While still searching for my first rehab project. I received a call from a home owner (Via Direct Mail) who is interested in selling. The thing is, is that it's a "Manufactured home" basically a mobile home that cannot be moved. Talking it over with my partner I've been told that investing in this type of property, 1) it would be hard to get funding 2) it's difficult to get comps for the property. I don't know much about this part of investing which is why I'm coming to BP for insight.
Would flipping a manufactured home be a good idea for a first flip?
If it's true that getting comps for these type of properties would be difficult, how would I find comps to get a proper ARV?
What would an experienced rehabber/investor suggest?
How difficult would it be to get funding for this type of home?
The property was inherited in 2014 & sold to a bank for 100k.
March 2016 sold for 77k to the current owner.
Current asking price is 90k.
Info on the property:
Property Land Area: 19,807 SF
Detached 2 car garage
3 Bed 2 full bath - 1 story
Vacant for at least 4-5 years
My initial thought was to rehab this property for a buy & hold investor.
Rehab the home to get it rent ready.
Possibly turn the 2 car garage into some type of a rental unit
Finally, place another manufactured rental unit on the open space of the property if possible
I've seen this property in person multiple times. my aunt has an SFR directly on this street, that's mixed with split level & standard unit properties.
As I stated before I don't know if this would be a good project to start with, what I do know is this is an investment property that hasn't been occupied for at least 5 years, needs a nice rehab & has potential.
Advice is definitely needed
**These pictures are a little outdated from google maps**
**These are the current photos of the property**
Yes and no.
As far as flipping, no different than a regular house on a concrete pad or footing blocks (wood frame and sheetrock).
However, you're right that it might be hard to get financing. You would have to do some research and see if there are any other similar homes in the area. I know there are some communities here and there in Maryland with Manufactured Homes. But, I'm not sure how close they are to your prospect.
There are some lenders that will do the finances. Try and speak to a few of them and see if it will work. Some lenders specialize in Manufactured Homes. Mountainside Financial is one. Triad Financial Services is another.
Yeah, I believe this is the only property that has a manufactured home in that area. With it being in such distress I couldn't just ignore the rehab possibility. I think in this area would be good as a rental. Without actual comps, I don't see how I could even come up with a ARV. I know the garage could be turned into another rental unit also.
If the numbers work yes. If your trying to sell then it in most cases has to be on an approved permanent foundation as far as financing is concerned. In south Texas the less expensive way that most lenders including FHA approve is called retro fitting. It's about 3000 to 3500 on a double wide.
Maybe it's already on an approved foundation need to check into it.
@Brandon Turner talks about mobile park investments, maybe he can comment on this?
@Joe Davalos I am trying to buy and rehab then sell. I haven't heard back from the lender yet to answer the "approved foundation" question but I will be sure to get an answer once I speak with her. I also cant run numbers because the comps for this home are few and far between.
@Christian Sifuentes I think this maybe a little different because the actual property isn't in a mobile park. It's surrounded by single family/standard unit and spit level properties. I'm sure I could entertain the "knocking down the small house and building a big house" but this is my first rehab and to take that option on would be a big project. Any advice @Brandon Turner may have would be welcome none the less.
How much work does this need? If it is a significant amount of work, you could actually look into rolling in a new home. Someone would probably take the current home as is and haul off for free and you could roll in a brand new house for $50k. I'm not sure if that would work with your numbers.
@Ryan Kinsella What I do is the current owner wants 90k. To be perfectly honest I haven't been able to run numbers without comps. I did think of the possible option to either rehab both the home and garage to rent out and bring in a new home, that would sit next to the current unit.
Hauling the old home and bringing in a brand new house is something I didn't consider but I will make that an option. Seems logical. I just don't know what the value would be after until I can find some decent comps for an ARV.