How Do We Feel About Manufactured Homes?
I see a fisbo in our local paper at a great price, 129k it's on a 1/2 acre its a 1500 square foot 2004 fleetwood. The property should rent for about $950 a month. My question is how are the lenders with manufactured homes and how is the appreciation. I've been doing rentals for about 3 years here at an avg. appreciation of about 17-20% a year but not sure on this one need some help.
Manufactured homes can be difficult to sell and do not appreciate as quickly. I recently drove through a "park" for these types of homes looking a sale from a motivated seller. Of the 52 lots, 17 of them were for sale. I understood why the seller was motivated, but I did not want to be in there place should I need to get out of it quickly.
Their construction is also very cheap and I would think you would have a trashed property if you used it for a rental. Maybe you want to check out the Mobile Home forum here and ask around there about renting manufactured homes
HTH,
Robert
If you are holding for cashflow, a place that rents for $950 is not a good deal at 129k, especially being a mobile home. Mobile homes from what I've read, do not appreciate, but that land it is on might.
This is dumb question but isn't there a diff. between mobile homes and manufactured homes? I keep getting responses based on mobiles?
The price does sond kinda high as MHs are not readily lendable, and don't appreciate just like a stick-built home.
Difference in Mobile and Manufactured is just lingo, and the manufacturers have just recently made an effort to change their image by using mfgd in lieu of mobile.
Also to be distinguished from Modular...which is a regular house, but the thing is built in a fatory...and then the pieces are delivered and erected at the site...the floor, walls, kitchen cabs, etc....all done in controlled atmosphere of factory.
I've helped erect one of these that our YMCA won in drawing, and it's a neat system.
Mobile indicates it was built before 1976, manufactured after 76.
Being in Florida, I am REAL hesitant to buy any mobile homes now, I had thought about it
SOOOO, it seems like evreyone feels like its a non appreciating asset and the price is to high it will cash flow at the 950 depending on the % rates. Which I don't know about, any thoughts on the lending side?
mcq,
Since this is an n/o/o property, you might have to justify rents covering debt obligations, however...
one thing you can do is appraoch the FSBO and see how motivated they are by asking them if they will carry paper in such a way where they would accept a 10% down, and then for the remaining balance, structure two owner financed liens, a 75% first, and a 15% second. The second they would keep for cash flow, BUT the first they would sell at closing to a pre-arranged note buyer, thereby cashing them out at close, plus they keep the DP. The only thing is that the land/home package must not be sold for more than its appraised amount. If it is, discounts off the notes will be made based on appraised value, not the higher sale price, because that is technically inflated value, and note buyers are not going to buy that.
This is a great way to sell property that is hard to finance, and this creative financing allows you to avoid using banks, which can throw all sorts of junk fees and points and hoops onto you as you try to buy this property.
Hope this is helpful, Dave
We don't like manufactured homes? In our opinion, they are a poor return on investment, and their value is unstable. Yes, there are the fantastic money making stories but in comparison, the stick built homes can reward just as favorably.
Eric & Rosa
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