Real Estate Investing

My friend Mark is looking for a house.  He’s a first-time buyer who is very concerned about his monthly budget - especially since there’s no end in sight for climbing gas prices.  To this end, we’ve been quite conservative in our search for his new home.

We went yesterday afternoon to a very popular town nearby.  The town seems to be immune to national economic woes as it continues growing in retail, housing, and jobs.  There are several affordable homes in this community, so I made some appointments and we headed over in my car laden with water, fresh fruit, and Oreos for snacks (afterall, who doesn’t like black crumbs in their teeth?).

We found one home that looked perfect online, but when we got there I was immediately concerned about the cracks in the home and shift in the bricks which signal major foundation problems.  Although foundations can be fixed, the neighbor is the one who clanged the death knoll for the property when he told my buyers mother, “That couple doesn’t need to buy this. They don’t belong here.”  He went on to explain that it was a high-crime area topped off with a shooting across the street the night before.  He was very convincing.

We have found a couple of other homes, but my friend keeps going back to a mobile home.  The interest on the loan will be two points higher, but it’s half the cost of a site-built home.  Personally, I have some major concerns against buying a mobile home:

1. Bad weather.  Mobile homes - even those on a permanent foundation - are decimated by very severe weather.  However, if you find a “Wind Zone 3” mobile home, it can withstand hurricane strength winds.  We’ll have to try to figure out what type of wind zone the home has been built for.
2. Resale.  The ability to resell a mobile home must be considered before purchasing.  If the home you like has been on the market for 152 days, it will likely take you equally long to sell when you’re ready to move out.
3.  Insurance.  The cost of insurance may be much higher on a mobile home than a site-built home.  According to Insure.com, “While mobile homes are relatively inexpensive to buy, they can be costly to insure.”  Insurance is based on risk and the main risks are fire (they sweep quickly through mobiles), storm damage, and frozen pipes.
4. Neighbors.  Many mobile home parks have neighbors living very close to each other.  At some point, a buyer needs to consider whether the noise level and proximity of other homes is an issue.

On the positive side of mobile home living, you can have a lot of space for not as much money and many new models today are just gorgeous.  I’ve seen homes with beautiful fireplaces, amazing decks, huge bedrooms, and many other amenities that are found in site built homes.

Happy Mobile Living!