modular homes - Posted by dan

Real Estate Investing Real Estate Gurus
#1

Posted by Bernard Collier on March 11, 2002 at 19:51:39:

Dan,
You will not necesarily loose money because your mortgage is being paid down with each payment. However, don’t expect the profit you’d recieve if it
was a stick built house. Although, that is not impossible.
Land doesn’t appreciate in value like homes do.
However, if the area becomes popular then all land values may go up because people are willing to pay more for it.
Things that would make it go up. They put in a new Food Lion, or a Walmart, etc.
The vacancy rate will be about the same as with a stick built. However, the maintenance will be slighly higher, due to the fact that it is not as well built as a stick built. However, if you get good tenants, then they may help with the upkeep by doing minor jobs themselves.
Bernard

#2

modular homes - Posted by dan

Posted by dan on March 10, 2002 at 24:44:21:

I am on chapter 22 in Carlton Sheets “No Money Down,” so I am just starting out in RE investing. I saw a local modular home company advertised a repo 4 bd pre-fabricated house for about 40k. I then looked through the local newspaper and found about 37 of them already on land really inexpensive. My question is if they are habitable, would they be good rental income property and how does the appreciation rate differ from a SFR?

#3

Re: modular homes - Posted by Lor

Posted by Lor on March 11, 2002 at 12:33:38:

Are you sure these aren’t manufactered homes? (mobile homes/trailer homes) There is a 3 bdr, 2 ba modular house down the street from me for sale for $599K. A modular is factory built and brought to the site in two pieces and set on a foundation. The prices and appreciation are the same as stick built homes but maybe this is just a Calif. phenomenon.

#4

Re: modular homes - Posted by Bernard Collier

Posted by Bernard Collier on March 10, 2002 at 01:49:53:

Modular homes actually depreciate. They are brought by investors to generate income. Because they are inexpensive to purchase in comparison to stick built homes. However they can be rented at just below what a stick built goes for. So the spread between the mortgage and the rent amount is larger. If the average spread is $100 to $150 then with a modular it should be somewhere around $200 to $250 and even more depending on where you are at.
Some call them income generators.
5 modulars homes could = $1,000 monthly…vs
5 stick built that could = $500 monthly

#5

Re: modular homes - Posted by dan

Posted by dan on March 10, 2002 at 14:35:05:

So, what your saying is that it’s great if you want to keep it as rental property, but if you go to sell after say 10 years, you would lose money? Wouldn’t the land it sets on give some appreciation? Also, what are the usual vacancy rate in comparison to a SFR and multi family housing? Do you know if they require a lot of maintance?