Best flip (percentage-wise)

Saw this mobile home pop up … 187k…

https://www.redfin.com/CA/Capitola/750-47th-Ave-95010/unit-57/home/17495649

My first thought is, hmm… next to the Jewel Box, isn’t that the Surf and Sand park, where the city gave up in their lawsuit in 2012 and then the parkowner raised rents from $250 to as high as $2500 a month? With the new space rent, most owners were forced to sell, the entire park (100 units?) was suddenly for sale, listed $50k, $40k, $30k… most sold for $20k (value of the unit) and were relocated to another cheaper park, probably in Salinas or San Jose.

Well… well… this one is asking $187k… and yes… purchased in 2012 for $15k. Space rent is only $1700, I suppose it does not have an ocean view.

These units sold in 2005 as high as $560k (ocean view with space rent of $250/mo), reason was, it was compared to buying a condo with $250 HOA. Of course, the HOA would not try to kick everyone out and redevelop the land.

With $1700-$2500 space rent, people would not buy the unit, because that payment would finance a $500k-$700k house.

I’m posting this mostly as a warning to anyone who would consider buying into a mobile home park .If you buy, make sure to buy where the land is included in the price. Only buy if you own the land. Yes, it’s much more expensive.

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The price looks to be about par with the Valley. How’s the space rent? Does it sound reasonable?

There was an article on Mercury News couple years ago, telling the story of how some engineer type making 6 figures buying mobile homes. It’s one of those huge mobiles that look like regular houses. At the time I thought it was incredibly stupid. I still think it’s stupid.

Space rent is $1700

I know, is that the market rent? That does sound high.

ptiemann,

Excellent, Special thanks for sharing such nice one!

Nowadays, I used to see good flip homes like this. Before even looking at this home, they are sold.

https://www.redfin.com/CA/Sunnyvale/359-Stowell-Ave-94085/home/1115014

This one: Only one open house. Agent told everyone the house is sold when walking into open house !

https://www.redfin.com/CA/San-Mateo/23-N-Quebec-St-94401/home/2047430

The open house is cancelled, sold immediately !

The fact is I am able to identify clearly which are good flips and how attractive the profits are !

In redfin, we used to see/get lot of visibility on such issues. We need to encourage viewers post more and more stories to share the details.

Even this week, I see an excellent choice(not mentioning the home here) that can get appx 300k in flip provided it is sold as listed. Naturally 115 favorites in redfin which may bring appx 100k over the list price with full cash offer (possibly full cash flipper). This has 100k-200k profit level.

I know for fact that some people pay $2500 space rent. You may have the wrong understanding of what space rent means. It is not what the occupant pays to the owner of the mobile home to live there. Space rent is what the owner of the mobile home pays to the land owner to park his mobile home there.

In this park, the owner decided that they want to close the park and develop it with condos (or maybe another type of new construction). So, they jacked up the space rents, to encourage people to move their trailers elsewhere.

I do not think that this property will sell for asking price, but Icould be wrong. It sold for $15k in 2012, and I think that is the value. Maybe it is worth $20k now. But not six figures. However, if there is a buyer who finds this property on redfin and he insists on buying it, their realtor will probably not stop them. It might sell for near asking. It might also snow in Florida next 4th of July.

You may think that no educated person would buy this kind of property.

4 weeks ago, I signed some loan documents with the notary public. This guy had bought a condo in Santa Cruz for about $180k at the bottom of the market (short sale), it is worth $450k now. I think he has probably $150k loan on it, so about $300k equity or $270k after a sale.

And what does he tell me? He wants to sell the condo, pocket the $270k … and buy a mobile home all-cash. He showed me a prospective listing,

He had not even realized that there was a $750 space rent due. We had only a few minutes of time, I told him to google about what happened to the residents of that other park.

He made a lucky genius move with his purchase in 2012. Turned $30k down payment into $300k equity in under 4 years.

And he was about to throw it all away, as far as I am concerned!

That’s exactly how I understand it. :slight_smile: So no misunderstanding there. That’s why I think $1700 is high rent for a small piece of lot.

The flip side is that mobile homes and mobile home parks are great business. There are so many gullible people that even the Warren Buffett couldn’t resist buying in.

I agree, MH parks are good rental business, esp once you own the units too.

There have been a few times I’ve clicked on a listing thinking it was a decent-looking house and location with seemingly good potential as a rental home (long term or airbnb), to find out it was a mobile/manufactured home. Sometimes it isn’t obvious to me whether the land is or isn’t included even in the property details. There should be a separate category for them, as they have for condos.

Redfin is better by indicating the space rent in many cases, but if the sale doesn’t include the land (or the lease) could buyers wind up without a space? How much control or reponsibilty do landowners have wrt these sales?

The trailer is still for sale for $135k…no takers…Must have read this forum