All Forum Posts by: James Mc Ree

I recently took an interest in researching mobile homes.  I am looking at "not new" homes and feel I am missing something.  Here is an example to illustrate.

There are several 3 bedroom, 1 or 2 bath mobile homes in the county listed for $20,000 or so that appear in good condition.  The surrounding area has 3 bedroom townhouses of approximately the same sqft renting for $1,200/month.  Does a 3/1 mobile home rent for about the same as a 3/1 townhouse in the same area?  I realize there are a bunch of qualifications to anyone's answer, such as "depends on condition, area, etc."  I am just trying to get a feel for what to expect in general for mobile home rents compared to brick and mortar real estate.

thanks, Jim.

I think your kitchen looks fine as is.  I like the wood cabinet look.  If you felt like you had to do something, consider a granite countertop.  I can't tell from the picture if the countertop is a "plain vanilla" countertop or not.  A countertop upgrade might give the kitchen a little more pop, but probably won't be of any real practical value in renting faster or for more.

Check with Clifton/Aldan to ensure the basement can be a living space.  Some municipalities specifically exclude basements as living areas.  Others require them to be at grade and separate from combustion (furnace, water heater).

It looks like bulldozer bait.  Consider it for a tear-down/rebuild, but probably not a fix-n-flip.  As a beginner, think "easy" unless you possess strong renovation skills.

There is always someone looking for a place to live.  I recommend you don't limit yourself to Section 8 as a good tenant is a good tenant, regardless of any assistance they get.  It will likely be hard for a Section 8 tenant to afford a new build, but not impossible.  Check the Section 8 rents for your town to be sure they pay what you are thinking of charging if you are intent on going with Section 8.

I model replacement of each system/appliance within a 15 year hold period (my timeframe).  I don't try to build that into a monthly cost, but rather spread it out over the 15 years.  I also add $1,000 for minor repairs.  I have 3BR townhomes.

I charge myself 75% of 1 month's rent per year for vacancy.  This is pretty conservative as it presumes turnover 1-2 years.  I have done better than that rate, but it helps to avoid disappointment.  You will also pay a realtor 1 month rent commission if you rent via a realtor.

The 50% rule is a very broad assumption that assumes you know nothing about the property.  You can usually get a better estimate if you know what the property has and can get a feel for expense timing if you know the age and condition of the systems.  That is why I prefer a line-item approach.

Your model should show you the cost of tenant turnover: commission + vacancy + repairs + utilities + maintenance (lawn/ice).  This helps when you are trying to decide to raise the rent at risk of losing the tenant or when to evict.

The answer will vary a bit depending on the amount of the loan and the property.  Here is a ballpark if you are looking for numbers:

1% - Origination fee

$$$ - Points to buy down rate if you choose to do so

$600 - Appraisal (you might get one with a cash buy, but it is required for a mortgage)  More $$$ with complexity.

$$$ - Flood insurance if required (optional with cash buy, varies with amount of insurance and flood zone)

$200 - Mortgage recording (varies depending on # of pages and county)

Your Mom could offer to buy a 2 foot easement from the neighbor to keep the fence where it is and not cause a problem with the addition.  That might satisfy the neighbor and keep things as they are for your Mom.

It doesn't seem reasonable for the neighbor to take no action and no compensation while your Mom starts talking about adverse possession and taking the land.  They will hate each other soon, if they don't already, if Mom goes that route.

@Joshua Esparza

I suspect your $10k home is nothing more than "bulldozer bait".  You didn't tell us anything about it, so we really can't help with your question.  You will oftentimes see ads for properties in that price range saying something to the effect of, "The value is in the land." meaning you are going to tear down whatever is there and build new.

@Joseph ODonovan

Yes, in PA you can simply state your property is not Section 8 approved or that you do not want to go through the process.