Results 1 to 8 of 8

Thread: Question about buying a manufactured home

  1. #1
    Junior Member
    Join Date
    Jun 2012
    Posts
    2

    Question about buying a manufactured home

    Hello All,

    I am a LONG TIME lurker, finally coming out. First of all, I want to say how much I have learned from all of you! Now, about my question.

    I am an American and I currently live in South Korea (hence my name). I have never been a homeowner and an opportunity has arisen where I could buy a manufactured home in the US. Here's the situation: my mother owns a paid for manufactured home in a community in Austin, Texas. She owns the home outright but pays a monthly lot fee of about $450. My husband and I will be moving back to Austin in December and living with her. I have thought about buying the house from her as it will help her out financially. It's probably worth about $35,000 at most. The house is pretty nice--it has four bedrooms and two bathrooms and my mom has put in hardwood floors and a lot of other upgrades. To buy a "real" house in Austin ranges from $150,000 to over $300,000.

    What do you guys think? Is this worth it?

    Thanks!
    Rebecca

  2. #2
    Senior Member SteveinMN's Avatar
    Join Date
    Mar 2012
    Location
    Saint Paul, Minnesota
    Posts
    6,526
    Hi, Rebecca! Welcome!

    I think it will be hard for us to say if that home is "worth it". Much depends on how it is priced relative to other manufactured homes in the area -- what real-estate agents call "comps" (comparables). If manufactured homes near your mother's place go for $20-25,000, then her place has to offer something special to be worth more. In that respect, it's like any other home.

    Keep in mind that the housing codes/building standards for manufactured homes are substantially lower than for "real" houses. Walls very likely will be thinner and less well insulated -- a consideration where it gets really hot, like Texas. You won't have a basement shelter in the case of bad weather -- where will you go during a tornado warning? Is it important to you to have some space around your home for pets or gardening? What does the lot fee include? Remember that resale on manufactured homes is lower than for real homes for these and other reasons.

    Finances are important. Not that we need an answer, but do you have the cash to buy outright or will you be financing? If you're financing, how does the monthly loan amount and $450 lot fee compare to a mortgage on a real house? If you're borrowing $30,000 over 15 years and paying for insurance and the lot, my quick-and-dirty calculations say that will run around $710 a month. What would it cost monthly to buy a comparable real house? $450 for a lot each month sounds like a good amount of money to me, but I have no idea how that compares to other lot fees around Austin.

    What is your timeline for staying in Austin or in the manufactured home? Is Austin just a way station or where you and DH will stay? As with real houses, buying for a short term is not always the best financial choice.

    Time to put your thinking cap on!
    Success is to be measured not so much by the position that one has reached in life as by the obstacles which he has overcome. - Booker T. Washington

  3. #3
    Senior Member
    Join Date
    Dec 2010
    Location
    Phoenix
    Posts
    608
    I currently am trying to sell a manufactured home on 3 acres outside Nashville, TN. While I enjoyed living in it, now that I'm trying to sell it I'm finding that it is extremely difficult for anyone to get a loan now for a manufactured home. One over 10 yo is very difficult, one that is 20+yo practically impossible to finance. I just bought a single wide mobile home in Phoenix on a rented lot. My lot rent is $415/mo, and with all utilities is still about $100 to $150 less a month than the 1 br apartment I was in, and I have more room and more space around me. I also only paid $5.5K for the newly remodeled home. The person I bought from must have lost a lot on the remodeling. I put it on a no-interest credit card to be paid off over the next year. So, my suggestion is to weigh all the options, both what it mean financially now and also what you may need to walk away from when you are ready to sell. For me, I can walk away from my single-wide after a year or so without looking back even if I just hand over the keys to the park manager and say have a good day. The double wide in TN, not so much and it is a financial black hole.
    Bad spellers of the world, UNTIE!
    formerly known as Paula P

  4. #4
    Senior Member reader99's Avatar
    Join Date
    Jan 2011
    Posts
    742
    My friends who live in a manufactured home in FL are having a very hard time getting homeowner's insurance because it is a manufactured home.

  5. #5
    Senior Member
    Join Date
    Jan 2011
    Posts
    3,319
    What shadowmoss says is right. It was the same financial market for manufactured homes in the 70s and 80s. Did not matter how valuable the home was due to limited housing in area. The age of the home was critical for financing.

  6. #6
    Member
    Join Date
    Jan 2011
    Posts
    95
    Hello and welcome! I recently bought a condo in Austin, and some of the problems raised in this thread are also an issue there. Condos lag behind single-family home values, have fixed fees, and a limited pool of buyers. They're also small and low-maintenance, which was exactly what I wanted.

    It sounds like manufactured homes have all the same problems, without the unique upsides, and even more invisible in the housing market. I only know one couple who's lived in a manufactured home - they were fleeing an apartment catastrophe, not looking to buy. I was surprised at how big their new place was, and that the neighborhood seemed decent. I think manufactured homes are just not on the radar for a lot of people. For resale, you'll be competing with all the "starting in the $150s" neighborhoods going up on the edges of town. (The edges will move, but we are never going to run out of dry ranchland to put houses on.)

    More general considerations:
    - How long are you planning to stay? Is it long enough to make buying cheaper? (NYTimes calculator here!)

    - Do you need four bedrooms, or would you look for a smaller place if this weren't available?

    - Is the location right for you? The traffic here is terrible, and I would strongly recommend living near your work. (Or if you work downtown/University, on a good bus line.) If the location is fantastic, the land rights are vital. Is the "lot fee" an HOA fee, or is it rental? If the land is leased, the owner could sell to someone who wants to build a WalMart and/or condos there.

    - You mention helping your mother out, and I think that's a whole separate huge issue. Does she want to leave and get rid of the house? Would renting from her and giving her an increased cash flow be just as good? Do you plan to live with her permanently?

    I will say, lack of basement is not a dealbreaker. The closest I've seen to a basement in an Austin residence was a postwar house with a bomb shelter out back. (Full of water and mosquitoes. Not a selling point!)

    I don't know your situation, but would you be able to hold onto the house indefinitely? Or could you potentially get into a situation where you need 35K for a down payment or to move out of state/country, and have to sell in a hurry? I bought from someone who needed to sell quickly, after only two years. (They wanted to buy somewhere else, but couldn't handle two mortgages at once.) They lost money by owning this place.

    Final suggestion - if you do decide to buy your mother out, get an appraisal and inspection done. Just as if you were buying from a stranger.

    BTW - Welcome to Austin in advance!

  7. #7
    Junior Member
    Join Date
    Jun 2012
    Posts
    2
    Thanks for the feedback! My short term goal is to move back to Austin and get resettled. I have agreed to pay my mother rent, so that will help her out. As I mentioned, I have never been a homeowner so I have no idea if buying a manufactured home is a good deal or not. One thing that really bothers me is the lot fee because the land is leased and not private property. The house is located in a manufactured home park and it looks like a subdivision. Each house has a yard and a driveway and a shed or garage. The lot fee is kind of like a HOA in that the streets are maintained, there is a trash collection service and there is a community center with a pool, etc. I know that my mother is going to have a hell of a time selling her house. It is over ten years old and while it is nice and in very good condition, the park is putting up brand new homes that have really nice features like fireplaces and granite counter tops, etc.

    Mer05--thanks for the welcome! I grew up in Austin and I went to UT. I know the traffic is bad, but I currently live in Seoul which makes I35 during rush hour look like a picnic

    Thanks again for everyone's suggestions!

  8. #8
    Senior Member SteveinMN's Avatar
    Join Date
    Mar 2012
    Location
    Saint Paul, Minnesota
    Posts
    6,526
    Quote Originally Posted by rfkorea View Post
    I know that my mother is going to have a hell of a time selling her house. It is over ten years old and while it is nice and in very good condition, the park is putting up brand new homes that have really nice features like fireplaces and granite counter tops, etc.
    There's no reason you couldn't add fireplaces and granite countertops to your mother's place (economics aside). In selling, you'll face the same problems anyone with an existing "real" home would face when they're building brand-new homes just down the street. What you have to sell is immediate availability and maybe a nicer level of accommodation than "builder grade". Buying this problem, however, is not a smart-money move.
    Success is to be measured not so much by the position that one has reached in life as by the obstacles which he has overcome. - Booker T. Washington

Thread Information

Users Browsing this Thread

There are currently 1 users browsing this thread. (0 members and 1 guests)

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •