Foreclosure in Gig Harbor>Question Details

Jim J., Home Buyer in Tacoma, WA

Manufactured homes a good or bad idea?

Asked by Jim J., Tacoma, WA Sun Jan 6, 2008

I've been looking for a single-family home in Tacoma, University Place, Gig Harbor for the past few months. I'm on a tight budget and am not impressed with the available inventory. I've started to consider manufactured homes (with land) in the Gig Harbor area. I've always had the impression that manufactured homes are a bad investment. I'm not greedy, but I also don't want to lose money over time. If I hold onto a manufactured home for 5 years and keep it up, does it seem likely that I will at least break even on my iniital investment?

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Hi Jim, that's a great question and I hear it asked a lot, especially with the quickly rising home prices we have been seeing the last 3 years. I have done a lot of manufactured homes sales the past few years for that reason. Manufactured homes are a bit more difficult to get financed for but not nearly as bad as people make it sound. There has been a bad stigma with manufactured homes that really isn't warrented with how manufactured homes are now as opposed to how they used to be. Many people will shy away from them because of this, however, they are very well built homes now that are actually much more energy efficient than stick built homes. In short, I would just recommend staying away from older manufactured homes and you will be just fine. They do not depreciate, they just appreciate at a little slower rate than stick built homes. Also, make SURE buy from a quality manufacturer such as "Marlette". Thanks for asking and good luck! Sincerely, Chris Warmuth. Windermere/North Spokane, Wa.
2 votes Thank Flag Link Tue Mar 4, 2008
Again, you really need to contact someone who really knows MH's. I have to take issue with Stephen's answer. Buying used is definitely not the way to go. Especially in today's market. You can purchase a brand new MH for about the same price that they were getting in the 80's. So why would you want to buy any home that's not new?

Additionally, that leaves you with going back to the 70's to get any type of real price deal. Add to that if the home was built before 1976 you can't even get FHA guaranteed forward or reverse financing. Plus most MH parks and/or developments will more than likely want you to remove the old home and install a new one anyway.

As far as the notion that a MH will plateau? That depends. I'll give Stephan some wiggle room there. If the home is not over 20 years old, on private land and supported by a HUD approved foundation system with an engineered certification and California Housing and Community Development (HCD) 433a documentation your MH will appreciate along with every stick built property in your neighborhood unless you let it run down.

However, and this is where I give Stephan the wiggle room, if the home is in a lease/rent MH park/community that is not under some form of rent control you may indeed see the value of your home drop. In some cases dramatically. But it's not the home that's the reason. There's an age old adage in the MH industry.

"The higher the rent the lower the value of the MH". Exorbitant rents compromise the integrity of the value of the MH because the buyer/homeowner can only afford so much. If they're paying high rent they have to get a better deal on the MH in order for the deal to make any sense and still be considered affordable or entry level housing which is what motivates most MH deals.

Finally, it's all about location, location, location. We own several brand new MH's in lease land MH parks. Two of them are two story hybrids (part MH and part site (stick) built. There present value averages $500/sf. How you ask? Simply, they're less than 300 feet from the beachfront in Encinitas. One of the most desirable beach communities on the California Coast.

There are only a few trailer parks, and/or Manufactured Home communities along the coastline. Most of these parks still have MH's that were built as far back as the 50's. But try to purchase one on the West side of Coast Highway 101 for under 100k. If you are fortunate enough to find one you will inevitably only purchase the old one for the opportunity to lease the lot so you can pull it out and install a brand new one.

I know this has been a very long winded answer but there have been so many unfounded and unwarranted misconceptions and stigma's attached to Manufactured Housing that it hits my hot button when I see potential home buyers getting misled.

Again if you are sincerely interested in a MH we will be very happy to walk you through the motions no matter where you're located at no charge just to make sure you are getting the right information and treatment. Good luck.
1 vote Thank Flag Link Fri Jun 24, 2011
Please see the following link for the difference and definition of a Manufactured home and a Modular home. Manufactured homes ARE mobile homes. The biggest difference and the most important is manufactured homes are not inspected by your local building authority, they are required to have a federal sticker for compliance. (site hookups, water and electric as well as tiedowns are inspected) Modular homes on the other hand must meet all applicable building codes and are inspected by local building departments.
1 vote Thank Flag Link Mon Jan 7, 2008
Thanks for all of your answers so far. I understand the difference between mobile and manufactured homes. While I would normally never consider a mobile, Ruthless' comment is intriguing; the one regarding how neighborhoods that were formerly dominated by mobiles can change over time. There is a neighborhood in my search area that might fit this criteria. It may be worth getting into one of the older mobiles, then when I can swing it, replacing it with a stick-built.

As it happens, there is also a recently-built traditional home on one of the old mobile lots in this neighborhood. From assessors records it appears it is now bank-owned. For reasons I don't completely understand it is also listed on my realtor's website. A stipulation in the listing says that offers must be accompanies by a prequal letter. I don't know if this means the bank does not intend to auction..? In any case, the place has been on the market for over 6 months. Assuming the assessors record of sale is anywhere close to reality, I may offer the bank $10k less than they paid the title company. The worst than can happen is that they will say no... And if not, I may be able to get into a better place than I was expecting in this market.

Thoughts anyone on buying bank-owned when the property is listed in the 'normal' fashion (meaning all standard information about building and lot size are disclosed along with number bedrooms, baths, fuel, amentiies, and meaningful photos area included)?

Thanks for all your help! This site is great!
1 vote Thank Flag Link Sun Jan 6, 2008
Hi Jim,

That direction is very popular these days because of the cost factor. In my area of Southern New Jersey where land costs are very high, many builder/developers are going that route and some private folks as well. A few things to consider is that Michael and ruthless mentioned is that todays "Modular homes" are built fairly well. They are generally built with 2x6 exterior walls and were built inside a building so the inside never got wet and there won't be any possible weather related mold problems. Another factor on construction is they were built to be trailered down a highway at 45-50 miles per hour , I doubt a stick built home could withstand that.

As far as investment and return , in our market there is no difference in the resale. Most people wouldn't even know if they were in a modular if not for the 10" partition center wall. Ruthless was right to say not all are created equal, spend some time and go see a few models in your area or talk with some developers or builders that have worked with them.

Good Luck
1 vote Thank Flag Link Sun Jan 6, 2008
I kind of agree with Michael on some of his points. First, however, I believe there is a difference in mobile homes vs manufactured homes. (It's like Chinos and Khakis or Realtors and Real Estate Agents.) All mobile homes are manufactured homes but NOT all manufactured homes are mobile homes. If we are talking a double wide mobile home, the answer to your question is different than a manufactured home that was built somewhere else and placed on a foundation where you are buying it.

Manufactured homes are often far better quality than stick built homes. However, the resale value is far worst. It is not because of wear and tear, it is because of a negative stigma.

If we are talking mobile home, look at the land value and the home value separately. I lived in a community that banned new mobile homes. The land value skyrocketed as the 50 year old single-wide wore out to the point of garbage and new stick built homes went up.

If you get a good price compared to other manufactured homes when you buy, you will be ahead of the curve when it comes time to sell. If you are getting a good price because it is a manufactured home verses a stick built home, you will then need to sell it for a lower price than stick built homes in the future.

One last note on your impression of "manufactured homes are a bad investment." Mobile homes are considered "personal property" not "improved real estate." So the value of a mobile home depreciates like a car, you loose a ton the minute you drive it off the lot. But if you buy a used one at a used price a week after it lost that value, you've got yourself a deal.

Good luck. Feel free to clarify which type of home you are looking at and your other concerns.
1 vote Thank Flag Link Sun Jan 6, 2008
Ruthless, Other/Just Looking in 60558

That's a great question. Like any purchase you must determine the wants and needs. In this case, one of your needs is saleability.

Given the vast improvements to today's mobile homes, their quality is rival to and in some cases better than the homes stick built on the lots. That will help you with your exit strategy.

The biggest things to look at as far as breaking even in your initial investment is this. How did you acquire the property? Large down payment? No down payment? Any personal touches that took money out of your pocket?

Lastly, take a look at your proposed financing. How will your loan perform? Is there a prepayment penalty?

While no one can predict the market in 5 years, taking a look at those items will help you ensure that you maximize profits when you sell, and keeps your compass true when you live there.

Hope that helps!
1 vote Thank Flag Link Sun Jan 6, 2008
Today's manufactured houses (also known as Modular) are very well built and engineered. The house is built in a controlled environment where all the tolerances and measurements can be more precise vs. building a "stick house" on the location. The walls and floors are built and then moved to the site location and assembled. In my area a Manufactured house holds value as well as a conventionally built "stick" house.
0 votes Thank Flag Link Wed May 14, 2014
I sell Manufactured homes in Alaska. If properly taken care of, just like a stick built home, you should be able to sell your home for what you bought it for.
0 votes Thank Flag Link Tue May 13, 2014
In the true sense of the term a Modular is generally crane or roller set from a low boy trailer to a poured in place stemwall foundation and/or over a concrete and steel reinforced basement. Once set up and CO's they are considered every bit the same as a site (stick) built home and are just as good if not better from a qualitative point of view.

By contrast a "Manufactured Home" is built on it's own mainframe chasis "steel framed trailer". But that's about the only difference from its brother the "Modular Home". Both are generally built in the same factory, under the same roof and many if not most of the time on the same assembly line. I've personally observed the entire process dozens of times over the years.

In terms of "green" or "off the grid" both "Manufactured" or "Modular" can be appointed that way. I agree a modular is a better choice in the long run. However, there is a cost difference. Additionally, if you're in a "Manufactured Home Park/Community" you have no choice but to go with a "HUD" home inasmuch as that's the way the community is zoned.
0 votes Thank Flag Link Sun Apr 1, 2012
Mark, I must take issue with your statement "Manufactured homes ARE mobile homes. " Contrary to your opinion they haven't built "Mobile Homes" since July 15, 1976. Your other comment, "The biggest difference and the most important is manufactured homes are not inspected by your local building authority, they are required to have a federal sticker for compliance".

The reason they aren't inspected in the field and the reason they have that "HUD" appliance sticker is because all the necessary inspections are done in the factory by a HUD certified inspector. It doesn't mean that they haven't been inspected. In fact they are more stringently monitored in the factory than in the field by local building ordinances.

Seattle Mortgage: The only time a Manufactured Home is difficult to finance is in a rental park. If it meet all the FHA requirements i.e. foundation system, engineered certification, affidavit of affixture, California required 433A documentation, etc in a resident owned deveopment it'a as easy to finance as a site (stick) built home.

Ruthless: Your assessment re: the depreciation of a Manufactured Home needs some clarification: "One last note on your impression of "manufactured homes are a bad investment." Mobile homes are considered "personal property" not "improved real estate." So the value of a mobile home depreciates like a car, you loose a ton the minute you drive it off the lot. But if you buy a used one at a used price a week after it lost that value, you've got yourself a deal".

Once again if a Manufactured Home is affixed to real property and all the foundation and engineered certification requirements have been fullfilled they are considered REAL to that property not CHATTEL. Hence they are appraised by the same standards as a site built home. Ask any appraiser if they devalue a manufactured home if the meet all the necessary requirements.

I'm not trying to be confrontational or arguementativebut as a responsible general and manufactured home contractor, manufacured home dealer and real estate broker for the past 3 decades I feel it my responsibility to keep people in line with reference to false or uneducated assessments of the "FACTORY BUILT" housing industry.
0 votes Thank Flag Link Sun Jan 22, 2012
The Secret is to buy USED, Just like a car the initial devaluation happens when you first buy them. After a period of time though a Mobile Home will hit a plateau and hold it's value for many years to come.
0 votes Thank Flag Link Fri Jun 24, 2011
I'm way late for this one but it just popped up on my radar so here goes anyway.

Please feel free to log onto our Trulia [] or Active Rain blog [] for more comprehensive information about the MH Industry.

Or you can check our our website and give us a call or drop us an email. We are RE Brokers, Manufactured Home Dealers and licensed, bonded and insured General Contractors and have been actively engaged in the MH Industry statewide for almost 3 decades.

We also do "Lonnie Deals"

PS: Don't listen to any negative or derrogatory feedback. There's absolutely nothing wrong with MH's and it's a terrific way to start into the housing market.
0 votes Thank Flag Link Sat Feb 26, 2011
Manufactured homes have a limited market of buyers. This limits their potential value increases. They're great for an affordable place to live, just don't expected a large investment profit.

Sam DeBord
Seattle Real Estate
0 votes Thank Flag Link Tue Feb 24, 2009
I forgot, in Puyallup, all the home sales places have lost their leases as the commercial landlords are kicking them out to get the realestate. due to this, they are having to sell their lot homes for discount in order to get them out. Freedom homes is in that position right now and you may be able to get a deal there if you are still looking.
0 votes Thank Flag Link Mon Feb 23, 2009
When my job moved me here from the midwest in 2006, the cost of housing was frightful. I needed a place for my 4 kids, a stable environment in terms of schools, and renting was not what I wanted. I looked at alternatives and settled on a manufactured home and placed it in a park. the company helped me out with financing (they are experts on it) and my wife and I picked all kinds of options that we wanted at pretty reasonable rates. what we ended up with was a double-wide with a pup (an add-on section) which totaled 6 beds, 3 baths, with a huge master bedroom, at over 2600 sq ft for $100K. yes, I had to tek a 20yr loan and yes, the interest rate was higher, but my payment even with lot rent was a lot lower then rent . It is 2x6 construction, has a deck, and is highly insulated, with low energy bills.
I have been happy with this alternative and to tell the truth, the neighborhood in this park is great, with 1/4 to 1/3 acre lots. this was a huge home and the residents stood by just with their jaws dropped as the rolled the sections in and set it up, by far the biggest home they have ever seen!!
0 votes Thank Flag Link Mon Feb 23, 2009
Hi Jim,
Manufactured Homes work great for some people. You may not gain the equity of a stick built home but your purchase price and monthly payments are usually quite a bit less for size of the home you get. I have two new manufactured homes listed in Gig Harbor with new detached garage on over 1/4 acre that can be purchased under $205,000. t's easy to spend 250k for a new 1500 SF stick built in this area.
Web Reference:
0 votes Thank Flag Link Thu Mar 13, 2008

You say you have been looking ofr months with out success and now are considering a manufactured home. Historically they do not appreciate as well as a single family home or a condo. If I were you I would lower my expectations of what kind of sigle family home or condo I could afford before going onto the manufactured home route. Keep in mind the area that you want to live in. Not all areas have a large selection to choose from as far as manufactured homes go. What is your budget?
Web Reference:
0 votes Thank Flag Link Tue Mar 4, 2008
Hey Jim, I'll keep it brief... Manufactured homes are not great if you are buying them new and putting them on land. You take a loss usually. Buy a newer one if you like the setting the values should be fine. Just don't buy garbage and keep it newer like within the last 3 years. bank owner by realtor properties are not always the throw 10k lower types. They usually require earnest money up front and can take as long as a month to respond which ties your money up.

They do disclose but won't usually fix anything so unlike other properties that have someone living in it who will fix things if they come up. Bank owned ones are kinda as is and many have been neglected or trashed by leaving home defaulters. My Experience is they many times (not all the time) are worse deals in the ned than a good deal on the regular market.
Web Reference:
0 votes Thank Flag Link Mon Jan 14, 2008
Manufactured homes have a much tougher time with financing which should be a consideration for you when/if you go to sell or try to obtain equity out of this property.
0 votes Thank Flag Link Thu Jan 10, 2008
Thanks for correcting me.
0 votes Thank Flag Link Mon Jan 7, 2008
Ruthless, Other/Just Looking in 60558
Hi Jim,

Bank-owned property using a broker and having it listed in the MLS is very common practice here in NJ. If the property works for you go for it, you are right what do you have to lose? They are strict regarding having prequalification or proof of funds in a cash offer. If the property is listed with a Realtor or managing Broker there is a chance it has gone through the foreclosure process or was given back by what is called a " deed in lieu of foreclosure" . The bank needs to get that one off of the books and six months is a long time for a bank to hold one.

Go ahead and make the offer but even though it says "AS-IS make sure you do your due dillagence and get a home inspection .

0 votes Thank Flag Link Mon Jan 7, 2008
Jim, I am a Realtor who lives and works in Gig Harbor. Gig Harbor has shown 6% to 12% increases in value in this past year. This is important because the rest of the country is not doing so well as you know.
The expectation for our real estate is very positive. With the new hospital, all of the new shopping areas going in since the bridge has opened is all a good sign. Investors look for these factors before the invest and it is always a good idea to invest in the first phases. Location, Location, Location is what determines value. I would suggest that you buy what you can afford and make sure you get the poper loan because that is the other important factor in any real estate transaction. I have helped may of my clients aquire wealth through real estate investments and would be happy to help you as well. If I can be of service to you please don't hestitate to contact me. It is a great time to be in the market as a buyer. GOOD LUCK!
0 votes Thank Flag Link Sun Jan 6, 2008
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