpet remnants for the floors, and attacking the interior with a cheap airless paint sprayer and then either: 1) rent it or 2) take a down payment and sell it on terms? Google "Lonnie Dealers" for some ideas on how to do this.

    Good Luck!

    Ben

    1Reply
  • Jason Cotner
    OP
    Real Estate Investor · Canon City, CO · Member since 2013 · 54 posts · 2 votes
    13y

    Ben Reese when you put it that way it doesn't sound so appealing:-) I think I needed someone to explain to me why this is a bad idea and you did a great job. We will stick with option 1. Thanks for your advice.

    -Jason

    0Reply
  • Steven J.
    Urbana, IL · Member since 2012 · 1k+ posts · 425 votes
    13y

    Jason Cotner I've got to agree that your second options isn't very solid for a potential buyer.

    On the other hand, you may find yourself being able to rent it out or lease-option the home to others. You've already got yourself possible buyer/renters because people with bad credit will LOVE your lease-option deal and its a piece of property they will actually get to own, rather than continue to rent.

    0Reply
  • John FedroPro Member
    Investor · Austin, TX · Member since 2009 · 410 posts · 295 votes
    13y

    Excellent advice Ben Reese!

    On your first few deals try to aim for the path of least resistance. Focus your efforts on advertising and finding sellers with good-looking homes that are motivated to sell and already have homes for sale on land or inside parks.

    Hope the deal works out for you. Stay in touch.

    Best,
    John Fedro

    Podcast Guest on Show #75
    0Reply
  • Rachel H.
    San Antonio, TX · Member since 2009 · 3k+ posts · 1k+ votes
    13y

    Option #1 will be less riskier than Option #2 considering the age of the home. When moving mobile homes, there are so many factors to consider and surprises may come up during the move. Either way, it's always a learning experience. Hope that helps!

    0Reply
Join the conversationCreate a free account to reply, vote on answers and follow this thread.
Log InJoin for Free