I thought manufactured homes (you mean mobile homes correct) are not treated the same as real estate. They are treated like a car in that they are personal property and are much harder to get loans for, since they depreciate so quickly. If the structures are a normal house just pre-fabricated then they would count as normal real estate. If it is possible to still "pick them up and move" with wheels then I would say they are treated like a car.
Those expenses numbers seem insanely low, or is that just for the PM/landlord unit?
If these are mobile homes, what year were they manufactured? Older homes aren't worth much and are sometimes worth hardly anything.
I am not sure how 3 double-wides equals 10 units, can you explain that? 3 double-wides converted back into duplexes is 6 units, how are they setup?
After further discussion with the broker, I discovered it is 9 units total, not 10. Each double wide has 3 - 1 bd/1bath units. The manager lives in one and only pays $400/month. However, the manager is compensated for his work managing the property and has been doing so for the past 6 years. All the double wides are permanently attached to the land...so they’re not necessarily mobile at the moment, but they can be if the owner wanted to for some reason. The expenses I included are some of the basic ones and are for all 9 units. However, I ran my own calculator and included all other expenses. That is how I came up with the approximate $1,000/month cash flow. However, now that I know the manager is compensated separately and already pays rent on one of the 9, not 10, units, I’m much more skeptical about this sort of investment. Cash flowing $1,200/month can somewhat make up for a depreciating property, by I think cash flowing only $500/month doesn’t. 5-10 years from now I could potentially be upside down on a loan that is backed by very old manufactured homes (they were built in 1989).
Any further thoughts or questions I may not have thought of are much appreciated.
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