In this type of market, I'm trying to be flexible in finding deals so I'm looking at everything. I have mix reservations about this, because in general its better to focus on a certain type of REI instead of being a fog light looking at everything. Right now, I'm running numbers on apartments, single family, lot splitting, and now mobile homes.. I am making an effort to run the numbers because ultimately this tells me the story if its a deal or not.
So, I got a lead from my birddog, a young gal got a double wide. She was asking 7k for it. Didn't seem to be a bad price. I looked at it yesterday and its funny, because I felt out of place looking at it. I am use to looking at houses, not mobile homes. Sure the fixtures are similar, but I was still thrown off, so I didn't ask enough questions.
Basically, its in ok shape. The walls need to be painted, but if I can live with the dark brown carpet, its almost turn key. The price of 7k is not bad.., but you know me, I need a great deal so I pushed for lower.
I told her that the mobile home market is saturated, and holding costs are long, so based on fixup costs, I told I would give her 5k for it! She told me that her husband (soon to be divorced) didn't want to go lower than 6k. So, I may be close to a agreement. This gal did not do any market research and doesn't really know the value of it. Hoenestly, I didn't know either til last week.
So I played with some numbers to tell me the story. I came up with a graph that tells the cost of the mobile home based on area and year built. The data points are based on recent listing prices from websites and newspapers. These prices assume retail and are in good condition. In general, these numbers are considered only an average using the interpreted line, so I need to be careful not to be unconservative or too conservative. I plan to inlcude more points to make it more accurate, but the trend line is very useful when comps are not available.
Anyway, it should sell for 13k-14k. I expect some holding costs and I need to fix it up so buying it for 5k plus birddog fee seems like a good deal. I could sell it fee simple or do a Lonnie schrugg's deal by creating a note and making twice as much. I'll pay cash for it.
The gal needs to talk to the exhusband and her father. Hopefully, she wants out bad enough. She doesn't seem to be in a hurry since she needs to finish school.