Help with property buying advice.

[jbailly]

Hi all,
Looked at a house yesterday. Is a foreclosure on 1.03 acres, 3 bed, 2 bath, manufactured home (double wide) had a garage, but this last winter took it down, still has a concrete pad for said garage. Has water well and in ground septic. Needs all new carpets at least from abandoned pets, been empty since at least January this year. Property has some junk and garbage laying about. Before we make an offer we will have a through inspection done on everything. Asking price is $35k, which an improved lot (1 acre with well and septic bring about $15-25k in this area. It sold in 2007 for $101,562 according to my research. Anybody ever do something similar?

 

[Zeke]

Foreclosures are usually a lot less than straight forward. Even though there is an 'asking' price, the deal could take months and months. I'd put in an offer for what it's actually worth less costs to clean up and any real estate costs. You might visit your local AHJ and see what's required to remove any liens they may have for violations of any kind. Then on to the county offices to see about other liens. They will come up, if they exist, eventually, but you don't need any surprises 3 months down the road.

Knowledge is power.

 

[sublimate]

Are you taking a loan or can you pay cash?
Getting a loan for a foreclosure is tricky and difficult.

 

[scdealer]

The year the trailer was manufactured is important. Based on the info you have provided, I would say only offer what the improved land is worth. Probably not much value in the trailer unless it is very new. As others have said, it is very difficult to get a loan on a foreclosure. It is also very hard to get a loan on a trailer (as it is not real property). Combine the two and you have an uphill battle on the loan.

When you say foreclosure, was the house foreclosed and the bank is now listing it w/an agent? or, are you bidding on the property at a foreclosure sale/auction? Those are two very different animals where financing is concerned.

 

[jbailly]

Home manufactured in 2005. Bank owned listed thru local real estate agent. We will most likely get a loan for a large sum (maybe $80k) and be able to fix a lot of things, but we would DEFINITELY have it checked over EXTENSIVELY before making any offers.

 

[Leaflessshadetree]

BTW: There is a difference between a manufactured home and a trailer. (at least in my area) Manufactured homes aren't normally thought of as double wide.

 

[Voi]

BTW: There is a difference between a manufactured home and a trailer. (at least in my area) Manufactured homes aren't normally thought of as double wide.

Same here. In my area there are double wide mobile homes that are two mobile home halves attached together and there are modular homes that look nearly identical but are designed to be set on a foundation.

Quality between the two can be quite similar or drastically different.

Asking price is $35k, which an improved lot (1 acre with well and septic bring about $15-25k in this area.

I'd go look at some of those lots and get an idea if yours in more like the 15k or the 25k side of things.

I'd also find out the specs on the septic tank and leech field and see if it matches the type of septic that comes with the bare lots. In my area septic systems even five years old are no longer grandfathered in so lots with even 1500 gallon septic systems can be worth less than those with no system at all. But that's a unique situation since we had a very strict septic ordinance pass in the last five years or so.

 

[scdealer]

I'm not trying to rain on your parade, but I have a hard time believing you will be able to find financing for the deal you describe. Also, no one is going to loan you more than the appraised value of the property (a bank will not consider a 10 year old trailer as part of the value of the property.) You need to have cash reserves to make the repairs. It also sounds like the bank is listing at full market value. Consider saving up some cash and actually buying a foreclosure at the forclosure sale, that is where you get your discount.

Get your financing in place before you start looking no matter which route you go.

(I know all of this because I just went through it).

Good Luck.

 

[jshillin]

If it only needs carpet and clean-up it sounds like a deal, but there is no way I'd try to take out a mortgage for $80k on it... I don't know if a bank would even give you that much for something they know is selling for $35k. Take the loan for whatever it is and then you pay the down payment and closing out of pocket. The monthly mortgage should be super cheap leaving you with plenty of money each month to buy the things you need to finish it.

 

[theoldwizard1]

Are you taking a loan or can you pay cash?
Getting a loan for a foreclosure is tricky and difficult.

Not with more than 20% down !

 

[theoldwizard1]

If the pet stains have penetrated the subfloor it will be next to impossible to get the smell out.

In the long run, I would scrap the place and buy a new double wide.

 

[jbailly]

So the common idea here is the house (double wide or manufactured) is worth nothing? It just needs a little clean up. My thoughts were it could appraise for close to the 105k it sold for in 2007 so I should be able to get a decent loan for it, maybe it is a bad idea, maybe trashing it and putting a brand new one there would be better, not sure. I assume the places that sell these will take old ones on trade even if they do only give 35k for it that would pay for the land and our mortgage would be only on the new trailer. I could probably come up with about half of the 35k without too much trouble.

 

[jbailly]

Ok. I obviously don't know enough about this subject. So you are saying there is little if any value there because it hasn't been already bought? I don't understand that exactly but ok. If we proceed further with this property we may just pull the existing house and put a new one in it's place. If I buy it I won't offer any more than a bare 1 acre parcel should bring.

 

[scdealer]

A double wide is like a car (personal, not real property). It depreciates in value every year.

The original price might have included the (two year old at the time) trailer. Also, '07 was the top of the real estate bubble and everyone was overpaying.

If there was a lot of value in that property, someone other than the bank would have bought it at the foreclosure sale.

 

[dave89iroc]

the question is, is it a double wide mobile home, or is it a manufactured home?

 

[bazzateer]

I'd only consider paying what the land is worth as a building plot, assuming you can get a permit to build a proper house on it.

 

[GDPossehl]

Unless it's an exceptional lot (creekside, mountain views, sitting on a large oil deposit, etc), I'd say you're probably better off going for a bare lot that doesn't require a bunch of red tape, research, and unknown risk. It sounds like it's not exactly a deal anyway. Plus, I'd rather not have to deal with someone else's neglected property/house/SEPTIC.

 

[Jjbates]

Ok here's my $0.02s. Everyone here has brought up great points that should definately be took into consideration. That being said, deals can be had in foreclosures if you have cash in hand and know how to do most of the work. I myself would only buy it if I liked the property and would give no value to the mobile home. It has value, we all know that, but not to the bank. And if your paying cash, you become the bank. Oh and always low ball. What's the worst they can say? No. Oh well. Deals come to those with patience.

 

[finn]

The well and septic have residual value also. If the 10 year old double wide is structurally sound, and that type of housing is common IN YOUR AREA, I wouldn't be afraid of it. You need a place to live, after all, so it probably beats paying rent.

Just don't expect to get rich off of it.

People on this site seem to forget that many people in different parts of the country and of different economic situations have different housing needs and availability.

What works and is commonly available in Palo Alto, suburban Chicago, or Bolder Colarado is probably much different than rural Kansas, or New York City, for that matter.

 

[Jjbates]

The well and septic have residual value also. If the 10 year old double wide is structurally sound, and that type of housing is common IN YOUR AREA, I wouldn't be afraid of it. You need a place to live, after all, so it probably beats paying rent.

Just don't expect to get rich off of it.

People on this site seem to forget that many people in different parts of the country and of different economic situations have different housing needs and availability.

What works and is commonly available in Palo Alto, suburban Chicago, or Bolder Colarado is probably much different than rural Kansas, or New York City, for that matter.

Well said.

 

[Charles (in GA)]

If a double wide mobile home then it probably will have a title on it. If so, then the bank most likely doesn't have it. Its lost, got kept by the previous owners, etc. If you don't have that piece of paper its worthless.

Modular and mobile home and double wide are used interchangeably, but a true modular home is built of prefab sections brought to the site and put on a permanent foundation. If it has a metal frame underneath it, then it is simply a double wide mobile home, transported on axles and in two halves, to the site, and assembled, those lose value fast as it ages.

 

[TractorJeff]

The well and septic have residual value also. If the 10 year old double wide is structurally sound, and that type of housing is common IN YOUR AREA, I wouldn't be afraid of it. You need a place to live, after all, so it probably beats paying rent.

Just don't expect to get rich off of it.

People on this site seem to forget that many people in different parts of the country and of different economic situations have different housing needs and availability.

What works and is commonly available in Palo Alto, suburban Chicago, or Bolder Colarado is probably much different than rural Kansas, or New York City, for that matter.

This includes Up STATE NEW YORK and PENNSYLVANIA and WEST VIRGINIA

 

[gahrajmahal]

Hey all, I am a relatively new real estate agent. Yea, I know, I know. If the property is listed by a real estate agent already find yourself an agent to work for you as the buyer. The seller has already agreed to pay commissions.
That said as your representative I would research what has sold nearby recently. I would check the tax records of that property and many of the neighbors to get a feel for the market there. I would then take you on a tour of other comparable properties.
Also, like others have said, go to the bank and see what and if they would lend for this property. They have many great finance deals and often my buyers are surprised what they find out once they do their homework. Good luck.

 

[Charles (in GA)]

The well and septic have residual value also. If the 10 year old double wide is structurally sound, and that type of housing is common IN YOUR AREA, I wouldn't be afraid of it. You need a place to live, after all, so it probably beats paying rent.

Just don't expect to get rich off of it.

People on this site seem to forget that many people in different parts of the country and of different economic situations have different housing needs and availability.

What works and is commonly available in Palo Alto, suburban Chicago, or Bolder Colarado is probably much different than rural Kansas, or New York City, for that matter.

This includes Up STATE NEW YORK and PENNSYLVANIA and WEST VIRGINIA

And a good part of Georgia and Alabama that is rural.

 

[HoosierMark]

Here pretty much are the facts on the differance between a manufactured home and a modular home. The description of a mobile home is a thing of the past because of all the negativity associated with the old ones. IN 1980 the US Congress changed the name of mobile homes to manufactured homes in all federal laws and publications. All manufactured homes built after June 15, 1976 must conform to standards set by congress and they will have a red and silver seal on each section, typically in the back outside corner. This is called the HUD label and it has serial numbers. A modular home is a module built in a factory and transported on a trailer to the site then it is unloaded on to a foundation either by crane or special rollers. The trailer is then returned to the factory for use again.
The simple way to determine if it is a modular or manufactured is to look for the tags or at the frame. Virtually all manufactured units have a steel undercarriage while modulars have wood floor joist. (There are some manufactured units that have wood frames but they are very rare. I have only seen one since 1977 when I got my brokers license)
This could be a great deal for the OP. Check it out as best you can. Assume a worst case scenario that there are a lot of problems, figure out the cost to make it liveable and what it will be worth if it is all done. That will tell you if it is worth the cost. I have bought numerous foreclosures and if this one were in my area, I sure would be looking hard at it. PM me if you have some specific questions.




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[T_R]

Seems similar to what I did. I got 2 wooded acres, a decent livable single wide and a poor condition small garage/big shed for $43k. The location of my property is in a nice town on the ocean and the cleared part of the lot with the trailer is way off the road, so I paid a bit more than you because I really liked the location.

I paid cash. I had some saved up and sold off 3 of my 4 cars.

It's worked out rather well. I've been living in the trailer for 2.5 years now. It's nothing fancy but it's fine for now. With no mortgage it's very easy to save money. I'm getting a new truck this month, paying cash that I saved up since I've been here. I just started on a nice new garage last week, don't need to finance that either. Next up will be saving up to build a house on the lot, then sell off the trailer.

I guess my point is, if you want to go for it, try to get enough cash together to buy outright and move in. It won't be perfect at first, but with no rent or mortgage, you'll have money to fix it up as you go along. Don't get yourself into a hole where all your income goes into debt service.

If it's listed at $35k, try to get $25k together, sell some cars or stuff you don't need. Make an offer in the low 20's and hopefully settle at $25k or so. Worst case maybe get a small loan from a local bank or credit union for whatever you can't come up with.

I think it would be a huge mistake to try and borrow $80k for this.

 

[79firebird]

Some times bank foreclosures can take a long time to get the final paper work and beable to move in. My uncle has bought a fue and can take any wheres from 2 weeks to 8 months to get the final paper work even after they have the money do to all the paper work n such. Could it work out and its worth it yes. can you lose it all yup. Keep in mind the feild is speced for trailer add more need a new bigger feild. Only pay for the value of the land and thats it

 

[dw1]

If the pet stains have penetrated the subfloor it will be next to impossible to get the smell out.

In the long run, I would scrap the place and buy a new double wide.

I have several rental houses, and yes, all that I have bought are foreclosures. I had one that stunk real bad from pet urine, after I closed on it, I ripped all the carpet, you could see the stains all around the hardwood flooring, I spent over $500 on chemicals to remove the smell, and even though the chemicals I bought did help, you could still smell it. My buddy stopped by one day, I showed him what I had, his reply was "You will never get rid of that smell" you have to seal it in. I bought 5 gallons of polyurethane, sealed all the floors several times, I have had this house for over 7 years, no smell ever came back. Foreclosures can be good, a little hard work and you can have some quick equity. I have some I financed and some that I have not. Good Luck
The last one I bought I was trying to convince the bank the house was worthless, but its on a 1.5 acre lot about a mile from my house I live in, they finally agreed, they dropped the price $25K. I agreed to use the lawyer that foreclosed on the property as the closing attorney, it took 13 days to close on the deal.

 

[dw1]

In KY for a bank to sell foreclosed property, it has to be free and clear of all leins ect The house I mentioned above had $11,700 of leins against it, the bank paid them off. Check to see what PA laws are? even if you dont get this one, you will learn a little for the next time around.

 

[Ribbedroof]

Be aware that in order to move a manufactured (mobile) home, the license plate (tag) has to be current. Almost NO ONE keeps the tag up to date.

We bought a 3 acre parcel from (extended) family in 2013...trailer last tagged in 2003. Luckily, the tornado removed the majority of the unit from the land, so that worked out kind of nicely for us since none of the people that were willing to take the trailer were willing to pay the back tags on it to have it moved.

I did laugh when one fool claimed he could just pull it with his dually. 12x60 tri-axle.

 

[iminocca]

There has been a lot of sound advice offered here, and on the surface it sounds like this a worth a closer look and more research. It basically comes down to this: what is a comparable property in move-in condition selling for and how much money will it take to make this property move-in ready, period. If the cost of the property + improvements is less than a move in ready home then it's worth considering.

I assume the mobile/manufactured home is on a permanent foundation...If you just need to replace flooring and seal the sub-floor (I've used polyurethane also and it works great for sealing odors, I thinned it 50% for better penetration), and I can assume it needs paint, maybe some light fixtures, at worst case a kitchen, if you can do a portion of it yourself you could spend as little as $15 -20k (including kitchen) and probably not have to do all the work at once. In my state you purchase title insurance when you buy a property that insures there are no liens on the property, probably in your state too, it's not that expensive.

Along with the land you're getting electrical service, water service, septic system (usable with the existing MH), a slab for a future garage, and a place to live...although it may be marginal right now. What's all that worth in your area?

Lastly, for this type of property, pay cash! Take you time with the improvements if you need to. You can easily borrow yourself into trouble on something like this, someone already did once....

 

[Jjbates]

Research is the key. Find EVERYTHING wrong with the place before you make an offer and don't become emotionally attached. Be prepared to wait. I got a great deal on a brick ranch on 2 acres with a full walkout basement AND a 24x32 detached garage for $21000. But it took 6 months of back and forth.

 

[bczygan]

Buying real estate takes savvy.

Get a bunch more before you jump.

 

[T_R]

Be aware that in order to move a manufactured (mobile) home, the license plate (tag) has to be current. Almost NO ONE keeps the tag up to date.

We bought a 3 acre parcel from (extended) family in 2013...trailer last tagged in 2003. Luckily, the tornado removed the majority of the unit from the land, so that worked out kind of nicely for us since none of the people that were willing to take the trailer were willing to pay the back tags on it to have it moved.

I did laugh when one fool claimed he could just pull it with his dually. 12x60 tri-axle.

The license plate on a mobile home is a state thing. Some have them, most don't. Most states the transporter provides a plate to move it with.

You could move a 12x60 mobile home with a 1 ton dually short distances. It's not legal in most states and won't stop or handle very well. But it's been done. I wouldn't try it on anything but mostly flat slow speed back roads.

 

[Hobbit]

Make sure each section has a data plate, a paper label affixed usually on the inside of a kitchen counter door or the laundry somewhere by the manufacturer. Also, the HUD certification tags on the outside of each section. If any of these have been removed then the odds of getting a loan are poor.

 

[reader2580]

Where I live if a foreclosed house is listed on MLS that means the bank has cleared up all legal issues with the house and the house is ready for possession by a new owner. I bought a foreclosed house last year and was able to close on it in about 30 days. No issues at all. The bank had even had the well and septic tested.

Short sales are a different story. It usually takes a minimum of 90 days to get the bank to approve a short sale. A short sale that sold before I could look at it took a good 4 or 5 months to get bank approval. (Decent house with a REALLY nice 40x80 shop/garage.)

 

[SALIV8]

Lots of good but also misinformation in here.

I was in the same situation as you, OP, a few years ago. I bought a manufactured home that was manufactured in 2000 on 5 beautiful acres in s/w Michigan. Mine is real property and would have been easy to get a loan for at the time. I purchased with cash, however. It sold for more than yours did about 7 years ago.

Mine is on a permanent foundation and crawl space has a slab under it. Find out if yours is real property. That's a legitimate term. Easy to insure, and have had very little problems with it, all of which I was able to fix. My wife and I love it. It has 2x6 exterior walls and is fully insulated.

In three years, based on recent comps in our rural area, it has more than doubled its worth already. Get a lawyer involved, find out about mineral rights, get the septic and well tested, also a home inspection if you want, and have a land survey done if it is indeed real property (these can be included in your offer). Reo properties will accept about 7-10% less than asking price typically.

There's a lot of hate for doublewides and trailers but they've come a long way. I own a large multi family brick building in a very nice area of Chicago and like the cabin better. Lol.

 

[justanengineer]

Its a home, treat it as one during the buying process and forget the "trailer vs manufactured home" bs. I live within spitting distance of National Homes' former headquarters and in our area there are plenty of manufactured homes around with trailer axles still installed and trailers with them removed. Both come in cheap AND expensive, look at the construction and pay accordingly. JMO, but having worked on quite a few I'd be curious to see any roof framing bc theres a big difference if the roof has real trusses/structure vs hinged halfs bolted together and other funny "mobile" roofs. Pet stains arent any huge deal, seal it in and youll be fine, theyre the reason the hardwood in my house are so dark. As for the septic and electrical, treat them like you would any other purchase and not a given, working in good condition. My house was a foreclosure repossession, former owners literally poured concrete down the sink then cleaned the visible surfaces well, luckily it didnt make it far enough to do significant damage, you quite literally never know whats wrong with a particular system. Evaluate everything, be suspicious, and if it looks sketchy ***-u-me it needs replaced and price accordingly.

As others have said, if you can pull together the cash it gives you a ton of power over the owning bank to ask for a quick sale, reduced price, etc bc theyll likely just want it off their books, theyre not making any huge amount selling it.

 

[blackdart66]

Where I live if a foreclosed house is listed on MLS that means the bank has cleared up all legal issues with the house and the house is ready for possession by a new owner. I bought a foreclosed house last year and was able to close on it in about 30 days. No issues at all. The bank had even had the well and septic tested.

Short sales are a different story. It usually takes a minimum of 90 days to get the bank to approve a short sale. A short sale that sold before I could look at it took a good 4 or 5 months to get bank approval. (Decent house with a REALLY nice 40x80 shop/garage.)

The above statement was true on the 2 foreclosures I have bought in 2 different states. Indiana and West Virginia. By the time they hit MLS they were ready to go. The 2 banks I dealt with had specialist that prepared the properties for sale and made sure everything was in order.

I would agree with what someone posted above after looking for and buying 2 of them. If it was a screaming deal. The average person does not even get a shot at them. Those properties are cherry picked by people connected to the system and flipped. That takes cash. No financing.

Interestingly, my financing contract on my last one had a clause that I had to live in the house for 1 year before I could sell it. That bank had no interest in financing flippers.

 

[jbailly]

We are still looking around and thinking about it. It is a manufactured home with a steel frame underneath. It has no crawl space or basement, just setting on concrete block piers. If we don't find a house that is move in ready that we like for a comparable finished price, I'll plan on making an offer as a bare lot probably 20k at the most and see what they say.