Out of my niche but can't help asking - Posted by SueC

Real Estate Investing Real Estate Financing
#1

Posted by SueC on February 23, 2001 at 09:06:24:

As I mentioned but probably didn’t emphasize, in this area there are virtually NO mobile homes, and home prices are quite high compared to what I see discussed generally on CRE. These MH’s probably compare in desireability to small (700 SF) 1/1 condos, and so their price is similar. In fact, small 55+ townhouse communities have homes that START in the low $200’s, so this is probably a good alternative to some folks.

Also, it’s a selective (55+) community, in a nicer area, built in 1978 - it would NEVER get zoning approval today. There is a $350 association fee that covers everything (activities, community center, sewer, water, landscaping, snow removal, etc. etc.) I don’t know if it covers land rent.

Due to the snow storm, I won’t be able to see the unit today, not until next week some time, but that’s 'cause my realtor is tied up, I’m hoping someone doesn’t scoop it (if it’s truly a good deal…) I don’t know what other rents are in this park or anything. Hey, if it gets scooped so be it, I won’t buy something anyway until I know that my analysis is good!

Hope this helps, and thanks.

SC

#2

Out of my niche but can’t help asking - Posted by SueC

Posted by SueC on February 22, 2001 at 12:47:20:

I found a MH in a 55+ retirement community that is being offered at what appears to be 1/3 of the comps in the park. Estate sale, owned by the retirement home I guess the former owner wound up in. There’s similar unit on the market for $89,900 in the same park, so I’m guessing the condition of the cheaper one is pretty bad.

I have not been looking at MH as a place to invest, as there are not many around here, but this deal looks too good. I can’t get Lonnie’s book fast enough (by the weekend!), so I have to ask some very basic questions and look for some quick feedback, at the risk of repeating things already asked in the archives:

  1. The land is leased, so that is an extra payment? I need to ask if the association fee covers that I assume.

  2. I don’t know whatkind of box it is, only that it’s “double wide”. I do know it dates from 1978.

  3. What are they typical kinds of repairs to look at? Plumbing? Wiring? Where do I find contractors to do that kind of work?

  4. The seller is offering LP, I would sandwich lease or sell outright if I can set a good option price.

  5. Where is the best place to get financing for this, if I decide to buy outright?

What else should I be asking/looking for? I’m not sure what else I need to think about, but I can’t resist at least exploring this. I did read through all the posts below, but I am so in the dark I am not sure which ones contained answers I need! Thanks for your patience everyone,

Sue

#3

Re: Out of my niche but can’t help asking - Posted by JHyre in Ohio

Posted by JHyre in Ohio on February 23, 2001 at 10:31:59:

Repairs: Did it freeze up or is the heat and electric tape still on? If it was winterized, was it properly done (see recent post on main site for this)? If the electric is off, beware…you want to know state of wiring & cost to repair beforehand…because of liability and cost to repair (electricians are soooo expensive, but I use them instead of “guys who know alot about electricity”- that pesky liability thing again) if I find electrical problems, I pass on the deal. Then again, I usually deal with much smaller dollar amounts per home, $1000 to $6000 being my range, $3000 being the average…with the numbers you’re talking, a bit of electrical work may be justified. Roof leaks, weak floors (anywhere there’s water- Bath, near windows, etc.) and wall rot are common in older homes in my clime…but fairly simple to correct.

As far as contractors are concerned, caveat emptor…these people are a real PiA where MH’s are concerned. For reliable work, check with park managers. Get an outfit that specializes in mobiles and regularly works on them…Joe the part-time handyman is good if you have the time to screen & train and intend to use him repeatedly. Sounds like you want a one-time job and won’t need MH repair services very frequently, so taking the time to develop cheap but effective MH help would be counterproductive. Shop the professionals, many gouge, especially if a female is involved…the MH industry is RIFE with dishonesty.

Sandwich L/O sounds like a good idea unless you are fairly certain the thing will sell for cash within a reasonable span of time. When I plan for a cash deal, I ask park manager about actual sales and get realtor comps AND estimate of time to sale, then undercut the market by about 10% to 15%…I prefer the fast dollar to the last dollar.

I’m not sure why you’d want to buy outright, assuming reasonable LO terms…MH loans tend to have a lot of garbage fees (points, “service fees”, etc.) and rates on used homes are high (15%+), so a personal line of credit may be the way to go. See what MH loan brokers have to offer…maybe they have low-fee programs for good credit…I usually consult with them for the opposite reason, that is to get credit for those with “dinged” FICO scores.

Hope this helps,

John Hyre

#4

Right # of Zeroes? - Posted by JHyre in Ohio

Posted by JHyre in Ohio on February 22, 2001 at 14:34:11:

A mobile home in a park sold for 89 THOUSAND dollars? Ergo, you are looking to pay/take over 30 THOUSAND dollars on a MH to make a profit?

Let us know if the numbers posted are correct, then we can analyze the deal.

John Hyre

#5

Thanks J - Posted by SueC

Posted by SueC on February 26, 2001 at 10:11:51:

Thank you for your response to my posts; I drove by to take a look at this unit, and it is being called a double-wide, but it has an enclosed room off the side, it’s not a true double wide. Hence the price disparity I think; it also needed a TON of work, just from what I could see outside.

I am not up for this at all, so I’ll probably take a pass. Unless someone in the Philly PA area contacts me, I can pass along the lead.