Going to see a 1987 single wide titan tomorrow (sat) asking price is 9,000. It is in small mobile home park about 15mh, most of which are trashy looking. But in the back area of the park are 2 brand new mh and looks like excavation for another 2 sites. Which leads me to believe they are trying to upgrade the park. When I contacted the park manager (who is showing me the mh) he said that it needs work. And from just looking at it from the outside - boy does it need work. My question really is after I look at it and figure out what repair costs will be - what should I offer him? I have researched sold comps in area - only 1 sold within a mile and 5 sold within 5 miles. These are not apples to apples as all comps were much larger than this one and in much better shape (although they all needed work). I also looked up county records and tax assesment records. tax card has it listed for 13k and property was last sold in 2000 for 17k.
Sorry this is so long… but any advice would be helpful… Again this is my first possible deal.
Going to see a 1987 single wide titan tomorrow (sat) asking price is 9,000. It is in small mobile home park about 15mh, most of which are trashy looking. But in the back area of the park are 2 brand new mh and looks like excavation for another 2 sites. Which leads me to believe they are trying to upgrade the park. When I contacted the park manager (who is showing me the mh) he said that it needs work. And from just looking at it from the outside - boy does it need work. My question really is after I look at it and figure out what repair costs will be - what should I offer him?
No where NEAR $9000. To be clear, I do not own any mobile homes because I invest in “bigger deals”, but I have researched the business very intensely and have read multiple books on the subject. You are thinking about engaging in a business that can be very profitable, so … you are on the right track. However, $9000 for a mobile home that old and in that bad of a condition - that is way too much money. You have to remember that old mobile homes, especially without land included in the price, are like old computers OR old cars - they only go down in value and are not worth that much. I would personally offer no more than $4k for the home, assuming it’s ugly but still liveable, and plan on selling it on a note for at minimum 2.5x what you paid for it with at least 10% down. So if you spend $4500 total ($4k sales price + $500 in carrying costs and advertising), then I would sell it AT MINIMUM for at least $11250 with $450 cash down at 12.75% interest. A better deal for you would be 3x the basis with 20% down at 12.75% interest. A great deal would be 2x the basis for CASH.
I have researched sold comps in area - only 1 sold within a mile and 5 sold within 5 miles. These are not apples to apples as all comps were much larger than this one and in much better shape (although they all needed work). I also looked up county records and tax assesment records. tax card has it listed for 13k and property was last sold in 2000 for 17k.
Comps are 100% irrelevant when it comes to mobile homes, unless they are (a) less than 5 years old or (b) land is included in the deal. And I would not EVER consider buying a new or used mobile home that’s less than 5 years old - as it wouldn’t have enough profit - and additional I would never recommend renting a mobile home…only owner financing it.
Ask any more questions and I’d be glad to help you.
Thanks so much for your insight. Will have to see what the seller is looking for - hopefully he just wants to dump it.
I also just purchased “deals on wheels” which was recommended in other posts by quite a few people on this site.
That is a great book. I would recommend “Making Money With Mobile Homes” and “Taking The Mystery Out of Money” by the same author - checkout http://www.lonniescruggs.net/store.aspx or go to Amazon.com and search for those book titles. Good luck with it