Single-wide trailer doing good money on Airbnb

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Single-wide trailer doing good money on Airbnb

Cody Dastrup
Member since 2020 · 21 posts · 2 votes

Background: I paid $370k for a 4bdr 2 ba in April of 2021 and got THE last short-term rental permit in the city. My mortgage is 1,700 per month and YOY I just did 54k (May 21' to May 22') in total revenue. My home is now worth $500k+ as real property and with the value added by the STR permit, probably worth $600k+ based on comps and my local realtor(great small market+highly regulated by city).

A for sale by owner just came up that really interests me. Very nice 900 sqft single-wide trailer on .15 acres that also has a STR permit that is transferable to the new owner. My first thought was, dang, it's a trailer. Then I got the P&L sheet from the current owner and it is doing 37k between Airbnb and VRBO! It is listed at $265k. Numbers all work out. The question I have is, how would you finance this? Any chance this appraises/will the appraisal take into account their previous rental income? 

Would love some advice from the community as this will only be my 2nd STR purchase! 

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Mark Brogan
Investor · Roanoke, VA · Member since 2012 · 1k+ posts · 374 votes
4y

first thing that everyone says is they are hard to get financing for but they never say unless you know where to look
21st century mortgage, Vanderbilt mortgage are 2 that I know of I'm sure there are many more, mobile homes are all we do and I'm sure you would do great with this one
good luck @Cody Dastrup

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  • Kevin Luttrell
    Lender · Orange County, CA · Member since 2019 · 299 posts · 255 votes
    4y

    Sounds like a sweet deal, but yes like you alluded to you will likely have trouble financing it. Most lenders don't like dealing with manufactured homes in general. Fannie Mae allows single-wides only if they are less than 10 years old, and even then, it will be hard to find a lender willing to lend on it. 

    My suggestion would be to call around some local community banks and credit unions. 

    0Reply
  • Michael PorchePro Member
    Rental Property Investor · Boise, ID · Member since 2017 · 220 posts · 101 votes
    4y

    Whats up @Cody Dastrup. 1st of all, congratulations on your work thus far! Awesome accomplishments. So there is a few things to consider here you need to be careful of.

    1. Your single-family residence of 4/2 is not a commercial property. So your "permit" or added income doesn't provide actual appreciation value. The reason why is because appraisers work on a comparable sell model for ALL residential homes (1-4 units), not an income/caprate model like with commercial properties.
    2. However, that doesn't mean someone will pay more for it because it has an STR Permit. Someone might seem more valuable because of that but if they use a loan that still depends on the lender and appraiser, and they don't take into consideration income or permit in its value.
    3. Trailers are hard to get financing for. you have to find a mobile home financing entity or something like that. You should offer if the seller is willing to carry the note on the property.
    1Reply
  • Rachel H.
    San Antonio, TX · Member since 2009 · 3k+ posts · 1k+ votes
    4y

    @Cody Dastrup You could try asking for owner financing or bringing in a partner or working with a private lender on the deal. One thing to look into is the maintenance and upkeep of the mobile home. There could be items that need to be repaired and/or have deferred maintenance. Hope that helps! 

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  • Mark Brogan
    Investor · Roanoke, VA · Member since 2012 · 1k+ posts · 374 votes
    4y

    first thing that everyone says is they are hard to get financing for but they never say unless you know where to look
    21st century mortgage, Vanderbilt mortgage are 2 that I know of I'm sure there are many more, mobile homes are all we do and I'm sure you would do great with this one
    good luck @Cody Dastrup

    2Reply
  • Cody Dastrup
    OP
    Member since 2020 · 21 posts · 2 votes
    4y

    @Mark Brogan 21st century is so far my best option. I reached out yesterday and was told 10 year - 6.9% interest - 20% down. I don't HATE this, but 10 year term is short. $2700 payment on a 200k loan is a little heavy and will make it hard to cashflow. Looking to find something that is higher interest and longer terms (21st Century isn't flexible at all). I was told Mountain American Credit Union out of Utah may lend on this. Will be trying them next!

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  • Cody Dastrup
    OP
    Member since 2020 · 21 posts · 2 votes
    4y
    Quote from @Rachel H.:

    @Cody Dastrup You could try asking for owner financing or bringing in a partner or working with a private lender on the deal. One thing to look into is the maintenance and upkeep of the mobile home. There could be items that need to be repaired and/or have deferred maintenance. Hope that helps! 

     @Rachel H.it's in great shape as it's being rented out currently as a STR. Looking into a few options, but nothing that is jumping out at me from a financing standpoint right now

    0Reply
  • Cody Dastrup
    OP
    Member since 2020 · 21 posts · 2 votes
    4y
    Quote from :

    Whats up . 1st of all, congratulations on your work thus far! Awesome accomplishments. So there is a few things to consider here you need to be careful of.

    1. Your single-family residence of 4/2 is not a commercial property. So your "permit" or added income doesn't provide actual appreciation value. The reason why is because appraisers work on a comparable sell model for ALL residential homes (1-4 units), not an income/caprate model like with commercial properties.
    2. However, that doesn't mean someone will pay more for it because it has an STR Permit. Someone might seem more valuable because of that but if they use a loan that still depends on the lender and appraiser, and they don't take into consideration income or permit in its value.
    3. Trailers are hard to get financing for. you have to find a mobile home financing entity or something like that. You should offer if the seller is willing to carry the note on the property.

     @Michael Porche yea, the appraisal is a whole different issues. Luckily I have the resources to throw 150k+ at this, if needed and so it may come down to (if I can even find financing) that this appraises at like $175-200k. If I can get there, I can make up the difference, I just need to get close to the $200k appraisal number if possible and get somewhat favorable terms on a loan. Seems impossible right now, but I'll figure it out! 

    @Michael Porche

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  • Cody Dastrup
    OP
    Member since 2020 · 21 posts · 2 votes
    4y
    Quote from @Kevin Luttrell:

    Sounds like a sweet deal, but yes like you alluded to you will likely have trouble financing it. Most lenders don't like dealing with manufactured homes in general. Fannie Mae allows single-wides only if they are less than 10 years old, and even then, it will be hard to find a lender willing to lend on it. 

    My suggestion would be to call around some local community banks and credit unions. 

     @Kevin Luttrell I may have found one! Mountain America Credit Union out of Utah apparently lends on single-wides. We shall see what they say!

    0Reply
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