The beauty of Mobile Home Investing is that the rehab is easier, cheaper, quicker. On top of that, you don’t need to make the place luxury quality.
Your goal in the rehab process is to provide safe, clean living quarters to people. This is affordable housing, after all. The fact is that it’s a bad investment decision to make things too nice inside the home. You’ll never see a return on those extra rehab dollars.
Things you need to know about the rehab process:
- 1. We are not building the Taj Mahal! Your goal is clean, structurally sound housing.
- 2. Always check references before putting someone on the job!
- 3. Budget for more than you think it will cost.
We typically don't hire contractors because they jack the prices up.
It’s best to go with a trusted handyman. You can easily find guys on Craigslist, but make sure to check their references!
We recommend getting insurance on the home for the period after you buy and before you sell. At a minimum, put liability insurance on the place. You can go through National Real Estate Insurance Group- I pay about $13 per month per home.
Sometimes people “roll the dice” on this, but that’s a risky move. There’s a saying, “Everything’s fine until it’s not”. Don’t wait until it’s not.
Main areas to look at:
- 1. Roof/ceiling for leaks
- 2. Dry wall work
- 3. Soft Spots in the sub floor
- 4. Floor covering (carpet, linoleum)
- 5. Paint
- 6. A/C
- 7. Smell
Let’s Go Into Detail On The 7 Problem Areas To Look Out For:
- 1. Roofs:
Typically these homes made a huge transition in 1994. In homes manufactured after 1994, 90+% of the time you’ll have vinyl siding and shingle roof.
So if it is a newer home, you got your shingle roof, just like a stick built house. Normally you can get away with patching shingles- that’s the cheap and easy option. If all the shingles are shot, you can get a handyman to do a full tear off and replace all the shingles.
If the plywood underneath is rotted out, you may be looking at an expense between $3,000 – $6,000, so be very aware, as that can totally kill the deal.
Check for signs of leaks inside the home by looking at the ceiling. Many times the leaks are old and the roof has since been patched (but you can still use this as a negotiating tactic when buying!).
Older homes before 1994 usually have metal roofs. They require something called “cool seal”. You’ll need to have the roof cool sealed every few years. Its basically a tar that is rolled/mopped onto the roof. A 5-gallon bucket of it is around $75, and you’ll be able to finish most roofs with two buckets.
- 2. Dry Wall:
There are normally going to be holes in the walls or wet spots from leaks. Not to worry, this is normal. It can easily be patched, primed, and painted, and look brand spanking new. If there is mold present, get some Kilz from Lowe’s or Home Depot and paint over it- it will kill the mold and make it safe for re-sale.
- 3. Soft Spots in the Sub Floors:
***This is probably the most common issue with these mobile homes***
The majority of 80s and 90s MHs will have soft spots in the flooring. This is not a huge issue either. You can easily “cut and paste” sections of the sub floor rather easily, and materials and labor is cheap.
There are 2 types of sub floors: Particle Board vs Plywood.
Particle board is a cheap material consisting of sawdust and some other “leftovers” glued together and pressed into sheets. It’s very cheap, and low quality. When particle board gets wet, it expands and or crumbles.When replacing, please replace with the same thickness plywood instead.
Most mobile homes that you will be dealing with are constructed primarily with particle board. So test all the areas that may present problems (around the tub and toilet, underneath windows, at the breezeway, high foot traffic areas, near the air handler). Test the integrity by stamping your foot on the floor. But be careful your foot doesn’t go through! I’ve fallen through more than one mobile home floor, and it’ll ding up your legs big time!
The best sub floor to use as replacement is 3/4″ plywood sheets. You will hear sellers talk about this when trying to sell you a home because it IS a big selling point. If the floors have been replaced with plywood, they should be sturdy for years to come.You can then use this selling point again when trying to sell the home to your end user and justify the price you are asking.
- 4. Floor covering
Many times the carpets will be in pretty bad shape or the linoleum will have tears in it.
I do my best not to replace the carpets, if I can help it. I will simply have them vacuumed and steam cleaned. If you do replace the carpets and linoleum, go cheap. I don’t even place padding undernearth the carpet. Your handyman should have no problem laying this carpet (and doing any of the other tasks we’re talking about here).
- 5. Paint and Primer
It’s amazing how far a little paint can go! It can literally transform the look of the home. I hardly ever paint the outside of the home, normally a simple power wash does the trick. Again, for areas on the walls that have had any mildew or smell, I highly recommend using a primer called “Kilz”. This stuff is famous is the mobile home world because it completely locks in any smell or moisture. So in any problem areas, use kills as the primer and then just paint over it.
- 6. A/C & Heat
Having central heat/air is HUGE, especially in hot climates. And most mobile homes are located in hot states.
Central heat/ air increases the value of the property at re-sale time, and makes it much more attractive to your buyers!
Use this both ways, though. If it doesnt have heat and air, that’s a GREAT negotiating point when purchasing the home.
Call every A/C guy in town. Typically the mom and pop HVAC repairmen stockpile used units and will resell them dirt cheap. Build relationships with these people. Let them know you’ll be sending them more work than they can handle if they treat you right.
Once you do that, you can get great deals on places that don’t have central heat/ air and then have a unit installed for as cheap as $1200-$1500. That investment will increase the value of the home $3,000 or more usually.
It’s not that you can’t buy and sell places that only have window units, but you just need to be aware of what your market really wants.
- 7. Smell
It is quite common in MHs to have some sort of odor. Luckily, this is common and can easily be treated.
Places the smell can be coming from: Carpets, walls, and subfloors.
Many of these sellers are dog and cat owners, which means there are going to be some accidents. Depending on how bad it is, you may need to replace the carpets if steam cleaning doesn’t do the trick. If you see any bad spots on the sub floor where there has been habitual urination, you can do 2 things:
1. Apply Kilz to the area
2. Replace that spot in the subfloor.
If it is really, really bad you may want to go ahead and replace that section of the subfloor. Sometimes you will run into places where the seller has lived there for 10+ years and has been smoking inside the whole time. The smell is pretty bad and the walls are yellow (used to be white)! This is when our friend “Kilz” really comes to the rescue! You can scrub the walls down with some industrial degreaser before applying the Kilz.
Again, this will largely get rid of the smoke smell. Paint over the killz once it drys and you are good as new! Depending on severity, you may consider putting 2 layers of killz to ensure the smell is locked in!
The amount of rehab you do should depend on how cheap you were able buy the home, and what people are willing to pay for that type of property in a certain condition. Keep your end-buyer in mind at all times!
Most of the time I buy as-is and sell as-is. I just do a clean up of all the junk that is left in the home.
You can always make additional repairs if you have a buyer who is really interested in the home but wants something done a certain way. Quite often, I’ll give a discount to my end buyer to do the work themselves (sweat equity). This minimizes my upfront capital expenditures, time needed to re-sell and energy managing the project.
Some buyers like this because they are able to customize the home to their liking. Oftentimes, they are excited to do the work because for the first time, they have a home that is theirs that they can customize.
The whole point I'm trying to make here is to do as much work as necessary to sell the home, and no more. Most of the time you won’t get your money back out of it if you go above and beyond.