I'm thinking of buying a mobile home as an investment, it's for sale by owner. The seller is asking $50k for the home. The current mortgage is around $500/mth and the lot rent is another $500/mth or so. In total the payment for the home is just under $1100/mth. I'm trying to figure out a clever way to acquire this property that benefits both the buyer and I, looking for a win/win situation. I don't really want to finance this myself if I can help it. The property is a 3 bedroom, 2 bath home. Another property in the same mobile home park is renting for $1495/mth. Does anybody have any suggestions? Is this a good buy? Looking for suggestions or advice on how to acquire this property.
@Lewis G. the limited knowledge I have with a mobile home is they are hard to finance. here in Pittsburgh you get a title like you would a car. A majority of banks wont lend money on Mobile homes. I think the first thing you would want to research is can you finance such an investment. Secondly make sure you can rent out a unit in the mobile home park. Some parks in my area dont allow it or the owner of the park has to see and approve all tenants first. your holding costs may be high so factor that into your vacancy numbers.
@Alex Deacon. Thanks for the advice. I'll check with the mobile home park about renting out a home in their park. As far as financing, I'm going to see if the seller will carry. Maybe I'll propose a partnership or something where I can help the owner(s) pay if off by getting the property rented for them. I hadn't thought about holding costs.
It is not a good deal. A mobile is a depreciating asset and requires a higher level of maintenance than a normal home. You will be lucky to break even on the rental income and will lose money on the home. Additionally the class of tenant is generally difficult to manage and maintaine.
Originally posted by @Jacob Caddick :
Thanks, I had the same thoughts about the mobile home park making all the money on lot rents too.
Most parks will not allow you to sublet their lots. Also-if they do, they will hold you accountable for the lot rent if your tenant fails to pay. You would want to make sure you can work out an arrangement with the park before considering this. Also-the price for this one seems exceptionally high for your first mobile home deal. You could most likely generate the same cash flow from a much less expensive unit.
Originally posted by @Marc Faulkner :
After thinking it over and running numbers, I decided not to go through with this deal. I had to remind myself there is a reason this person is trying to get out of this mortgage. Thanks to everyone who replied.
No one has yet to ask what the year of it is. That’s critical. If it’s a 2017 for $50k that’s pretty good. If it’s 1997 that’s awful. I like mobiles. Buy a newer one that’s repo’ed for 20-30k , put it on your own land and sell it before it’s 20 yrs old.
As mentioned above, you could have trouble subletting it and you need to discuss that with the park before you buy it. I would not walk away from a deal like this, although I would not take this deal.
Eventually you’ll find an owner Who cannot make lot rent , is facing eviction and absolutely must sell. Then you can find a deal. If they can not afford $500/mo lot rent, they won’t be able to afford to move it.
I like newer mobile homes because they came from a factory and you can typically reply on the electrical, plumbing and systems.
you don’t have to deal with asbestos, lead pipes, old furnaces, knob and tube etc.
They’re cheaper than stick built and get about the same rent in my area.
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