Updated about 1 year ago on . Most recent reply
manufactured to real estate, new construction refinance
I was speaking with a man who has a long history in lending and working for a bank, and he was poking some holes in an investment strategy I was formulating. I would like to share here and get some opinions.
My plan was to purchase a lot and build a foundation, bring in a doublewide/manufactured house. have it placed on foundation and have a structural engineer reclassify it as fixed real estate. then, I would refinance.
The process from start to finish would take four months and cost ~200k to build, with comps in the area around 355k
-lender man said, refinancing would take six months as most lenders wont refinance a property unless its been built for six months, affecting the strategy to get paid out from refinancing quicker and closing out on construction loan
-The property would not appraise at comps value, but at the cost it took to build, affecting getting paid out from the refinance. We would be able to close out on the loan and rent at a 30yr mortgage, but no big pay out from refinance.
-Even if reclassified as real estate, it would still be seen as manufactured or mobile home, and would not appreciate in value.
I am having a little trouble understanding this, as I thought that if a double wide was built and then brought to a lot as brand new.. not having a used one that has been lot to lot.. and immediatly tied down to foundation (slab). that it would then be seen as real estate, and not manufactured?
I also do not understand why it would not appraise at the comps value?
What variables should I be looking out for or paying attention to?