Hi everyone, I am fairly new, now hunting for my 4th investment home. I only have financed homes and did BRRRR and never purchased with cash before....... Also I have never purchased mobile/manufactured homes therefore need advice. Out Florida market is crazy so i am just trying to grab a deal if it's good.... I think it's good.....They have a mobile home for sale for only 55k in good school district,decent condition with long term tenant in place for 800/month rent( insurance and tax will run me $100 a month). I fell like it will be a decent profit but afraid to give up so much cash thinking it could be a down payment for something better in the future, just looking to see some thoughts on my fellow experts. Thanks in advance....
Rental Property Investor · Brandon, SD · Member since 2015 · 1k+ posts · 1k+ votes
4y
Hi Julia,
It's hard to get a loan on a mobile home. Many of them have very little value. You are essentially purchasing a box that produces rental income. Are you purchasing the land as well? Without the land you should run away. Sounds like you are planning on paying cash. Sinking that much money into it decreases your return. At $800 a month, less one month for vacancy, 15% for repairs, 8% management (don't forget to pay yourself if self-managing), tax and insurance, you have $5,424 a year or 9.8% cash on cash return. The numbers are decent. The downside is you'll have a hard time pulling the money out of the property for the next investment (e.g. a line of credit or a finance) and will have to rely on the slow build of the annual cash flow.
Rental Property Investor · Brandon, SD · Member since 2015 · 1k+ posts · 1k+ votes
4y
Hi Julia,
It's hard to get a loan on a mobile home. Many of them have very little value. You are essentially purchasing a box that produces rental income. Are you purchasing the land as well? Without the land you should run away. Sounds like you are planning on paying cash. Sinking that much money into it decreases your return. At $800 a month, less one month for vacancy, 15% for repairs, 8% management (don't forget to pay yourself if self-managing), tax and insurance, you have $5,424 a year or 9.8% cash on cash return. The numbers are decent. The downside is you'll have a hard time pulling the money out of the property for the next investment (e.g. a line of credit or a finance) and will have to rely on the slow build of the annual cash flow.
San Antonio, TX · Member since 2009 · 3k+ posts · 1k+ votes
4y
@Julia Mozden It will depend on a number of things. If you're in the Florida market, one thing you need to be aware of are natural disasters such as hurricanes which tend to happen more on the coast. It's best to look into additional insurance coverage before going into the deal just in case.
Other than that, I'm not sure if the home is in a mobile home park or out on a piece of land. If in a park, you'll have to make sure it's OK for you to do business in the community as an investor.
If everything checks out, your numbers work and you feel comfortable about the area and the market, the next step is to move forward on the deal before someone else buys it. Everyone's comfort level and deal requirements are different.
Also, just make sure you have cash reserves just in case you run into any repair issues (such as deferred maintenance) or vacancies.
It's hard to get a loan on a mobile home. Many of them have very little value. You are essentially purchasing a box that produces rental income. Are you purchasing the land as well? Without the land you should run away. Sounds like you are planning on paying cash. Sinking that much money into it decreases your return. At $800 a month, less one month for vacancy, 15% for repairs, 8% management (don't forget to pay yourself if self-managing), tax and insurance, you have $5,424 a year or 9.8% cash on cash return. The numbers are decent. The downside is you'll have a hard time pulling the money out of the property for the next investment (e.g. a line of credit or a finance) and will have to rely on the slow build of the annual cash flow.
Thank you for you reply! Yes it comes with the land as well fortunately! I was always hesitant buying mobile/manufactured but in this market I was having hard times buying anything I can afford that will produce a decent cash flow with mortgage rates and prices they are right now in Florida lol
@Julia Mozden It will depend on a number of things. If you're in the Florida market, one thing you need to be aware of are natural disasters such as hurricanes which tend to happen more on the coast. It's best to look into additional insurance coverage before going into the deal just in case.
Other than that, I'm not sure if the home is in a mobile home park or out on a piece of land. If in a park, you'll have to make sure it's OK for you to do business in the community as an investor.
If everything checks out, your numbers work and you feel comfortable about the area and the market, the next step is to move forward on the deal before someone else buys it. Everyone's comfort level and deal requirements are different.
Also, just make sure you have cash reserves just in case you run into any repair issues (such as deferred maintenance) or vacancies.
Hope that helps!
Thank you for you reply, ugh yes I am always scared of that hurricane season=( Yes, home is on it's own land and area is good and safe, I wish it wasn't a mobile home! But in this market , I am trying to be creative with my investment strategies lol
Insurance Agent · Nationwide · Member since 2014 · 2k+ posts · 1k+ votes
4y
@Julia Mozden It is going to be difficult finding insurance coverage for this. Foremost and American Modern are usually the only ones willing to consider rented Mobil homes. May investors in FL who own these as rentals will only carry Liability as the Property coverage in FL is too much. Good luck putting it together.
Groveland, FL · Member since 2017 · 7 posts · 1 vote
4y
I saw that you are in Jacksonville area… This area has been becoming very hot for Airbnb. Have you thought about running those numbers? Not sure how far from the beach this is or the convention centers, but if you deck it out right inside the mobile home people won’t care and they will come for the experience.