Home Buying in San Jose>Question Details

cscbarnes, Home Buyer in 95008

Should I invest in a mobile home?

Asked by cscbarnes, 95008 Tue Oct 2, 2012

I do not have good credit, I do not have any foreclosure or bankruptcies by I did have a few credit card problems. I recently inherited a bit of money I was thinking about buying a mobile home. Would that be a possibility?

Help the community by answering this question:


If the strategy is to buy and hold (rent) then it will depend but most likely it will not be a good investment. But if you are thinking of buying and resale then there is money to be made as there are many other investment opportunities.

But as anything else you need to educate yourself with the pros and cons of where you want to invest your money. Most mobile home parks has its own rules, regulations and restrictions so before you decide to invest in mobile homes there will be homework to be done as any other investment opportunity.

Even if you decide to invest in real estate then you must educate yourself and work with a real estate professional that knows about real estate investing and not just sales.

Be careful and educate yourself in the area where you decide to invest your inheritance.

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2 votes Thank Flag Link Wed Oct 3, 2012
I'm so impressed by John's answers. Very wise and informative. I believe there are good investment opportunities on any market and the mobile home market is no different.

I cannot make any arguments with John other than applaud for different reasons:

- First, I know what I know and I know what I don't know and I don't know what I don't know. And I know and can honestly say that John knows more than I know regarding this topic.
- Second, I personally believe that John answers are only intended to educate/assist/advise the person searching for answers with no "sales first" in mind.

I can go on but I just want to say to John; I don't know you but I thank you and appreciate your answers. And if you see any of my future comments that you believe to be in-accurate please feel to admonish them.


Jose Adame
Web Reference: http://www.JoseAdame.com
1 vote Thank Flag Link Fri Oct 5, 2012

I have recently sold a mobile home that was still licensed by the DMV ... I'm differentiating between the words Mobile Home vs. Manufactured Home because the words “mobile home” were used in the question. So, since I’ve been admonished, “please, if you're going to give advice on an open real estate forum, have the facts”, the facts are …

There are plenty of mobile homes in this area still licensed by the DMV.
1 vote Thank Flag Link Thu Oct 4, 2012
First, let me qualify what I'm about to say by stating that in 30 years of buying and selling mobilehomes (built before June 15, 1976) and HUD manufactured homes( built after that date), I have never once lost money. That includes the ones I bought and sold before I was ever officially in the business as a contractor, dealer, developer and real estate broker.

In fact the very reason I'm in this industry is because it's been very lucrative and has helped me put my 5 children through college and provided and continues to provide me with a very comfortable living. I don't need to worry about retiring because I can continue dealing in this industry until I graduate to that big "Trailer" in the sky. LOL!

If you shop around for a good deal on a MH you can get as good a deal as you can on any other type of purchase be it an automobile, boat, furniture or any other purchase. Don't let a lot of inexperienced and ill informed people try to talk you out of buying something that could possibly be a very comfortable, affordable and good investment for you.
1 vote Thank Flag Link Thu Oct 4, 2012
As you’ve seen by the answers below, there is a difference between “buy” and “invest”…

I can “buy” a 1985 Plymouth Voyager van, but there is absolutely no way I’d call that an investment. It’s the same with mobile homes – they are typically licensed by the DMV rather than the county recorder’s office. And, like a used van, values typically only go down. In real estate, it’s the land that increases in value, not the property on the land. In the case of a mobile home, there is no land. It’s a depreciating asset.

If you need a place to live and can’t afford any other option, they it might work for you. Keep in mind that space rents are increasing and the possibility that your home may be unsalable in 10 years is very real. You can’t rent most of them out and there are only a few lenders who will actually give you a loan to buy one.
1 vote Thank Flag Link Wed Oct 3, 2012
When you purchase a mobile home do not consider it an 'investment'. It is a way to lock in your monthly housing cost at a rate lower than a mortgage and sometimes lower than an apartment. You also get some of that back when you sell. But generally they do not appreciate like other properties.

The loans on mobile homes are different than a home or condo. Generally you will need 20%-30% down, the interest rates can be over 6% or more, the terms 20-25 years. Some mobile homes are too old and will require all cash. Those are the ones which are more affordable, and have more issues in their inspections.

Besides the loan and mobile home, you will need to qualify for the park and it's space rent. There is a general rule of thumb that your income should be 3 times that of your combined mortgage and space rent.

When I may be of help, please feel comfortable to call or email me.

Have an amazing day!
Web Reference: http://www.terrivellios.com
1 vote Thank Flag Link Wed Oct 3, 2012

If you mean you want to buy it and rent it out. Definitely not. Most mobile home parks do not allow such arrangements. Those that do jack the rent up under you so you cannot make any money from the rent.

If you mean you want to live in it, then the answer is maybe. If you cannot afford a regular home even with the inheritance and an FHA or VA loan, then a mobile home may be better than renting an apartment. When you buy a mobile home you later can sell it. So if the total you pay in rent and purchase minus what you get back when you sell will be less than what you pay in rent for an apartment, then you have made out well in the mobile home. Remember that selling a mobile home costs about $8,000. So subtract that amount from the expected sales price.

If you want some help finding a mobile home to buy or at least exploring all your options, please give me a call at 408-639-0211.

Mitchell Pearce
1 vote Thank Flag Link Tue Oct 2, 2012
Jose, thank you for your kind words and support. I do tend to get a little impatient sometimes on this topic. There are a lot of advantages to purchasing and living in a MH community be it rent/lease or resident owned.

Many folks don't like living in an apartment or in a building where they have to share a common wall but they can't afford to purchase a home and don't like the idea of pouring money down the drain every month on just rent.

Sure you're paying rent/lease if your in that type of community but you can own your own home which for anyone wanting to feel a sense of pride in ownerhip is a great way to go. Additionally, you have the freedom to decorate, paint, remodel, decorate and in many if not most cases even add on to your MH.

You can do some of these things in an apartment but it's tantamount to burning cash because you can't take it with you when you leave and you certainly can't recoup it by charging the next renter for your improvements.

With a MH you can often realize a return on your investment. As I mentioned in another comment I've been buying, remodeling and/or replacing MH's all over Southern California for almost 30 years and have yet to lose money on one and I started doing this before I ever got into he biz.

Thanks again Jose and please feel free to contact me anytime should you ever have any questions about the MH industry.
0 votes Thank Flag Link Fri Oct 5, 2012
Charles, once again a MH doesn't always depreciate. I can show you from personal experience that MHs can be a very vialbe "investment". I've done it for almost 3 decades and have not once lost a dime.

I'm going to keep on being a stickler with every RE professional who continues to suggest that purchasing manufactured homes is a losing proposition. We as professionals answering questions that could quite possibley impact someones buying decision should not be taken lightly.

We have a responsibility to our readership to provide accurate and factual information and not just lip service to help us further our personal gain and realize our own personal ambitions and remunerative goals and gains.
0 votes Thank Flag Link Thu Oct 4, 2012
Kudus to Elana for having it spot on.
0 votes Thank Flag Link Thu Oct 4, 2012
Contrary to Terri's comment you can indeed consider the purchase of a MH as a very prudent investment. If you look for a resident owned "condo", "sub division" or "planned unit development" (PUD) Manufactured Home Community where you can actually own the land or space your home is on you are definitely making a real estate investment that can and will appreciate.

In a resident owned MH community you can secure the exact same financing on your MH as you could on any site built home providing you have an FHA required HUD approved foundation system, an engineered certification and the requred HCD 433a documentation.
0 votes Thank Flag Link Thu Oct 4, 2012
Mitchells take is somewhat accurate in that many if not most MH lease/rent park/communities have stipulations in their lease/rental agreements that prohibit sub-leasing. However, there are ways to get around that and I've been doing it for decades without a hitch and it's perfectly legal.

If you want to be an investor instead of an owner/occupier you can purchase a MH and resell it via an agreement whereby you make an arrangement with a prospective buyer/tenant/renter to put them on the title as the "REGISTERED OWNER" and you maintain your position as the "LEGAL OWNER". If they default or do not make their rent/lease payments you can then reposess the MH through proper legal channels.

However, that's not the message I'm getting from you with this question. What I'm gleaning is that you want to purchase a MH to live in yourself and not as an invstment. If this is inded the case there are many park/communities you can invest comfortably in where you will not have to lose money if you select wisely.
0 votes Thank Flag Link Thu Oct 4, 2012
Carl, FYI the DMV hasn't "licensed" a manufactured home since June 15, 1976. The California Housing and Community Development Department (HCD) has been regulating and "registering" MHs since then.

The only thing the DMV has any authority whatsoever to do is re issue licenses to MHs that were grandfathered in before June 15, 1976 and did not wish to register with HCD. However, once they excersice the option to register with HCD they can never go back to the DMV.

Natural attrition has slowly taken its course over the years and the old Pre HUD mobilehomes that are umbrelled under the DMV are slowly deminishing never to return. So please, if you're going to give advice on an open real estate forum, have the facts.

Additionally, "It’s a depreciating asset." This is an oxymoron. It's either an APPRECIATING ASSET or a DEPRECIATING LIABILITY last I checked. Manufactured Homes can be a depreciating liability if you purchase one in a MH park/community that is old, run down or in a bad area.

But there are many upscale MH park/communities in the path of progress that are extremely good investments. Let's not continue painting this industry with such a broad brush. True if you purchase an old Pre HUD trailer in a blighted trailer park in a declining part of town you'll lose.

But wouldn't you lose if you purchsed a home in most downtown Detroit communities right now when they can't even give you a home in order to create some sort of modest tax revenue to keep the city/state from going bankrupt?
0 votes Thank Flag Link Thu Oct 4, 2012
Jose probably gave you the most accurate and astute I've read so far on this thread. Like anything you do need to educate yourself before you purchase a MH or anything else. Like anything you purchase there are pros and cons and you need to find out what they are before you invest/purchase anything.
0 votes Thank Flag Link Thu Oct 4, 2012
Yes, it is a possibility. In some cases you may be better off than renting an apartment or even sharing a room.
Web Reference: http://talisrealestate.com
0 votes Thank Flag Link Wed Oct 3, 2012
Thank you Mr. Barnes:

By investment, you do mean an appreciating asset. Is that correct?

Remember that mobile homes depreciate like cars. Also you must pay space rent for your mobile home. I do not consider mobile homes to be an investment. Mobile homes are no more of investment than a car.

It is land that appreciates in value, not personal property.

You should only consider a mobile home as a place to live, but not an investment.

Thank you,
Charles Butterfield MBA
Real Estate Broker/REALTOR
American Realty
Cell Phone: (408)509-6218
Fax: (408)269-3597
Email Address: charlesbutterfieldbkr@yahoo.com
0 votes Thank Flag Link Tue Oct 2, 2012
Depending on your credit score from the 3 credit reporting agencies and the income reported from your past 2 year tax returns, you may qualify for a real estate loan.

When considering to make a real estate purchase, it is important to understand that mobile homes generally do not appreciate in value anywhere close to single family homes or condominiums. It is very important to purchase property in the best possible area (Location, Location, Location!)
0 votes Thank Flag Link Tue Oct 2, 2012
Hi cscbarnes,

May I ask what would you expect after you bought a manufacturing home in the future? If you can answer them, then you know what to do.

Gabriel Nguyen
0 votes Thank Flag Link Tue Oct 2, 2012
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