RE: Mobile Home purchases with land and without...

4 Replies

When considering mobile homes whether with property or purchasing property for mobile homes (land with septic tank and well), what things should I make sure I know about?

I've called regarding codes and zoning. They mentioned something about a well inspection etc. What items do you have done before making an offer on a property like this, and how would the finding results either encourage or discourage your purchase or offer amount?

One of the problems we have is that the manufactured home doesn't do well in resale here, but it may be different in your neck of the woods.  If I were considering a manufactured home purchase I would make sure to get the best deal at the beginning because in this part of NC I know that I will not get a lot of appreciation, and I may actually get a decrease in value.  

Also, many of the banks in my area won't finance manufactured homes, and the banks who do offer financing will expect that the home is well maintained and is sitting on a permanent foundation and even then the rates for those loans will be higher.  You may want to check to see if this is the same where you are.  If it is the same in your area, remember that this will cause problems when you finally do sell.  You will be limiting your pool of potential buyers.

If I were purchasing I'd really take time to figure out if the land and the location was worth it and I'd make sure that I could get a good rent and that I didn't have a lot of competition.

I have a client who bought 3 doublewides a few years ago.  He does really well because of their location.  He's not worried because he bought them really cheap, the land is good and the rents are great.  His only concern is that the turnover is a little bit higher, but that may just be the area and not the type of property.

His deal is still profitable because he's doing a lot of the fixes himself and the units are pretty nice.  

I think you should definitely still do the regular home inspections and I'd double check the well water.  If the well has been sitting it probably needs to be treated.  

Just a caution about wells, it is important to know the depth of the well too because if you have a drought the well can run dry.  If your area tends to have some droughts you will want to know that this may be a possibility.  

@Margie Fuller we have purchased many manufactured homes in our area and used them as rental properties, as well as flips. We have found it is much easier to resell manufactured homes on lease options. The people who are looking to buy mobile homes, tend to be looking in low price ranges. We do lease options so that we have time to help them build up a good down payment and purchase the property at the end of the lease period. 

If you plan on using manufactured homes as rentals, we have also had good luck with that. In our area, we get almost the same rent for a 3/2 manufactured home as a 3/2 stick built, so it really depends on your area and how much you can get in rent for a manufactured home. 

Let me know if you have anymore specific questions!

Hi Adam. One specific question I do have is, what do you typically do before you make an offer on a MH? If the property isn't occupied, I've been told the septic tank and well need to be inspected. Is that something that the owner provides? Are there any other types of buyer due diligence that you do on MH that you wouldn't typically do for a stick built home? Have you ever purchased a mobile home and wanted to improve the property only to learn there were things that you missed prior to closing that you should have known?

Originally posted by @Adam Soelberg :

@Margie Fuller we have purchased many manufactured homes in our area and used them as rental properties, as well as flips. We have found it is much easier to resell manufactured homes on lease options. The people who are looking to buy mobile homes, tend to be looking in low price ranges. We do lease options so that we have time to help them build up a good down payment and purchase the property at the end of the lease period. 

If you plan on using manufactured homes as rentals, we have also had good luck with that. In our area, we get almost the same rent for a 3/2 manufactured home as a 3/2 stick built, so it really depends on your area and how much you can get in rent for a manufactured home. 

Let me know if you have anymore specific questions!

@Christina McCaffrey Thank you for your response. I live in a rural area, so there are a lot of mobile homes here, but they are spread out all over the county. There is a 1 acre restriction for mobile homes if they are on septic tank. The exception to that is of course mobile home parks that are preexisting, but I'm not finding any of those for sale. 

I do have a few mobile homes on my prospect list. If I can purchase a rehab mh to replace with some of these that are in bad shape (if I'm even permitted to do that by code---that's one of those things I have questions about), I can be more competitive because of the size of the property. I am ready to make a decision and make my first purchase to just get the process going, but I don't want to jump without being smart about it all. I need to set some goals to make sure this happens in a reasonable period of time.