Sounds like a pretty rambunctious idea! Not sure I would reccomend it to a total newbie. Do you have the financial ability to prepare/carry the property and purchase the units? Where are you going to obtain the financing?
I have several other businesses that I actually built my self, including 2 gas stations. I also have real good relationship with the bank that does most of my loans. I would have about 20% down payment. The fiance will not be that big of a problem.
But you really really think this is too much for a first timer? Even if they have business experience and the capital.
I did a very similar thing in my city. I paid about $14/SF for the homes from the REO company and funded the land and all construction with cash. Don’t get any MH’s older then 10 years, prefer 5 years or newer. The city had some odd requirements, but after a few meetings with them I understood their needs and was able to accomodate pretty smoothly.
I upgraded the house with nicer kitchens, paint and flooring then you normally find in MH. I now have a waiting list of potential tenants and very low turnover. It has been a good investment for me.
One thing to be very aware of is the liquidity issues with MH. Even if they are permanently affixed, you will find that almost no-one will finance it. Or allow a cash-out refinance. Selling is equally difficult, and you may need to carry the note. If you already have that covered, then you are good.
Because of that liquidity issue, you should aim for a cost (including install) of less then 50% of your stick-built costs. If you can achieve that cost you will be very happy with the investment.
I have looked at several modular homes. The better ones are very well constructed. They have to be because they are transported to the building site. I actually found some very good deals on units that were in stock. The biggest concern is tapping into public utilities I found this to be my biggest expense. After alot of consideration I have decided to purchase a modular and put it on the front of 40 acres and live there while I build the resources to build a timber frame. Then live in the timber frame til I die, only leaving for Steeler games!
I just like the ease of purchasing a modular and only having to prepare the foundation. I went to a builder and spent the day with his guys installing ICF's for a foundation. Simple, easy, and green. The ICF manufatcurer will even send out there project manager to help with the install using my labor and rent me the equipment.
I’m beginning to do the same except on a smaller scale. If I can get it to work I’m would like to set up a property and just rent the sites to mobile home owners. They are the ones that won’t move out the middle of the night, they will be long term and you won’t have to “fix” anything in the middle of the night.
He is referring to the Planning department. If they are not in favor, forget it. If they will support your project it is a good investment.
I do not recommend renting Mobile Homes. They are not built strong enough for tenants. Put in the utilities, pave the roads, prep the sites and install the Mobile Homes one at a time. Sell the units as you go, do not rent.
When completed you have your own sub division, at a fraction of the cost of stick built and an income for life from the space rent.
I never did that for myself but yeah last year i visited a fair in china in which they had this concept where there had big sample villas fitted with modular stuff and furniture and lot of people i guess booked as well, it gives you a very good idea about how the furniture and modular fittings will look like.
I suggest to you going to local real estate agency and contact . They are close relationship with builder and have enough information . They provide you facilities and charge their services. They give you important information.
Keep in mind that if you drop it on a foundation you’ll pay real estate property tax like a site built home. Keep it off a foundation and you’ll pay only personal property taxes saving thousands. (in most states)
Try a MH with similar characteristics and play with the landscaping to give it a site built home look.
I have researched the mobile home business pretty intensely…and I can tell you the people who really make the good money in the mobile home OR modular home business buy the land, and lease the lots. They do NOT own the homes. That’s where you’ll make your bread & butter - because there is little to no maintenance vs actually owning the home.
And when it comes to the home itself, it is actually very smart to owner-finance the home for the buyer. Mobile or modular homes, even the nice ones that look like houses, are like cars or computers - the only go down in value. So the best way to get one is to buy a used one at a fire sale price, fix or clean it up a bit and sell it on a note. So why not get cashflow from the note on the home, and also get cashflow from the lot rent? If something goes wrong with the home, it is NOT your job to fix it. And if the person defaults on the note, you can take it back & resell it again on a new note, and make even more money. It’s almost the perfect business.