Flipping Manufactured Home

15 Replies

I am brand new to investing and have a question about comps. So I found a 2 bed/2 bath house on an acre of land. There is a place I found where I can put a 3 bedroom (1500 square feet). Cabinets can stay but it needs new flooring, paint, landscaping, and bathrooms. It is a foreclosure and price dropped to 30K. Comps for 3/2 in the area are between 150 and 200, but it is a manufactured home and I can’t find any other manufactured homes that have sold recently in that town. I have to go a town over to find one. Is there a way to comp a manufactured home to a regular home?

@JOHN DALEY

The mobile home has to meet certain criteria for this to happen. If it's still on wheels, then you probably won't be able to comp it to a traditional 3/2 bathroom home. But if it's on a foundation than you probably can compare it to 3/2 baths in the area since it would be considered permanent housing and an insurable mortgage can be taken out on it. 

So does this mobile home have a vehicle title? Or does it have a deed to the land? It has to have a matching title for whatever you're comparing it to.

It does have the deed to the land. It also looks like it is on a foundation in the pictures. I honestly didn’t even know it was it was a manufactured home until it said so in the description. I plan on going out there this weekend. It also has a built screen porch with stairs and a ramp and looks like it has been there for a while.

Originally posted by @JOHN DALEY :

I am brand new to investing and have a question about comps. So I found a 2 bed/2 bath house on an acre of land. There is a place I found where I can put a 3 bedroom (1500 square feet). Cabinets can stay but it needs new flooring, paint, landscaping, and bathrooms. It is a foreclosure and price dropped to 30K. Comps for 3/2 in the area are between 150 and 200, but it is a manufactured home and I can’t find any other manufactured homes that have sold recently in that town. I have to go a town over to find one. Is there a way to comp a manufactured home to a regular home?

 Have done quite a bit with mobile

Flips.  Fix and rent.  Move off.  Move on. 

Personally I would not try to compare to brick and mortar houses.   I would look for a different deal.  But then again I usually go for deals which I believe are sure things 

@Michael Plante If you don’t mind me asking, at what point would you flip a Mobile Home? Would you only flip mobile homes that are in parks?

@JOHN DALEY

Interesting. You may want to look at the public records to check the title and be sure.

I'd usually say, if it cashflows then go for it but another thing to consider is if it's a vehicle title then it may depreciate differently. Something to consider and possibly discuss with your accountant.

@Dave Van Horn thank you for the input! I will definitely look into that.

The key is whether the MH is on a permanent foundation and has it ever been moved? If the property has ever been moved(aside from the manufacture to the site) it will not be eligible for FHA financing. This is key to flipping a MH home. There are few avenues for a retail buyer to obtain financing for a MH other than FHA

Originally posted by @JOHN DALEY :

@Michael Plante If you don’t mind me asking, at what point would you flip a Mobile Home? Would you only flip mobile homes that are in parks?

  

I am in neighborhoods where every house is a mobile

Then I can easily tell what comps are selling for 

Have never done anything in parks 

Originally posted by @Greg H. :

The key is whether the MH is on a permanent foundation and has it ever been moved? If the property has ever been moved(aside from the manufacture to the site) it will not be eligible for FHA financing. This is key to flipping a MH home. There are few avenues for a retail buyer to obtain financing for a MH other than FHA

 We move used homes on to empty lots on blocks with no foundation

and sell to people who purchase with conventional financing

Originally posted by @Michael Plante :
Originally posted by @Greg H.:

The key is whether the MH is on a permanent foundation and has it ever been moved? If the property has ever been moved(aside from the manufacture to the site) it will not be eligible for FHA financing. This is key to flipping a MH home. There are few avenues for a retail buyer to obtain financing for a MH other than FHA

 We move used homes on to empty lots on blocks with no foundation

and sell to people who purchase with conventional financing

With FNMA no longer offering any MH products, buyers are looking at 20% down unless there are local lenders in the area willing to do less. FHA is 3% down. 20% down eliminates the vast majority of retail MH buyers

Originally posted by @Greg H. :
Originally posted by @Michael Plante:
Originally posted by @Greg H.:

The key is whether the MH is on a permanent foundation and has it ever been moved? If the property has ever been moved(aside from the manufacture to the site) it will not be eligible for FHA financing. This is key to flipping a MH home. There are few avenues for a retail buyer to obtain financing for a MH other than FHA

 We move used homes on to empty lots on blocks with no foundation

and sell to people who purchase with conventional financing

With FNMA no longer offering any MH products, buyers are looking at 20% down unless there are local lenders in the area willing to do less. FHA is 3% down. 20% down eliminates the vast majority of retail MH buyers

 Haven’t had any problem selling ours with no agent 

Maybe your market is different

@Michael Plante

What mortgage product and down payment % are your clients finding in your area?

Originally posted by @Greg H. :

@Michael Plante

What mortgage product and down payment % are your clients finding in your area?

 I don’t know

I know they sign a purchase contract with my Atty stating what sort of loan heybare getting he approves it and we close a few weeks later and he wires us our money 

Take a look in FL. 

Mobiles with some land often sell in the 150k to 200k

Maybe you could look them up on Zillow and call a broker or agent there and ask 

@JOHN DALEY First off, welcome to BP. I would highly suggest you put some type of photo on your profile. When tryng to @mention you, there are several John Daleys, without photos, so it makes it hard to know which to choose! If for some reason you don't want your photo, choose a photo that says something about who you are, or ? 

Now to your questions. Manufactured homes that are on a foundation are considered the same as a stick built house. HOWEVER; call a local appraiser and double check with them, and if they're not considered equally, ask why. Manufactured homes, modulars, etc. are factory built homes, built to a pre determined building standard. Manufactured homes may or may not have drywall, etc. 

You might find this helpful too. Defining Manufactured, Modular, Prefab

My nephew remodeled and flipped a manufactured home, and it was a really lucrative deal for him. Due to that, we thought we'd try it, and are actually remodeling a manufactured home that backs up to a State Park, and close to a lot of recreation. It's a very popular area for Vacation Rentals, 2nd homes, etc. On each side of the manufactured house there are very nice stick built homes, of about 2000 sq. ft. beautifully landscaped, etc. The manufactured home was an inexpensive way to begin learning the process in a new state, and area for us, and hopefully it's successful. We have completely gutted it and taken down to the studs, rebuilt the trusses as there were some broken from the snow load, we'll reconfigure the kitchen put in drywall, completely redo the bathrooms, decks, etc. 

Every area is different, demand, supply etc. that drives what prices can be commanded. In areas with a high demand and little supply manufactured homes will be much more marketable than areas that have an oversupply of housing inventory, low prices, etc., and that's why it's important to do your homework. 

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