Please Help Me Structure a Deal

[srbaum17]

I want to make an offer on a mobil home and land that I will use as an income property.  It is currently listed for $25,000 and can be rented for $350 per month. I believe that the listing price is about to be reduced to $17,000.  The property appears to be in shape and will not require any work before it can be rented out.

I have heard that it is more difficult to get a mortgage for a rental mobil home.  Is this true?  I have a very good credit score, although I have high credit card debt and my income is not verifiable.  Where should I go for a loan?  I would like to put as little down as possible.  Can I take back a second from the owner for the down payment and closing costs?

Please also advise on a good offer strategy.  What other costs will I have?  Any pratfalls that I should watch out for?

Thanks in advance for the help.

Steve

[StacyKellams]

Steve,

Glad to have you posting.

I need some more information. How old is the MH? How big is it? Singlewide or Doublewide? How much land is it on? Is it in need of repair? Does it have a flat roof or pitched roof? Is the roof metal or does it have shingles? Does it have a deck?

Unless it is more than 20 years old you should be able to rent it out for more than $350 per month. How did you come up with that figure?

Give me more information and I'll see if I can help.


Happy Investing,

Stacy

[srbaum17]

Thanks, Stacy,
The Mobile Home is a 1985, 18x50 singlewide. It has a pitched, shingled roof built over it. Front and back decks, plus a carport. I'm told $350 is about the going rate in that area, what is your experience with rental prices? It looks to be in good shape exept for some water on the wall and floor near the washer.  Other than that, no visible problems.

Thanks Again,
Steve

[David Alexander]

should be a lonnie deal....

Wouldnt pay more than 3k for it absolute tops and you can buy them all day long for less....

Some of them even FREE....

David Alexander

[srbaum17]

What is a lonnie deal????  There is a 40x100 lot included that has city water, and sewer hooked up.  I'm told the lot is worth $8,000.

[StacyKellams]

I personally wouldn't do the deal. All you're really getting is the land.

Like David said, you can buy mobile homes all day long for between $3,000 & $5,000. Why pay more? If you want a Mobile Home look for homes that are already in parks. Then you won't have to pay for land and you can either rent them or sell them owner financed.

Lonnie Scruggs is a Mobile Home investor. He wrote a book called "Deals on Wheels." You might be able to buy it through this website.

Lonnie buy's MH's in parks. He pays between 3k to 5k cash then owner finances them out for between 7k and 15k depending on the condition of the MH. He gets between $500 and $1000 down and carries the note for 36 months at 12.75% interest. The cash on cash returns of a deal like this are astronomical. Upwards of 50% per year return on your money and can exceed over 100% cash on cash return.

I highly suggest reading Lonnie's books before doing any mobile home transactions. You'll get burned otherwise.

Happy Investing,

Stacy

[srbaum17]

Thanks, Stacy. I will certainly take that under advisement.

Steve

[David Alexander]

Real life... I started investing by doing MH deals....

I never paid more than $3300 for a home.... maximum investment ever was about $4600 when they had to be moved...

Most were under $2k, some Free..

The great returns dissappear after about $2500... So, you need to really want the home...

The land you would need to value different and seperate...

In Texas if you sell a MH, you ahve to sell the land to.... after the new law in 2001.

David Alexander

[agkatz]

What about buying mobile home parks?

What's the angle on those?

[srbaum17]

Thank you everybody for the great posts. My eyes have really been opened! I've found and read some great articles about this on the site. Where do you find these cheap MH's. David....You mentioned you get some for FREE. How does this happen?

Thanks Again.

Steve