You Might Want A Mobile Home

Why Look At Mobile Homes For Sale?

There are mobile homes for sale, for much less than stick-built houses, in most areas of the country. Despite the persistent predjudice against them, and sometimes against their residents, mobile homes are the cheap housing choice of millions. The advantages are not always obvious, but they are real.

First of all, let's acknowledge the big "truth" about mobile homes and appreciation or depreciation. It is true in most areas that mobile homes in parks go down in value over time. That's why I don't recommend buying in a park, unless you absolutely can't buy real estate, and you have done the math to see if you are better off than renting a nice apartment. To "do the math" consider lot rent, payment, and the remaining value of the mobile when you put it up for sale, minus what you will still owe, when you are likely to move. These are guesses, but still better than nothing if you are as objective as you can be.

Mobile Homes For Sale With Real Estate

When looking at mobile homes for sale on land, however, you are looking at an entirely different investment. My mobile home in Michigan doubled in value in the twelve years I lived in it. That's because even as the home deteriorated a little over time (don't all houses?), the value of the land continued to rise. You also can do what you like with the home when you own the land. For example, I took in more money from my home than it originally cost, by renting out a room or two over the years.

As mentioned, mobile homes usually sell for much less than other houses, and this means not lower payments. Also, because of the shortened amortization and lower loan amount, you will often build equity faster in a mobile home than in a more expensive house. A quick example follows, for the skeptical among you.

Equity Building With Mobile Homes

If you buy a house with a $100,000 mortgage loan amortised over 30 years at 6% interest, you'll have a payment of $599.60. Of the first payment, $500 will go towards interest, $99.60 towards principal. In other words, you only built equity of $99.60 (I'm ignoring appreciation, but only for the moment).

Second scenario: Find a nice mobile home for sale, and borrow only $30,000, at 8% interest, amortised over 10 years. Note the higher interest - this is always the case with "factory built home mortgages." The shorter term is normal too, but least you'll own your home free-and-clear in 10 years instead of 30. Despite the higher interest and shorter term, the payment will be only $363.99, the first month only $200 will go towards interest. That means the other $163.99 goes towards principal. You bought more house (built more equity) in this scenario.

It's true that a mobile home on land might appreciate more slowly than a "regular" house, but the faster loan pay-down probably more than covers this factor. If you also chose to bank the difference in payments ($235.61 per month), you'd definitely be better off financially with the mobile home versus the more expensive home.

Pay less per month and build more equity! Don't expect your real estate agent to tell you this. Don't expect him to even agree with me after you explain it. I sold real estate years ago, and math skills were not part of the licensing requirements.

Mobile Homes For Sale; Other Advantages

Mobile homes are cheaper to maintain. Years ago I had a mobile home as a rental, and the furnace in it died. This is the most expensive repair you'll have in a mobile. I had to replace it for $1,200, but that was still less than a furnace for a larger home. Consider that for $200 you can tar the roof of your home, or $30 if you do it yourself, instead of $5,000 to re-shingle a traditional roof. The windows, plumbing, doors - all cheaper.

Property taxes will cost less, because they're based on the value of the property, and mobile homes for sale on land have lower value than stick-built houses. Insurance may cost less too, again because you are insuring less value. The only precaution to remember here is to be sure you can get insurance. Very old mobiles may be uninsurable in some areas.

Should You Buy A Mobile Home?

Don't buy a mobile home if prices for houses in the area are just as low. Believe it or not, this is the case in some areas. We bought a house near Butte, Montana for $17,500 - less than mobile homes for sale there. You can see a photo on our site http://www.HousesUnderFiftyThousand.com. Houses do generally hold up better. Then there are the issues of whether your own needs and predjudices will let you be comfortable in a mobile home. They are sometimes for sale in areas you don't want to live in (Certainly true of houses as well). These are personal things you have to consider.

The advantages are clear for many young people starting out. It may be their only option. It may be your better option. Besides a lower initial price, you get simpler, cheaper maintainance, lower monthly payments, less property tax, less for insurance, and faster equity build-up. So don't automatically pass on those mobile homes for sale when you're out home-hunting.

Buying your First Home

can be exciting but there is a lot to know. Buying a home will depend on real estate laws and customs where you are located but there are basic steps that every first homebuyer needs to accomplish.


Step 1- Your Finances


Establishing credit is very important especially when you are looking to purchase a large investment like a house. Your credit reports reflects how you manage your finances. Study your credit report and your financial history so you are familiar with it before applying for a mortgage. These reports will be needed for the mortgage approval process in finding out the interest rate and other loan terms.


Step 2- Familiarize Yourself with the Mortgage Industry


Do your research. Finding the right loan and lender is extremely important to your home buying success.
Choose the lender that is best for your needs but be sure to understand the loan process as much as you can before talking to a lender so you don’t feel completely lost.

Step 3- get Pre-Approved for a Mortgage


Once you talk with a lender, you should be given an estimate of how much you can afford for a house.
Being pre approved can help you in a variety of ways. So if a home seller gets two offers, one being yours with a pre approved letter from your bank saying you have been approved for the amount offered, and then there is the other person with no letter, your chances of getting the house are much better.

Step 4- Determine what you Want and what you need


Buying a home isn’t as challenging as most think. If you familiarize yourself with the real estate market and narrow down what you want and need before buying house the process will run a lot smoother.
Be sure to understand agent duties and devotion because some real estate agents represent buyers, sellers, or both or depending on the state they can work as neutral facilitators for either party.


Step 6- Start Searching for your New Home


Your agent will most likely give you multiple listing sheets to review. You might have also picked up a real estate magazine in your area and found a house through that, shop online, or find ads in the newspaper. Other ideas can be driving around the neighborhoods that have houses for sale. Either way you look, consider these home buying search tools in your search.


Home Buying Search Tools


1. Consider houses that others may overlook
2. Get out there to see what’s out there
3. Look into public versions of multiple listing service web sites
4. Search for real estate agent web sites
5. Browse real estate search engines and networks
6. Find for sale by owner properties
7. Look at magazine and newspapers in print
8. Find foreclosed homes


Step 7- Handle Pre-Offer Tasks


When looking at houses be sure to look at its structure and features which can help determine if its something you want or not.


Step 8- put in an Offer


There's no one specific set of instructions that cover all the differences in real estate laws and customs that exist throughout the United States, so when putting in an offer on a house, it will depend on your location.


Step 9- House Inspections and Other Tests


Some states allow home inspections before the final contract is signed where as in other states inspections take place after the contract is signed. No matter when you have to do them, it's very important to decide which inspections and tests you want done.
Discuss with your real estate agent or if you don’t have one, then an advisor to find out when inspections should happen and if additional types of testing are needed for a specific area.


Step 10- Avoid having to Correct Last Minute Problems


As the closing date approaches, everyone involved in your real estate transaction should be checking the progress on a daily basis. That way if a problem arises it can be taken care of right away.
Step 11- Closing
Closing, also called settlement, is the event that transfers ownership of the property from the last owner to you.

A Real Estate Formula

It was a simple real estate formula. The ads ran in our small-town newspaper for years before I realized exactly what was going on. They were always the same: A house for sale with 5% down and payments of 1% of the purchase price. Maybe a three bedroom home for $90,000, for example, with $4,500 down and $900 per month payments.

When a friend started doing the same thing he explained the process to me. It was a way to get a great return on capital, and it was the opposite of buying with no money down. There is no down payment at all when you buy, because you buy for cash.

The Simple Real Estate Formula

You probably know that when you buy for cash, you can often get a much better price. With no financing contingencies in the offer, and the promise of a faster closing, sellers are willing to sell for less. You can offer $95,000, for example, on a house that might be worth $108,000. If you can't get it for less than, say, $99,000, you walk away - there are always other opportunities.

Once you buy the house, you put few thousand into high-return repairs and improvements. These might include paint, carpet, and maybe asphalt for a dirt driveway. For our example, we'll say you spend $5,000. Let's suppose the house is worth $116,000 now. You're ready for the next important step in this real estate formula.

You put it up for sale, targeting buyers who can't get financing easily. You provide the financing. Because you are making it easy for the buyer, you can get more than the $116,000 value for the home - and do it without paying a realtor's commission. Let's say you sell it for 123,000. The buyer needs a down payment of just 5%, or $6,150, and makes monthly payments of $1230 per month. You charge higher interest than the going rates at the banks, of course.

This is a win-win situation. Your buyer is able to buy a home instead of renting, and you get a capital gain of perhaps $16,000 after expenses, plus good interest. Your total rate of return will often be over 20%!

In our town, the first to do this consistently were a father and son team of lawyers. They saved money by doing their own foreclosures when necessary. Once they foreclosed, they raised the price and sold the home all over again.

They made millions. Did you know that if you can get an average return of 18% on your money, you'll turn $75,000 into more than one million dollars in about fifteen years? That's the power of a good real estate formula.