Manufactured home BRRR worth it or fix and flip?

Question

Or neither? We’re pretty new to the investment world and our agent has come across some manufactured homes in a great location for rentals. We never thought about manufactured because of the depreciation. Just wondering what your thoughts and experience is. Thank you!

Rachel H. · Answer

@Jessica Lamont It can definitely work if you're familiar with the market. It does take time to get to know values and the supply and the demand in the area, just like any other area of real estate investing.

Personally, I've been investing in mobile homes since 2007. It's definitely had its ups and downs. Before that, I had been investing in single-family homes as a wholesaler and buy and hold landlord. Overall, the mobile home investing business has been pretty profitable.

Feel free to send me a DM, if you have any questions. Hope that helps!

Eliott Elias · Answer

Don't hold manufactured homes, it's like holding a car.

Jared Hottle · Answer

I have seen some people have luck buying them, fixing them up and sell them on contract. Try to get your investment out in the downpayment and make passive income on the monthly payment.

Nathan Gesner · Answer

Manufactured homes can be real cash cows, but they do have unique maintenance issues. I bought a crappy trailer for $3,000 it paid for itself in 10 months, then produced thousands in cash every year for four years, then I sold it for $4,000. However, it had some difficulties along the way that made me decide that wasn't my cup of tea.

Jeremy Horton · Answer

Depends on the deal for me

I almost did a deal on some land that had one trailer - only reason I was going to do the deal is because I could add 4 more trailers. I'm personally not into buying trailers unless I have a plot of land that I can generate some amazing cashflow with.

I much prefer a house on a slab that will appreciate in time. I'll have some maintenance but I'll never have to replace the house, unlike with a trailer. I'm not sure what the tax rules on trailer are either.

It really depends on the land and the zoning when it comes to trailers for me. I need unrestricted/MFH etc type zoning and room to add additional trailers and the sewage etc that goes with it. That's the deal for me, the land, zoning and location. I could do one trailer but we'd be talking perfect location and amazing cashflow, and then again I guess I'd really be buying for the location

Nathan Grabau · Answer

I would think about owning a manufactured home, if you do not own the land and pay a lot rent, almost like owning an RV. Can you make money renting it? Yes... Can you renovate them and increase their value? Yes... Does it increase in value over time? Probably not. If you do own the land, and it is a manufactured home on land you own, this is different, and you have the opportunity to have appreciation that you capture, as opposed to appreciation that is captured outside of you favor in the way of increased lot rent.