Newbie REI, mobiles homes in Southern Cal/SoCal/Orange County?

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John Arendsen · Answer

Hi Charles,

I would definitely be careful investing in MH's in MH Park Communities unless they are resident owned communities that allow sub letting which I assume would be your intention. Rent/lease MHC's have pretty strict rules and regs about sub leasing. In fact I know of very few that allow it.

Also stay away from Pre HUD MH's (built before June 15, 1976) as they are not only difficult if not impossible to finance, which I assume you'd want to do a some point in order to revisit your capital for forthcoming investments.

Most importantly be very careful about the location of the MHC or MH if on resident owned lot/parcels. While some MH's may appear very inexpensive in some areas there may be a good reason for it. If the MHC or MH is not in the path of progress or in a very blighted area I'd avoid it. The quality of your tenant pool would most likely be pretty sketchy.

Personally, having been a general and MH contractor, developer, RE broker, investor and property manager for the past 3 decades I'm starting to look into "Tiny Homes" for future investing and development. It's just starting to get some solid attention from the California Department of Housing and Community Development (HCD). They regulate the MH Industry Statewide and it looks like they might be ready to let go with some favorable regs.

I recently posted a document from the HCD about it. Here it is if you want to peruse and consider this path. If you want to discuss this or any other aspect of the MH or investing biz please feel free to contact me anytime.

http://activerain.com/blogsview/4978526/could--tin...

Sanjeev Advani · Answer

@Charles Stevenson - I have worked in mobile homes before, and there are definite ways to make money, especially through flipping.

Your buy in cost will be low, but your profit amount will also be low based on the value of mobile homes.  However, you can achieve some pretty good return rates.

Feel free to reach out and hopefully we can help you with some deals.

Jo-Ann Lapin · Answer

Here in tistin. Happy to chat and assist. We like the product if bought right

John Arendsen · Answer

Just answered via private email. However, for the benefit of others who may be looking into MH's stay away from any MH built before June 15, 1976 for a variety of reasons i.e. financing, carcinogenic and caustic chemicals, flimsiness and poor quality (built like a trailer).

In fact I'd stay in the circa '80's and newer as that's when they changed from being "Mobilehomes" to Manufactured Homes and were built to HUD standards which are like site (stick) built homes. Much easier to finances and sell.

Most importantly make sure that the geographical and socio-economic demographics are in the path of  progress. Lot's of older MHC's are in blighted areas and are slowly depreciating. It's not always about buying on the cheap. Cost is relative.

If you're buying along the coast, on a golf course or in a resort oriented community you may pay more for the home but the value is there and much more desirable for potential buyers. Also if you're thinking about buying and holding to rent in a MHP rent/lease community be sure you get permission in writing from the owner/manager. Most MHP's will not allow sub leasing. Even in resident owned communities.

Joe Homs · Answer

@Charles Stevenson  you can flip anything that makes dollars and sense.  My father use to flip cars 30 years ago.  The hard part is to find something that makes sense.  For example when I purchase a home to flip I know what my ARV is before I buy.  It should NOT be a guessing game.

Another example:  I have an agent in my office who sells in a mobile home park in Riverside.  She sells them for $5-10K and takes a $10-15K commission on the deal.  Is that crazy?  That is her niche and she does very well.

Good investing...

Joe Homs · Answer

@Charles Stevenson  ditto what @John Arendsen just said.  He beat me to it.  This is California and not any other state which may be different.

Good Investing...

Richard Copeland · Answer

Charles: I broker financing for commercial and multifamily real estate.  MHPs are a good option if you find and buy the right ones.  There are plenty of sources for financing available as well.   Most of the ones I have seen have been cash cows.  However, the better properties don't last long and if it's of size and a decent number of pads, MHP companies want be to far behind to acquire it.

Be sure to do your due diligence!!  I have a client that didn't inspect the onsite water/sewer treatment facility and found out afterward that the seller lied and the property didn't have one.  Thousands of dollars in installation and court cost.

Newbie REI, mobiles homes in Southern Cal/SoCal/Orange County?

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