To do or not to do. I found a great deal on an older but very well maintained manufactured home in the a very nice area of san Fernando valley. the only problem is that the banks don't want to loan on it because it is pre 1976 I don't mind buying it cash or with some hard money. My only concern is I will have just as hard of a time selling it. The price is only 35k and needs some minor updating approx. 1500. at most. So many options here the home itself is not worth much but because the lot has a very low rent. less than 800. when all others in the park are going for 1200-1500. I am debating to buy fix and list. Or sell the home to be removed and replaced with something much newer.
If you're buying it with the intention of selling it then you kind of answered your own question. Any potential future buyer will have the same problem getting financing as you did. Pre-June 1976 mobile homes do not meet HUD standards.
It's too bad. Older mobile homes, if maintained properly, have a certain kitschy charm that some would find appealing.
What's your end goal? Do it as an investment?
I'm not sure if you want to buy, fix and sell or move it. ??
1 - Why is the rent lower than other units in the park? Is it location or age of unit?
2 - If you moved it and put in a newer one would the rent go up to the other, newer ones also?
3 - I would think $35k for that age is a lot of money. If you bought for cash you can usually get a much better price than retail. Since it is older, and no loans are available, the price may be flexible.
4 - Would you want to buy it for $35k and move it out to put another in?
5 - Can it stay in the park? Some parks require older ones to be moved when they sell.
6 - Is it a family or senior park?
A little more info and we can give you some ideas.
I've been buying 1960s mobiles (for cash), rehabbing them, and renting them out. I think that's where the money is. Their book value is low, but their value as a rental is high. Of course, the park has to allow you to sublease, which is often not the case.
If you choose to move the house away, make sure the local jurisdiction allows for that. The county where I invest won't even allow transportation of mobile homes older than 15 years to a site within the county.
No the park does not require to move it upon sale. the previous owner has been there nearly 20 years. since park rents are rent controlled the park can raise the rent additionally when the owner changes but no more than 10 percent. There are very few homes in this park that have sold in the past 3 years 2 sales to be exact one is for sale at 79k but it is a 2003. It is a family park the only one in the neighborhood. I'm new to the manufactured home world, but do come across really cheap mfh's that need to be moved and it costs about 3k (depending on the distance) to bring one in and set it up. So i figured if i can get even 5k for this one and buy a newer one for about 20k plus 3k for set up. It should be worth 70 or 80k. what do you think? I really appreciate your time you ask some very good questions.
I'm closing escrow on my first mobile home flip on the 14th, i'm a little scary of the unknown but excited about the fundimentals of the deal. That's what it comes down to, for me the home is on a permanent foundation and the comps around it are fantastic. I'm going to close and resell as fast as possible, well we will spend $40,000 on the remodel. It's going to be an adventure.
If you can get $5k profit on your first deal, I'd say go for it. Do your due diligence to make sure everything is up to code on the older unit. Code for your area may include plumbing, electrical, bedroom windows (proper height, width and clearance for egress), some areas require sheet rock around the heater and hot water heater.
Local city or country building department can give you the code info.
Sounds great! Good job!
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