Investor · Denton, TX · Member since 2016 · 31 posts · 5 votes
I went out on my first real Driving For Dollars trip looking for properties to wholesale and came across a neighborhood of old and run down mostly manufactured homes (on brick). The thing about this neighborhood is it is not a mobile home park, the lots are big, and there are a few lots with very nice brand new brick homes owners have built, and others with older homes as well. I am planning on marketing to this neighborhood but wondering if investors buy these type of homes? Looks like they would need to get torn down and a new house built. It's in an area that's growing and in high demand. Any feedback would be awesome! Thank you!
Rental Property Investor · Clarkston, GA · Member since 2012 · 2k+ posts · 1k+ votes
9y
Hi Amy, New folks under appreciate the costs to build new vs buying existing foreclosed at 1/2 or less of replacement cost. An area has to be extremely hot for building new investment property to make money.
I buy double wides on their own land (not in parks). yr 2000 or newer, low rehab for $25k or less. Yes thats right thats all I'll pay. Ocupant owners of mobile homes have way too much debt to buy even at just their un paid balance. Back in early 2000's banks lent $100k or more to build those neighborhoods. There's still over $50k of debt under most of those homes. I only buy after they;ve gone through foreclosure.
I'd never build a nice site built home in a crummy neighborhood unless its some freak situation outside San Francisco where in a few years the junkers will be torn down and $1M (small) homes will be built. I suspect there's so much vacant land in TX this model just won';t pan out. :)
For low $$ deals I suggest marketing for low equity nice home sellers then offer lease option or subject to to control the property. Lots of resources here on creative deal types that take little cash. I've found all deals, cheap junker mobile homes, to really nice flip houses take almost the same human hours. Why waste one's time on cheap deals where the profit / exit strategy is iffy. JMHO.
A sophisticated way to profit if you truely believe this area is in the path of progress is to contact owners and offer to buy an option to buy at some present value for as many years as they'd agree to for a few $k. Maybe $3k. Depends on each owners personal situation. Its dead money waiting for progress but its all you have at risk.