Has anyone here successfully navigated this situation?

Question

I had an investor reach out with a question about flipping manufactured homes, and I thought it would be worth sharing here.

Scenario:

• He successfully flipped a property in Clayton, IN  that was a manufactured home on a cinderblock foundation.
• The county records classified it as Single Family Residential for land use and improvement type. Because of that, it appraised like a site-built home and the buyer was able to get a conventional loan.

He successfully flipped a property in Clayton, IN  that was a manufactured home on a cinderblock foundation.

The county records classified it as Single Family Residential for land use and improvement type. Because of that, it appraised like a site-built home and the buyer was able to get a conventional loan.

New Question:

• He’s looking at another similar property in Martinsville .
• Same setup—a manufactured home on a cinderblock foundation—but this one is classified in public records as Mobile/Manufactured Home.
• His concern: Will lenders and appraisers treat it the same as the Clayton deal (like an SFR), or will it be limited because of the “Manufactured Home” designation?

He’s looking at another similar property in Martinsville .

Same setup—a manufactured home on a cinderblock foundation—but this one is classified in public records as Mobile/Manufactured Home.

His concern: Will lenders and appraisers treat it the same as the Clayton deal (like an SFR), or will it be limited because of the “Manufactured Home” designation?

Takeaway:

• Lenders and appraisers rely heavily on the property’s official classification.
• Even if the house looks like a stick-built SFR, if it’s coded as Mobile/Manufactured Home, it will generally be treated that way.
• That impacts financing (fewer conventional options, especially on older units) and appraisals (comps must be other manufactured homes).
• Resale can be riskier because the buyer pool shrinks.

Lenders and appraisers rely heavily on the property’s official classification.

Even if the house looks like a stick-built SFR, if it’s coded as Mobile/Manufactured Home, it will generally be treated that way.

That impacts financing (fewer conventional options, especially on older units) and appraisals (comps must be other manufactured homes).

Resale can be riskier because the buyer pool shrinks.

Question to the community:
Has anyone here successfully navigated this situation—either getting manufactured homes reclassified as SFRs, or flipping them in a way that still attracted conventional buyers? Would love to hear what strategies worked for you.

James Hamling · Answer

@Frank Pyle there is regulations in your market for how such a property get's designated, and what one has to do to get the designation changed.

For example, in MN the property has to be permanently affixed to a foundation structure, and there is assorted options and details from on concrete slab, pilons with anchoring straps, etc etc..

From there, in MN, an inspection must be completed showing compliance, the manufactured home title which is held by DMV is surrendered to county with paperwork and shazam it's a SFH.

In your scenario it would appear the first one did that process, and the second hadn't.

Get with your local building and zoning authority to find out the details of how to get-r-dun.

Bryan Hartlen · Answer

Anecdotally, same applies in Phoenix. A fellow investor was working on a MH. The final touch for his property to qualify as a SFR (and SFR financing) was adding a portico / cover over the front entry way. So the assorted options that @James Hamling mentions can be head scratchers. You need to read the regulations for your area.

Tony Savage · Answer

Frank,

Some very good advice that you could give your investor friend in Martinsville, ask the experts in Martinsville. The appraisers, real estate agents, local lenders and the agents with the county.

Doug Smith · Answer

Other than what's been said above, I'll not add much other than to say that we don't normally do mobile homes, but the best cash-on-cash flip we ever did was a MH that was permanently affixed and taxes as real estate. It wouldn't have been my preferrence, but we couldn't pass up the deal. It's still one of our most profitable flips percentage wise. From a borrowing/lending standpoint, the lender that did the deal was someone we had a great track record with. I think they would have been apprehensive had we not had a huge chunk into the deal and we had that relationship.

Benjamin Louie · Answer

@Frank Pyle

Great topic, definitely something I’ve looked into. From what I’ve seen, the classification in county records really does affect financing and appraisal. Even if it’s on a permanent foundation, if it’s labeled “Manufactured,” most lenders will treat it that way.

I’ve heard of people getting them reclassified to real property, but it’s county-specific and not always easy. Would love to hear if anyone’s pulled that off in Indiana.

AJ Exner · Answer

Hey Frank,

I feel from what I've seen that it heavily relies on the region and that region's expectations. I've worked with investors who flip/rehab manufactured homes and even in the midst of appraisal/classification  they sell just fine because in that region it is more common. I think as investors we can get caught up in the "well it worked for them, so it should work for me" without taking into consideration that the regional 'flavor' and how that would impact my deal.

But it does help to work with a lender that has the flexibility and familiarity to lend to both and manage our own expectations when it comes to rate and leverage. Plus, in areas that are more rural you might not have an issue with the classification, but its too rural for some lenders, so then you're fighting that battle instead of it being a manufactured home

I do sense a lot of investors looking to solve that Rubik's Cube, they see the potential but its about lining everything up and trying to make it work.

William Thompson · Answer

Spot on—classification makes or breaks the exit. I’ve seen investors win big when they plan ahead with tax + lending strategy, not just the rehab.

Has anyone here successfully navigated this situation?

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