C/D Class rental portfolio purchase

Tyner, NC · Member since 2017 · 1 post · 0 votes

Looking for some feedback, opinions and any advice. I have a friend that is purchasing a portfolio of 14 properties from an investor that is getting out of the biz due to health reasons. There are 14 properties that are being purchased for a total of $175,000. They are all currently rented with most current (there is one that is not). The yearly income is $90,000+. These are single section manufactured homes and one multi section. The conditions is fair of most of them. Im not good with this type of rental, my rentals are ones that I would choose to live in myself. This seems like a complete no brainer deal and I know it will be work, repairs and cycling in better tenants. Just want advice, feedback, suggestions from others that excel at this type of rentals

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Stuart UdisPro Member

Attorney · Philadelphia · Member since 2018 · 2k+ posts · 3k+ votes

The only thing that's a no brainer is your friend will be looking to sell this garbage with his own health problems to deal with a few years from now.

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Rosina Persaud
Member since 2023 · 182 posts · 62 votes
5h
At $175,000 for 14 doors, the price is not what I'd underwrite — the operating cost is. We run 236 single-family doors in Memphis, mostly Section 8, and in C/D product the rent number is never the hard part. Turnover, vacancy, and repairs are.
A $90,000 gross rent roll means nothing until you verify what's actually collected each month, what's past due, and what the one vacant unit needs to be rent-ready. Our turns run on a 21-day scheduling system because every extra vacant week eats the return faster than any repair bill. Turnover and vacancy cost more than repairs, so budget the turns first and the rent second.
Screen on verified repeatable income and whether the story matches the paperwork, not just a credit score. And line up contractors in small paid steps before something breaks, not after. If the collections are real and the turns are tight, the math can work — but verify the collections first.
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Harrison C.
Member since 2017 · 127 posts · 65 votes
4h
$90,000 a year on a $175,000 price is a gross return over 50%. Numbers like that usually mean one of three things: the rent is overstated, the homes are close to the end of their life, or the land is not part of the deal. I'd settle those before anything else.
Who owns the ground. If the homes sit on lots the seller owns, the land is most of the value. If they sit in a park paying lot rent, your friend is buying 14 depreciating boxes and a rent bill that can go up every year.
The age of each home. Anything built before June 1976 predates the HUD code, and those are hard to insure and finance, so most of them only ever sell to another cash buyer.
The title on each one. Some are still titled like vehicles and some have been made part of the land. That changes how they transfer, how they're taxed and what a lender will touch.
Then verify the rent from 12 months of bank deposits, not the rent roll, and walk every home looking at floors around the bathrooms, the roof, the water heater and the skirting.
A seller leaving for health reasons is often open to carrying part of the note, which also tells you how much they trust their own numbers.
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Stuart UdisPro Member
Attorney · Philadelphia · Member since 2018 · 2k+ posts · 3k+ votes
4h
The only thing that's a no brainer is your friend will be looking to sell this garbage with his own health problems to deal with a few years from now.
[email protected]
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Daniel Jung
Member since 2026 · 91 posts · 31 votes
4h
Van-Dee, the price is the least important number here. Underwrite the deal on collected rent, not the rent roll: twelve months of bank deposits, a rent ledger for every tenant, and who is behind. Price the one vacant unit into the plan and walk it before closing.
Walk every home, not a sample. In this product the expensive surprises are soft floors, old plumbing, and roofs past their life, and none of them show on a rent roll. Price each home separately in the purchase agreement, because one flat price makes insurance, taxes, and a later sale of a single home far harder.
Line up the manager before closing, not after. Fourteen scattered doors need one person who can collect, turn units, and enforce the lease every week. If the collections check out and the turns are budgeted first, the deal can work; if either is shaky, walk away.
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Joe Waltman
Member since 2026 · 10 posts · 2 votes
3h
Van-Dee, at $175K for $90K a year, the first job is proving the $90K. Ask for 12 months of bank deposits, not just a rent roll, and match each deposit to a unit and a lease. A seller winding down may have let collections slide.
Then three manufactured-home checks:
1. Land. Do the lots convey, or do the homes sit in a park with lot rent? That changes the whole deal.
2. Titles. In North Carolina a home that hasn't been converted to real property carries a DMV title. Make sure all 14 are in the seller's name and transfer at closing.
3. Age. Homes built before mid-1976 (pre-HUD code) can be hard to insure or finance. Get insurance quotes before you sign.
Then walk every unit and price roofs, floors, plumbing, and septic.
I own a 5-unit and a rental house.
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Erik EstradaBusiness Member
Lender · Los Angeles, CA · Member since 2022 · 7k+ posts · 1k+ votes
1h
Van-Dee, the replies above cover the diligence well. One thing worth sorting out now is the financing, because it decides whether your friend can ever pull cash back out of this.
1. Which homes are financeable. Most rental lenders only lend on manufactured homes that are permanently affixed, titled as real property, and sold with the land. Homes on a DMV title or sitting on park lots usually have to be bought with cash, and they stay that way unless the title is converted.
2. Loan size. At about $12,500 a home, each one is below the minimum loan amount many lenders set. A single blanket loan across the qualifying homes is usually the realistic route, not 14 separate loans.
3. Buy now, refi later. If your friend pays cash and fixes the homes up, a cash-out refi can be based on the new appraised value rather than the $175K price. Keep the settlement statement, repair invoices, and before and after photos so the work can be documented.
If the land and titles check out, I'm happy to run what a refi could look like on the homes that qualify.
Erik
[email protected]818-269-7983
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