The Money Mustache Community
Learning, Sharing, and Teaching => Real Estate and Landlording => Topic started by: jwright on September 29, 2017, 08:27:19 AM
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I just came across a listing near me for a property that includes six detached units. One main house (single family home) and five mobile homes. List price is $226,900, the listing says gross monthly rent is $3,825. SFH is on a one year lease, mobile homes are leased month to month.
I one several commercial properties with my family and also work for a real estate company that handles residential and commercial rentals. Never touched a mobile home before.
Does anyone have an experience with a set up like this? What to think about? The listing says that financing is more difficult because of the mobile homes so they need highly qualified investors. It also says that the mobile homes are "older but bring strong rent"; two of the five mobiles (as well as the SFH) have new roofs.
How does a mobile home depreciate compared to a traditional SFH? You still have roof, HVAC unit, water heater. Would you touch this deal or stay far away?
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So, I'm not all that familiar with mobile home stuff, but the bible for that stuff is "Deals On Wheels" by Lonnie Scruggs.
If I recall, the main way people do these types of deals is not necessarily to rent out the mobile homes but to sell them with owner-financing. You set how much down and how much a month. The returns percentage-wise can be astronomical.
Given that, one way to structure the deal would be to buy the place, owner-finance the trailers for a monthly fee, then charge a fee for lot rent. But, at that point, you'd be running a small trailer park, so you'd have to see if there would be zoning or other issues. Do your homework. On the upside, though, if you sell the trailer rather than rent it, you are not responsible for maintenance.
From what I've heard, mobile homes are closer to cars than to houses in many ways. They depreciate like cars, are purchased like cars (i.e. with the equivalent of a pink slip) and can be repossessed like cars (i.e. no foreclosure process).
I'd check on Bigger Pockets for more info, I'm sure they've done at least a podcast or two on mobile home investing.
HTH
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Hmmmm, that doesn't jive with the listing saying the mobile homes are on month to month leases and the current owner replacing the roofs. I have no interest in running a trailer park.
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Hmmmm, that doesn't jive with the listing saying the mobile homes are on month to month leases and the current owner replacing the roofs. I have no interest in running a trailer park.
So, just to clarify, I'm not saying that owner-financed sales is the best / only way to go. It's just a different option to doing a regular rental arrangement. If that type of arrangement feels better to you, there's lots of info online about it.
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The latest podcast on bigger pockets is about mobile home parks. Maybe give a listen?
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This sounds like a rural or semi-rural parcel where the zoning allows for mobile homes. Doubtful it could be subdivided. OP, what are the current or projected rents? Do the numbers work?
My property partners and I purchased an older manufactured home on an acre of country land a couple of years ago. This website was interesting and informative:
mobliehomeliving.org
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One difference is that mobile homes have a life cycle of about 40 years, if maintained... so rent should cover the depreciation of this asset. (Or your purchase price should include a discount)
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Hmmmm, that doesn't jive with the listing saying the mobile homes are on month to month leases and the current owner replacing the roofs. I have no interest in running a trailer park.
So, just to clarify, I'm not saying that owner-financed sales is the best / only way to go. It's just a different option to doing a regular rental arrangement. If that type of arrangement feels better to you, there's lots of info online about it.
Also some mention in the James Mcmurtry country blues drone, Choctaw Bingo, viz:
"Uncle Slayton's got his Texan pride
Back in the thickets with his Asian bride
He's cut that corner pasture into acre lots'
He sells 'em owner financed
Strictly to them that's got no kind of credit 'cCause he knows they're slackers
When they miss that payment
Then he takes it back"
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Also some mention in the James Mcmurtry country blues drone, Choctaw Bingo, viz:
"Uncle Slayton's got his Texan pride
Back in the thickets with his Asian bride
He's cut that corner pasture into acre lots'
He sells 'em owner financed
Strictly to them that's got no kind of credit 'cCause he knows they're slackers
When they miss that payment
Then he takes it back"
A kindred spirit. Everyone needs to hear this song!
"Ruth Ann and Lynn they wear them cut off britches"
This whole damn song is a trailer park immortalized in poetry.
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This sounds like a rural or semi-rural parcel where the zoning allows for mobile homes. Doubtful it could be subdivided. OP, what are the current or projected rents? Do the numbers work?
My property partners and I purchased an older manufactured home on an acre of country land a couple of years ago. This website was interesting and informative:
mobliehomeliving.org
For the six properties gross monthly rent is $3,825 at a sales price of $226,900. I don't know how that breaks down for each home.
I've decided not to move forward on this, intriguing as it is.