Lender · San Diego, CA · Member since 2022 · 235 posts · 94 votes
I'm looking to buy my first property and house hack in San Diego soon. I know it's hard to cash flow in San Diego but appreciation can make it work. However I was wondering if anyone has tried house hacking a manufactured house? I just finished college and I'm 21 so I don't have a lot saved up right now, so if I want to buy sooner I was thinking this could be a good option. Has anyone tried this or have any advice on how this would look for a house hack?
In general manufactured homes do not appreciate at the same rate as stick built. So you will get poor initial cash flow and reduced appreciation.
Use an FHA loan (up to 96.5% LTV) or other high LTV loan option to purchase a traditional home to owner occupy. If you can a detached duplex is ideal option as the rent on the non owner occupied unit will help your income qualification.
Bonus if you can add a value add. Value adds take effort and are much less passive than purchasing a property without the value add, but the value add can provide a means to acquire sweat equity. It can allow you to purchase a bigger property and/or better location than you could achieve without the value add.
Manufactured homes are much like "stick built" homes if the underlying land is included in the purchase. A manufactured home is permanently attacked to a foundation. Thus location (land) is where the value is at. If you're buying real estate with the manufactured home then the home should be appealing to subsequent buyers and thus should appreciate like any other stick built home. There are many in the more outlying cities of San Diego and most people wouldn't know the difference.
There are many manufactured home parks in San Diego County where you don't own the underlying land and you'll pay a space fee/HOA fee up to $2000+ monthly. Even many of those homes, where you don't own the underlying land, appreciate since it is location, location, location that will drive value. Carlsbad and Vista come to mind for me.
In general manufactured homes do not appreciate at the same rate as stick built. So you will get poor initial cash flow and reduced appreciation.
Use an FHA loan (up to 96.5% LTV) or other high LTV loan option to purchase a traditional home to owner occupy. If you can a detached duplex is ideal option as the rent on the non owner occupied unit will help your income qualification.
Bonus if you can add a value add. Value adds take effort and are much less passive than purchasing a property without the value add, but the value add can provide a means to acquire sweat equity. It can allow you to purchase a bigger property and/or better location than you could achieve without the value add.
Good luck
Thank you for the advice! I am definitely planning to value add in some capacity so I'll keep that in mind. I am probably going to use a 3% down conventional loan, I know a manufactured home is cheaper but I understand it may not be worth it considering low appreciation then - thanks!
Manufactured homes are much like "stick built" homes if the underlying land is included in the purchase. A manufactured home is permanently attacked to a foundation. Thus location (land) is where the value is at. If you're buying real estate with the manufactured home then the home should be appealing to subsequent buyers and thus should appreciate like any other stick built home. There are many in the more outlying cities of San Diego and most people wouldn't know the difference.
There are many manufactured home parks in San Diego County where you don't own the underlying land and you'll pay a space fee/HOA fee up to $2000+ monthly. Even many of those homes, where you don't own the underlying land, appreciate since it is location, location, location that will drive value. Carlsbad and Vista come to mind for me.
Thanks for the input! So you would suggest a manufactured home with the land attached, but even without the land, it could be a beneficial investment?
Thanks for the input! So you would suggest a manufactured home with the land attached, but even without the land, it could be a beneficial investment?
In my opinion, even without the land it can be a beneficial investment depending on location and community amenities. If the home is on lease land then you'd have a rental fee and/or an hoa fee commensurate with amenities. I can only speak of some of the communities I’ve run across in my lending business such as Carlsbad (beach), Vista (best climate in USA per??), San Marcos (close to coast) and Ramona (rural) that have appealed to me. Other areas I can’t speak to.
I agree with a lot of comments in the replies. My main takeaway is, underlying land is of value. So if it is a manufactured house sits on top of a land that you'd own ( and possibly later sell to future buyer), that will be the best option.
Speaking of manufactured housing, FYI there are a few companies ( up here in Vista as well) that produce panel homes . Ie, they make sections of houses in their factory and crane them in on the final location. all their houses sit on slab to its technically not a "manufactured mobile home", they are usually fast in deployment ( usually 4 to 5 months) but cost wise may not be as cheap as traditional manufactured housing.
@Mary Ainsworth I would say its worth it. If you pencil out the numbers to cashflow once you move out I would say its worth it! Housing is so constrained there I would imagine you get a decent tenant pool to pick from.
I agree with a lot of comments in the replies. My main takeaway is, underlying land is of value. So if it is a manufactured house sits on top of a land that you'd own ( and possibly later sell to future buyer), that will be the best option.
Speaking of manufactured housing, FYI there are a few companies ( up here in Vista as well) that produce panel homes . Ie, they make sections of houses in their factory and crane them in on the final location. all their houses sit on slab to its technically not a "manufactured mobile home", they are usually fast in deployment ( usually 4 to 5 months) but cost wise may not be as cheap as traditional manufactured housing.
Thanks Manraj! That is super good to know, I'll look into the panel homes a bit more, could be a great option :)