Manufactured but not Mobile

11 Replies

Hello BP Community! This is my first time posting here... thank you for your replies and insights. I have searched the forums but have not found a thread that matches my situation. I have the opportunity to purchase an off-market doublewide in an easy-to-rent area (SW Colorado where housing is tight), the land is included in the deal, the doublewide sits on a foundation and has been deeded together with the land. The math is there, I can purchase the property and complete the remodel for $120k all in (Seller financed during the repair and seasoning period). ARV for similar properties in this area (manufactured homes) is about $200k, so I plan to use the BRRRR method to recover some if not all of the initial investment and then rent it out long-term.

My question is this: I am not familiar with the bank's perspective on manufactured housing, or on the long-term issues that may come from owning a manufactured house. What do I need to know before jumping on this apparent deal and will I even be able to refinance the property given the manufactured construction? Thank you for your responses! 

@Mac T. is that you? So - let's make sure you are talking about a "manufactured home" and not a "modular home". Manufactured will most likely have steel beams underneath and be designed to work with or without a permanent foundation. Assuming it is manufactured, the next question becomes what year was it manufactured and does it have a HUD plate on it? This is a huge factor in how banks will finance the ultimate purchaser. You can google HUD certification on manufactured homes to learn more - but the important date to remember is: June 15, 1976 - built before then is pre-HUD and lending is scarce at best.

It sounds like you plan to hold and rent this out? So biggest issue is conventional lenders will lend on a manufactured home on a permanent foundation, but can only do it for primary and second homes, not investments. So this works if you plan to move in and live there for a year, and then move out and rent. Or if you can find a lender for a portfolio loan that would be another option.

Originally posted by @Eric James :

"Double wide" is short for double wide trailer. That's a mobile home. A modular home is something else.

 I had lunch with a friend in a double wide modular in Santa Barbara CA that appraised for over $1,000,000 a few years ago. Apparently Double Wide Modulars are in the eye of the beholder and the appraiser.

Originally posted by @Mike Hern :
Originally posted by @Eric James:

"Double wide" is short for double wide trailer. That's a mobile home. A modular home is something else.

 I had lunch with a friend in a double wide modular in Santa Barbara CA that appraised for over $1,000,000 a few years ago. Apparently Double Wide Modulars are in the eye of the beholder and the appraiser.

The term "double wide" is nonsensical in terms of modular homes. Just as double wide doesn't apply to regular construction stick homes. The "double" is only in reference to "single" wide, which is a trailer/mobile home. The definition isn't in terms of value.

 

@Mac T.

So everything you've described here is well within the limits of getting a conventional loan except occupancy.  As @Matt Devincenzo pointed out, no loans for investment MH.  I have lenders who will lend in Colorado that do single, double, and triple wides.. heck, they even do Tiny Homes and Shipping Container homes, but there are many restrictions.  Occupancy is the only thing you've mentioned that they won't lend on.  As a second home, you'd need to live in it for at least 2 months of the year, you free to rent out the remainder.

Nick

Originally posted by @Eric James :
Originally posted by @Mike Hern:
Originally posted by @Eric James:

"Double wide" is short for double wide trailer. That's a mobile home. A modular home is something else.

 I had lunch with a friend in a double wide modular in Santa Barbara CA that appraised for over $1,000,000 a few years ago. Apparently Double Wide Modulars are in the eye of the beholder and the appraiser.

The term "double wide" is nonsensical in terms of modular homes. Just as double wide doesn't apply to regular construction stick homes. The "double" is only in reference to "single" wide, which is a trailer/mobile home. The definition isn't in terms of value. 

Why does this matter so much to you?

 

@Mac T. Refinancing will depend on the lender. You may want to talk to a few mobile home dealerships in the area. They are in the business of selling new mobile homes and working with lenders. They may have a few referrals and pointers for you. In the past, I've found them to be a good source of information and referrals. 

Regarding repairs, you'll have to look at the major systems in the home such as heating and air conditioning, hot water heater, plumbing, etc. Check to see when these items were last serviced, repaired and/or replaced. This will give you an idea of what will need to be done either now or in the future. 

Another thing you want to check is the roof. When was the last time it was serviced or replaced? This may be another area where you'll have to spend on the fix up. 

Lastly, usually the subfloors will need to be replaced and/or repaired sometime down the road. It will depend on what type of material is used for the subfloor. If particleboard, then usually soft spots will occur over time in high-traffic areas. The areas will need to be cut out and replaced with new wood. 

These are just a few things to look out for when it comes to repairing manufactured homes. 

Hope that helps! 

The number one nemesis of mobile homes (single or double wide) is water leaks. When they leak water it damages the ceiling, walls and floors. So look for that kind of damage.

If the home is attached to the land (not meaning anchored but a paperwork thing where it becomes real property), then some lenders will work with you. In some states they use terms other than attached but otherwise you have a piece of land with a "vehicle" sitting on it. I believe in Colorado, it's an "affidavit of real property".