Deal or No Deal: Doublewide Mobile Home In a Park

When I first started out investing in mobile homes, I had no idea what was a deal/what wasn't a deal. It really took a lot of effort on my part to go out and meet with sellers, learn the market, and learn how to put win/win deals together.

So, I thought I'd start a segment here to share with you my adventures checking out these homes and what I've pursued/not pursued. I hope these case studies will better help you to see and evaluate the thought process involved when analyzing potential mobile home investments.

(Note: As always, everyone is going to have their own criteria on exactly "what a deal is." What a deal to me, may not be a deal to you. And, vice versa. These case studies are only meant to serve as an example of my own experiences when analyzing potential opportunities. The numbers reflected in each case study are those that are in my market - every market is different and the numbers vary. Be sure to verify the numbers in your local market with every opportunity you find).

Ok, so I get a call from one of my park managers on a doublewide mobile home that just came up in the park. It's a late 1990s model, 24x48, 3 bedrooms, 2 baths.

(Note: Many of the opportunities I find are first hand, meaning no one knows about them - most don't have "For Sale" signs. How I learn about them is through my efforts at networking and building strong relationships. When just starting out, one of the most important things for me was learning to create strong and long lasting relationships. Though it takes time, it pays off in the end).

The owner of the home lives out of state and had been renting it out for the past couple of years. Well, now the owner evicted the current tenants due to non-payment. They had just been evicted and moved out when I got the call.

Over the phone, the park manager gave me all the details. Told me the specs of the home, the condition and what was needed to be fixed up. The park manager told me there wasn't that much work needed for the home. There was a small hole that needed to be covered and patched up (due to a raccoon) and some floor work, but other than that it was ready to go (according to the park manager).

(Note: Once you've built up a good relationship with your team members, they will know what you're looking for and will have all the info you need when they've got an opportunity for you to check out).

I asked the park manager what the seller wanted to get out of it. The park manager told me the seller was asking 15k for the home but would take 10k. When I heard this, I got really excited. I knew this was in a very good price range for my market and the area. I knew this home would sell in the 40k range owner financed.

(Note: Again, one of the most valuable things I've learned is the importance of learning the market. Once you've learned the market and know the values in your area, you'll be better able to spot a deal when opportunities come up).

I asked the park manager why the seller wanted to sell. The park manager told me the seller was just tired of the home - managing it from far away was too much of a hassle. Plus, this eviction was hard enough on the seller. So, I decided to take a look and check this one out.

When I got to the park, the park manager took me to see the home. Driving up to it, it didn't look all that bad from the outside. I really was getting excited about this potential deal.

So, we went inside and took a look. When we first came in (through the side door where the utility room in the washer/dryer area), I noticed the floor right away - it looked like there was a bit of floor and water damage.

Here's a pic:



(Note: Yes, that's a hole in the floor. The wood appears to be particle board, which can easily break. Seeing the damage to the floor was my first impression. Though floor work can be repaired, it's best if the damage is only in one area of the home).

Ok, so we move on to the kitchen. It didn't look too bad - it looked pretty good to me. Here are a few pics:




After the kitchen, we moved into the living room. Now, this is the area that really caught my eye. I found a few major things that concerned me here.

The first being a major hole in the ceiling. I asked the park manager about the hole - the park manager wasn't sure and told me it may have been due to the raccoon she saw in the home. (Don't worry, the raccoon was gone by the time we came into the home. Though, I have heard stories of animals (one being a raccoon) coming out and jumping out at people who go to inspect vacant homes).

Looking at the hole in the ceiling, I really had my doubts as to a raccoon causing it - it was quite large. Here's a few pics:





As I looked at the hole, I noticed the wood had been breaking/crumbing (just like the wood in the floor in the utility room) - there was definitely an indication of water damage looking at the hole.

Also, it looked like this hole could have been created (now this is just a theory) by someone (maybe the tenants) by shooting a hole in the ceiling. I mean, how does a hole like that end up being in a ceiling (especially on a late 1990s mobile home)? It just made me a bit concerned.

Now, my hunch about the possibility of angry tenants (who by the way had just been evicted) could have been on target when I saw this written on the wall in the living room:



When I saw this (especially the writing "bloodz"), I asked the park manager about it. The park manager told me, "Oh, you know people get angry with these kinds of things." Already, I was getting a bad feeling about this home. And, when I get a "bad feeling" I've learned to always stick with my gut.

In any case, we move on to the different areas of the home. To my surprise, I found extensive water damage throughout. Here are a few pics:

Water and mold damage on the ceiling





Water (and possibly floor damage) to the carpet



Water damage in the bathroom (Notice how the vinyl is coming apart)







After looking at the entire home, inside and out - I decided to pass on this one. Why?

It really had some major issues - water damage and structural problems (i.e. the hole in the ceiling). What I figured was that the water damage had come from the hole in the ceiling (not being protected) and there may be a roofing issue (a leak in the roof not visible to the eye that needed to be sealed and probably looked at a long time ago).

Since there was clearly evidence of water damage throughout the home, what was probably happening was that the water was coming in and seeping down the walls to create the extensive water damage to many of the areas throughtout the home.

When I pointed this out to the park manager, it really came as a surprise. To the park manager, this was not a home that needed that much work. Though, when I went through the home and pointed out the issues that concerned me the park manager saw things from a different perspective.

(Note: It's good to have members of your team help you out when looking at opportunities, but ultimately it's up to you to do your own due diligence and in turn make the final decision).

So, this was not a deal for me. Most times, I don't take on homes that need a lot of work. Sure, I don't mind doing some cosmetic work to a home. But, when it comes to water damage and structural problems - I've learned to stay away.

I hope you enjoyed reading this case study of "Deal or No Deal. I hope it will help you to better understand the thought process when evaluating potential mobile home investments.

If you would like to share a story on a home you've recently passed on or pursued (aka "deal or no deal"), I'd definitely be interested in hearing about it!

Happy investing!

p.s. Feel free to leave comments on any post either here and/or my Facebook Page. Comments are always welcome, thanks for reading!