Refinancing trailer house

8 Replies

I was told that some lenders may not refinance trailers house due to the quick depreciation. I’m planning on moving a trailer house onto an acre of land and refinancing it for a cash payout. Would this be a bad idea?

@Hunter Wilburn

first things first, by trailer house I assume you mean mobile home?  Mobile homes are considered chattel and not real estate. So the only type of loan you can get on the mobile home is similar to a car loan. 

Now you can tie the mobile home to the land by doing somethings, like cutting of the hitch and other things required by your state's laws. Then the mobile home would be considered an improvement on the land and you could get an loan on the land.  

@Hunter Wilburn I have a couple mobile homes that I own as rental properties. One I paid all cash for and other one i got a loan through farm credit using land we own as collateral. I havent found anyone that will let you cash out on a property with a mobile home. The only one that I know of that will even loan on a mobile home as an investment property is Vanderbilt Mortgage. You have to put 10-20% down depending on your CS and their closing costs are pretty high along with 8% interest rate. If you do find someone else that will loan on them, please let me know.

Most states have a process to turn a mobile home into "real property". Here in Georgia it's known as "attaching" but different locales use other terms for it. Essentially, the title of the mobile is surrendered and it becomes real property and is taxed as such. 

Originally posted by @Hunter Wilburn :

I was told that some lenders may not refinance trailers house due to the quick depreciation. I’m planning on moving a trailer house onto an acre of land and refinancing it for a cash payout. Would this be a bad idea?

Some lenders will not. However there are at least five national ones that will, and one of them specializes in this type of lending (refinance). The B.S. that is floated here and elsewhere regarding lending is always amazing to me. In addition to building communities from raw land, buying and rehabbing communities, and (later) running a national consultancy in the manufactured housing industry, I also founded and ran two finance organizations that loaned money to people to buy a manufactured home to live in. At the time we sold our finance organization we had over $478,000,000 in loans in the portfolio. (2013) Financing manufactured homes is a great business - but only for those who actually know what they are doing.

In the first community I built in Florida (1975) we sold first year HUD homes (24x60s with attached Florida rooms) for $18,000 give or take. The last time I was in that community (2005) all but one of the homes we sold were still there and owner occupied. The few that were for sale were going for more than $100,000. So much for automatic depreciation.

Manufactured homes depreciate because:

Owners do not take care of them;

Community operators do not take care of the community the homes are placed in.

The brand/model of home was very cheap to start with and never intended to last. (Surprise: This industry makes both "Yugos" and "Rolls Royces" and everything in between.)

By the way, they are not trailer houses, nor are they mobile homes, they are manufactured homes. When the HUD Code came into being, the law changed the name from mobile homes to manufactured homes. None of what has been built for the last 20 years is trailerable by a car or truck, and given the size and weight of them today, none of them are very mobile.

This is a good forum, but like all Internet forums, there are far too many keyboard commandos that are so desperate to be somebody they will post with absolute authority statements that are not factual or are sometimes, but not always, true.

@Ken Rishel

Thank you so much for your insight. That has certainly shed some light on my knowledge of Modular Homes. I feel you should write a book about it. I’ve learned more from your response then I have with all the research I’ve done and podcasts I’ve heard, and forums I’ve read.

Originally posted by @Ken Rishel :
Originally posted by @Hunter Wilburn:

I was told that some lenders may not refinance trailers house due to the quick depreciation. I’m planning on moving a trailer house onto an acre of land and refinancing it for a cash payout. Would this be a bad idea?

Some lenders will not. However there are at least five national ones that will, and one of them specializes in this type of lending (refinance). The B.S. that is floated here and elsewhere regarding lending is always amazing to me. In addition to building communities from raw land, buying and rehabbing communities, and (later) running a national consultancy in the manufactured housing industry, I also founded and ran two finance organizations that loaned money to people to buy a manufactured home to live in. At the time we sold our finance organization we had over $478,000,000 in loans in the portfolio. (2013) Financing manufactured homes is a great business - but only for those who actually know what they are doing.

In the first community I built in Florida (1975) we sold first year HUD homes (24x60s with attached Florida rooms) for $18,000 give or take. The last time I was in that community (2005) all but one of the homes we sold were still there and owner occupied. The few that were for sale were going for more than $100,000. So much for automatic depreciation.

Manufactured homes depreciate because:

Owners do not take care of them;

Community operators do not take care of the community the homes are placed in.

The brand/model of home was very cheap to start with and never intended to last. (Surprise: This industry makes both "Yugos" and "Rolls Royces" and everything in between.)

By the way, they are not trailer houses, nor are they mobile homes, they are manufactured homes. When the HUD Code came into being, the law changed the name from mobile homes to manufactured homes. None of what has been built for the last 20 years is trailerable by a car or truck, and given the size and weight of them today, none of them are very mobile.

This is a good forum, but like all Internet forums, there are far too many keyboard commandos that are so desperate to be somebody they will post with absolute authority statements that are not factual or are sometimes, but not always, true.

I dont know if this is in reference to my post, but I was simply saying that I havent found anyone that will lend on single manufactured houses as investment properties. Sure, parks are no problem as they are commercial loans. I would love to know of such lenders if they are available, as I would love to buy more manufactured properties, as they are in abundance around us. Wasn't trying to say I know the facts, just saying I didnt know of any. Would you please PM me names of some lenders so.I can check into them?

 

Originally posted by @Josh Taylor :
Originally posted by @Ken Rishel:
Originally posted by @Hunter Wilburn:

I was told that some lenders may not refinance trailers house due to the quick depreciation. I’m planning on moving a trailer house onto an acre of land and refinancing it for a cash payout. Would this be a bad idea?

Some lenders will not. However there are at least five national ones that will, and one of them specializes in this type of lending (refinance). The B.S. that is floated here and elsewhere regarding lending is always amazing to me. In addition to building communities from raw land, buying and rehabbing communities, and (later) running a national consultancy in the manufactured housing industry, I also founded and ran two finance organizations that loaned money to people to buy a manufactured home to live in. At the time we sold our finance organization we had over $478,000,000 in loans in the portfolio. (2013) Financing manufactured homes is a great business - but only for those who actually know what they are doing.

In the first community I built in Florida (1975) we sold first year HUD homes (24x60s with attached Florida rooms) for $18,000 give or take. The last time I was in that community (2005) all but one of the homes we sold were still there and owner occupied. The few that were for sale were going for more than $100,000. So much for automatic depreciation.

Manufactured homes depreciate because:

Owners do not take care of them;

Community operators do not take care of the community the homes are placed in.

The brand/model of home was very cheap to start with and never intended to last. (Surprise: This industry makes both "Yugos" and "Rolls Royces" and everything in between.)

By the way, they are not trailer houses, nor are they mobile homes, they are manufactured homes. When the HUD Code came into being, the law changed the name from mobile homes to manufactured homes. None of what has been built for the last 20 years is trailerable by a car or truck, and given the size and weight of them today, none of them are very mobile.

This is a good forum, but like all Internet forums, there are far too many keyboard commandos that are so desperate to be somebody they will post with absolute authority statements that are not factual or are sometimes, but not always, true.

I dont know if this is in reference to my post, but I was simply saying that I havent found anyone that will lend on single manufactured houses as investment properties. Sure, parks are no problem as they are commercial loans. I would love to know of such lenders if they are available, as I would love to buy more manufactured properties, as they are in abundance around us. Wasn't trying to say I know the facts, just saying I didnt know of any. Would you please PM me names of some lenders so.I can check into them?


I misunderstood what you were looking for in the way of a lender. I thought you were looking for lenders that would lend to consumers wishing to buy homes to occupy themselves.

If you want to buy brand new homes to sell to consumers and need them financed for you until they are sold, 21st Mortgage does this all the time, as does Triad Financial Services. I'm certain there are some regional players as well. If your volume is sufficient, FirstBank (Nashville, TN) works all over the country with community owners on all their capital needs.

If you are looking for capital to buy and then rent homes, a local bank often works, but many community owners that rent homes get their capital from private investors.