Before You Fix Up a Manufactured Home

Pound for pound one of the best real estate investments are manufactured homes. If you’re not familiar with what a manufactured home is, then you may be familiar with its other terms such as “mobile home” or “trailer home.” For simplicity purposes, in this article, we’ll just refer to this home style as a mobile or manufactured home.

What makes mobile home investing attractive is that if purchased right, an investor can purchase a home at a very affordable cost and sell for nearly double or sometimes triple their investment.  For example: compared to single family home prices, mobile home investors may have to pay anywhere from $2,500-$15,000 for a home. In some cases, manufactured home investors may also get the home for free from a park owner or the manager.

So why are these homes so cheap? Well, in most cases, if a mobile home is located in a community or “mobile home park” then the homes are considered personal property, just like your vehicle.  Oftentimes, these personal property mobile homes are accompanied by a monthly lot rent, since the homeowner does not own the land that the home is fixated on. In this housing model, community residents rent the land, hence why the home values are typically cheaper.

When it comes time for the sale of a personal property manufactured home, transactions are very simple. If you’ve ever sold a car or truck on Craigslist then it’s literally the same type of transaction.

Whereas with a single family home that is considered “real property.”  And not to be too confusing, but there are also manufactured homes on private land, that are also considered real property.  In this instance, the mobile home owner owns the home and the land underneath it. Real property involves much more paperwork as the values are typically much higher in which a realtor is typically involved in the transaction.

Oftentimes, traditional home investors can’t wrap their heads around this type of “personal property” investment.  Mostly because the homes are built a little differently and certain parts or cuts are specifically designed for this housing style. That said, there’s two ways in which an investor may get value out of a manufactured homes. One strategy is buy & hold and the other would be flipping (just like single family home investing).

In either investment scenario, you may have to fix up the home to bring it up to habitable standards. So if you’re considering on being a mobile home investor, then there are definitely some items to check off prior to fixing up the home.

We decided to sit down with Dan from Colorado Mobile Homes to find out what he recommends.  Colorado Mobile Homes is a manufactured home dealer that has been buying, selling and listing mobile homes for sale in Colorado since 2014.  In that short span, they’ve sold over 100 homes and many of those have been fix and flips. In our conversation, we chatted about the top 3 items a new investor should be cautious about.

 So before you fix up a mobile home, here’s what Colorado Mobile Homes recommends:

1) Plumbing:

Check the plumbing prior redoing the floors. Specifically, make sure there are no leaks to the pipes and also get verification that the sewer line is clean. Even though the toilet could flush, you may have workers using the bathroom and using the restroom at any given moment, something can change. This factor is especially important to consider for any home that has been abandoned, vacant or had a hoarder previously living there.  If the grey water line hasn’t been used in a while, then substances can harden or tree roots can block the line. Dan stated that there is nothing worse than having to rip up a new floor due to a sewage back up.

2) Home Leveling

Prior to doing floorwork or anything with the walls such as: hanging drywall, patching, painting—make sure the home is level.  A leveled home will help with the craftsmanship and integrity of the work being done to the home, especially with hanging drywall or repairing the subfloor.  It will also remove any obvious issues that new owner will ultimately complain about. Mobile home leveling will save costs in the long run and help with the overall longevity of the home.

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Three easy ways to tell if a prospective home is uneven:

  • If you’re walking inside a house for the first time, take a look at the doors. If they can’t stay open, then chances are the home is uneven.
  • Another way to determine the leveling of the home is by walking from one corner to the other. You may notice a slope or uneven subfloor if the home is double wide or triple wide.
  • Check the windows. Do they lock? If they don’t close all the way or are hard to slide, then it may be an indication that the home is uneven.

3) Appliances :

One of the most underrated expenses are the appliances. That can be the kitchen appliance or your HVAC appliances such as a furnace, water heater and depending on where the region that the home is sold in, the air conditioner or swamp cooler.

Coloardo Mobile Homes stated that “Having good appliances definitely sells a home. Most home mobile home buyers want longevity in their appliances, so it’s best to replace them with newer and better products when you’re reselling a home.” However, if you have to replace the items, then just know that this can easily add up to a $10,000 fix.

Colorado Mobile Homes suggested that this is definitely something that you need to consider prior to buying the home.  “It may be advantageous to have an HVAC company that specializes in manufactured homes to scope out the water heater and furnace.  A furnace may work, but if there’s a hole in the heat exchange then you risk leaking carbon monoxide. At that point, you should definitely change it for the new owner or for anyone working inside the house as it is a health hazard.”

So before fix up consider buying a manufactured home to flip or rent, definitely consider these factors.  In most cases they are something that will eventually need to be fixed. Fixing these items also bolster your position for protecting the value of your sale price. New owners will also love that they don’t have to make fixes to any of these items in the near future.


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