House Hacking for Mobile Home Parks?

Question

I'm a student just getting into this field and I have a lot of questions.

For instance could you theoretically house hack a mobile home park? Say you live in one of the mobile homes, could you use the principles of house hacking to pay off your loan if you used one?

Or another situation, say you bought a home with a few acres of empty land, you put a mobile home park on the back whenever you move in. Could you still pay the 3.5% down and use the cash flow from your mobile home park to pay off the mortgage and live for free?

John Litz · Answer

Your mixing strategies up. Residential lending is not the same as commercial lending. Commercial is going to be very difficult to find a 3.5% down. It’s not an FHA loan. Commercial sure you could live there it just reduces the cash flow from the property but allows you to reduce or eliminate your biggest expense. But the lender will want to see all units performing not you living in one for free. House hacking doesn’t fit into their analysis. House hacking has many flavors but commercial isn’t typically one of them.

Rick Albert · Answer

All house hacking is you living someone on the property you rent out the rest of it (rooms or units). Anything is a house hack.

If you are thinking of buying an entire mobile home park, you are buying more of a business rather than a single property. Different world with different guidelines. In theory maybe you set up an LLC and go through the traditional route of buying mobile home parks but then you are "renting" from the LLC.

Jordan Moorhead · Answer

@Luke Mertz theoretically you could househack it if a commercial lender was ok with you living there but most aren't and you lose a lot of the benefits of househacking because you'll typically need to put 20-30% down with a bank. The only way I see around this would be seller financing if you could find it.

On buying land and building a mobile home park the FHA loan won't cover raw land because it's meant for a residence and even if you had the raw land building an MHP is extremely difficult to due to most anywhere not wanting them around, the zoning being hard to come by and the cost being very high

Aaron Zimmerman · Answer

I suppose you could house hack anything. The basic idea is that the purchase of property reduces your housing expense. You could buy a 10 lot mobile home park and live on one pad and rent out the others. The goal with most mobile home parks is to rent out the land and the resident owns the homes. That way there's more of a vested interest in keeping the property nice.

with that said, there'd be a variety of financing considerations associated with this as it'd likely be less favorable financing than a 3-5% down payment/30 year fixed. You'd be entering in the commercial realm which has its own financing