I was planning on purchasing on a L/O contract then assigning it unless someone has a better plan. I took my brother, who used to be an estimator for a builder, out to the site today and he thinks with 3k we can do the work and make this old mobile look great. The floors need some work, the roof needs sealing and a little carpet and paint should do it. I don’t see any reason why I couldn’t turn it over for 30k after work. Ernest and Lonnie, I have learned so much from your articles and posts and I’m sure this is just my start in a life changing experience. Thank you!
Posted by JuneFL on December 01, 2000 at 23:11:42:
Thank you, ahead of time, for your reply.
I just made an offer to purchase a 1974 model and 1/2 acre lot for 16k. This will be on a L/O contract with 5k down (option consideration) and $200.00/mo with $75.00/mo towards purchase price. 3k worth of fixing up will make this property a very attractive one. I don’t see a problem in renting this out or assigning my L/O and collecting $500.00 - $550.00 (comparables support) but I want to make sure I’m not getting myself into a mess. Am I missing something?
Posted by Ernest Tew on December 02, 2000 at 05:22:55:
It sounds like you are starting out in the right direction. However, you may be making a wrong turn if you rent a nice mobile home. Generally, mobile home renters don’t care about the landlord’s property and are often reluctant to make the payments.
Regardless of how you structure the transaction (sale or lease and option), we find its much better if the occupants think of themselves as “owners.”
If you sell the property and can get close to 10% down your chances of success are much better. Owners are more inclined to take care of the property and make the payments. And, when they leave their down payment is not refundable. They will be responsible for all expenses, including taxes and insurance. In Florida, they will be able to get homestead exemption. That will eliminate most if not all of the property taxes. And, they will be able to lower their effective cost by deducting the interest they pay on the loan.
If you would like to discuss it further, please give me a call at (352) 475-1280.
beware of buying older mobile homes to resale unless you are owner financing. The apraisal value might not be high enough for a loan dept to loan much on.