I'm looking at a manufactured home on a permanent foundation for 68k maximum on a short sale. Leary because I don't know about these homes. Previous sales have been for 55 in 95, 75k in 01, 51k in 05 and 228k in 06.
rental comps in area are 1200 for same BD/Bths and sq footage, but for real homes. You can't really tell its not real, it is a stucco finish. I've read one good thread on here about non permanent foundations, but none about this situation.
I'm going to look into financing options. I'm interested in an interest only option 30 year fixed if possible as well as options for pulling out current equity in my home for use as a down payment. HELOC, 2nd or refi are my options I suppose, as well as cash, however it will all but deplete me to pay for it in cash. I have about 60K in equity.
To me this sounds like a great deal. But not being familiar with anything, much less a manufactured home makes me reluctant. It feels good though. This will be my first investment house.
Also, I am really thinking of going in with someone (I trust) to lessen the risk. They have handyman skills and money. I was going to buy the house and put them on title. My current home doesn't offer me a write off because the interest is not enough. How should I deal with the taxes and a partner in this case.
First, I'm assuming that you're talking about a double-wide and that you are talking about buying the land also. If so, they can make excellent rentals if bought at the right price. In my experience, there is no difference in rental rates between a stick built house and a doublewide on a permanent foundation.
The problem with double-wides and other manufactured houses comes if you want to sell them. They are much harder to sell than stick built houses and can be very hard to finance . So, if you're going to buy for a long term rental and you KNOW that you will hold it for a long time, then they can be a great deal. If you think you might sell in a few years, I'd pass.
Of course, like any other rental, you need to buy at a significant discount. The $228K in 2006 is b.s. and I would omit that from your consideration of the value. My suggestion would be to pay no more than $60K for it, if you can determine that $60K is a significant discount to the actual market value.
thanks michael, 60 is exactly what number I came up with . I need to make a distinction though. This is not a mobile home. This home looks just like a house, in fact its stucco and you can't tell the difference looking at it. When you say double wide your are talking about a mobile home right?
I just got done looking at comps for this "manufactured home" and I seel that all 57 are rectangular mobile homes listed in the "manufactured" section of MLS. This house I'm looking at is listed in the residential section of MLS, but says manufactured in the description. could anyone tell by just looking at a picture. I'll see if I can put a pic on here or somewhere if you would look at it to see what I mean.
here is a link to a photobucked pic of the house;
FYI Brian - You can create galleries here on BP in the future if you want to share pics of properties.
It looks like a doublewide to me. The 3-12 pitch roof is a dead give away. You can confirm that it's a doublewide by looking in the crawlspace. If there are steel I-beams under there, it's a doublewide. If there are no steel beams, it's probably a modular.
Here in Ohio, doublewides are considered real estate if they are on a permanent foundation and the title to the doublewide is surrendered. It may be similar in your area. At any rate, doublewide or not, I think it could be a good deal at $60K.
thanks, I will use the gallery next time. Your advice is appreciated.
Michael, you say to buy at a significant discount to market value. What percentage below market value should I be trying to get any property for? Does it vary?
Of course the numbers must make sense and the cheaper the better, but I'm wondering at what percentage would you pass up a deal where the numbers make sense. I understand the answer isn't probably standard, but do you have any rules you go by?
I insist on a MINIMUM 30% discount (to market value) in my deals. In the past couple of years, I haven't paid more than 50% of the market value, due to the extremely risky market.
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