In today's post we will discuss a commonly overlooked red flag that newer investors of manufactured housing miss while screening a prospective manufactured home deal. This blind spot and the subsequent suggestions made to you below come from a combination of my own mistakes, successes, and advice I give to new mobile home investors in the business.
Perhaps one of the biggest resale nightmares that newer mobile home investors miss is the notorious “very small bedroom”. Typically found in 1960-1985 model singlewide mobile homes, these small bedrooms will detract significantly from the appeal and resale-ability of your newest mobile home investment.
These small bedrooms range in size but an average is close to 8ft by 6ft. In these small bedrooms you may be able to spread your arms apart and touch both walls, or at the largest these rooms will hold a full-sized bed and little more. Bottom line is that if you walk into a mobile home bedroom and think the room is way too small than your prospective tenants and/or buyers will have the same thoughts.
These small rooms are a product of the average mobile home layout. In 2 and 3 bedroom homes the hallway can cut into the width of 1 bedroom in a split-plan mobile home.
Here's an example: Imagine a master bedroom on one end of a 12ft X 65ft mobile home. Attached to this master bedroom is the living room, then kitchen, then hallway leading to 2 more bedrooms on the opposite side of the home. The hallway which ends at the second bedroom means that the second bedroom is the entire width of the home. However because the 3rd bedroom is located next to the 2nd bedroom (closer to the master bedroom) it is shortened by the width of the hallway. Does this make sense?
When looking at a mobile home with a notoriously small bedroom you should reduce the amount of bedrooms in the home mentally by 1. Now offer your purchase price and/or terms based on a mobile home with 1 less bedroom .
Likewise when you are selling a mobile home with a very small bedroom you have a few choices. Let us say you are selling 3 bedroom mobile home with 1 very small bedroom . You can choose to advertise the home as a 3 bedroom or 2 bedroom. If you advertise the mobile home as a 3 bedroom, and price it accordingly you will very likely hear an out-pour of unpleasantly surprised prospective tenants and/or buyers that will tell you their complaint is the very small bedroom. This can lead to wasted time, confused feelings about mobile home investing, and ultimately no sale.
Better method: On the other hand if you advertise your 3 bedroom mobile home with the very small bedroom as a 2 bedroom, and a price it to match a comparable 2 bedroom, then you will find tenants and/or buyers that are very happy to find a mystery 3rd bedroom. These small bedrooms are better suited as an office, baby room, or child's play room.
In conclusion there is a memorable saying in real estate investing that goes, “Price cures most worries”. With that in mind it is my intention to save you headaches, holding costs, confusion, and dollars when you go to resell your next wonderful mobile home investment. As investors we are in business to provide value and help sellers and buyers, but not to step into a seller's shoes and take over their problems.
Stay in control and make sure you know what you are buying and your exit strategy.