What You Missed May 2012 General Meeting
by Robert Davis
Profits in Mobile Homes on Land
Presented by: Anne & Lenny Cimador
May 1, 2012
Will you retire with enough money to afford the lifestyle you want? Lenny and Anne determined their regular jobs would not do this for them. So they discovered their way of changing that. ‘Profits in mobile homes on land’ was presented by Lenny and Anne Cimador. They are buying and either flipping or holding mobile homes on individual lots. They prefer mobile homes with some acreage included. Their typical client is one who wants to live away from the city without costing them an excessive price.
There are some criteria the property must have for them to consider buying. The mobile home must be built to HUD standards, it must be on an approved foundation, and it must be a property that can be FHA financed. These criteria are needed to set up an exit plan. They look for 3/2 homes and something they would live in. The land must be already zoned for mobile homes or grand-fathered in. This helps avoid the large impact fees that apply if you have to move another mobile home onto the land. Lenny said you may want to replace older mobile homes with newer ones to attract better tenants.
In general, Lenny said mobile homes on their own land are cheaper to buy than stick-built homes. Of course he said the real value is in the land. By costing less, mobile homes will cash-flow better as rentals.
They try to separate the mobile home from the land for property tax purposes. He said vacant land is appraised much less than land with a dwelling included. Lenny puts the mobile home into a personal property trust and pays for a tag or sticker at the DMV each year.
One area to avoid is mobile homes in a park. Often the park management must approve any prospective tenant. That alone could delay filling your rental and may cost a fee for each prospective tenant the park considers. There is also the lot rent which must be paid each month whether the home is rented or not. Lot rents can go up, sometimes drastically. The park manager may leave and the new one may not like you. In general, Lenny said, you have less control over your own rental if it is in a park.
They said to avoid mobile homes on dirt or limestone roads. Avoid homes near power lines and ones at the bottom of sloped land. Also avoid homes next to a neighbor who has one or more attack dogs, who is a sex offender, or who let their property become run down. If there is a home owner’s association involved, check on their rules, fees, and if the property has any liens against it. They avoid areas where there are a lot of rentals as well. Lenny said to try to buy within a 30-minute drive from your office or home. Look for mobile homes that are larger than the average ones and are on at least a half acre of land. County water availability is a plus.
Both Anne and Lenny gave out a wealth of information about buying mobile homes on their own land this evening. If you missed this talk, you missed an excellent bounty of information and strategies for making money in the current harsh real estate conditions.