in a manufactured home that you would find in a tract or luxury home.
from the land. If the owner wants to make it real property (combining the land and the home), it’s a simple process that a title company or attorney handles. This makes it real estate with the same classification as a single-family home. Investors like our model because the homes are a third to half the cost, and the rents and returns are proportionately much higher. In addition, maintenance costs are much lower. We don’t have the foundation and plumbing issues single-family homes have. Here in the Dallas/ Fort Worth area, I hear horror stories of foundation repair running $30,000 to $50,000. Manufactured homes are tied into concrete runners. If we must relevel the house, we just take the skirting off, and it costs $1,000 to $1,500. MOBILEVS. MANUFACTURED HOMES Some people wonder about the difference between mobile and manufactured homes. They mean the exact same thing. Back in the 1970s and 1980s, they were called mobile homes. In the early 1990s, the industry started calling them manufactured homes. I guess that term sounds better, but there were also some great changes made to the homes at that time. Before 1990, a lot of the manufacturing plants used particle board floors, which were substandard. When the floors got wet, they would get soft. Over time, they had to be replaced. If they were not replaced, you would run the risk of falling through the floor. Around 1990, almost all manufactured home plants began using plywood and OSB flooring, the same flooring used in tract homes and luxury homes. Today, you can find virtually every amenity
PRIVATE PROPERTY MANUFACTURED HOMES Private property manufactured homes can be a very good invest- ment in a mobile home park or on land an investor controls. As I said, I did own and operate a mobile home park years ago. This is where “affordable” starts. The typical tenant is usually living paycheck to paycheck and struggles to make ends meet. Its tougher to property manage these, and that’s why I chose not to remain in this area of mobile home investing. There are, however, six or seven big players in this space who really do have it dialed in, and they do a tremendous job. These are usually in a fund, or a syndication—and the returns can be very good! I prefer my manufactured home model because we get a better tenant, because we provide a bigger home and more land, and they are usually located in better school districts. Do manufactured home appreciate or depreciate? The answer is both. Personal property mobile homes usually depreciate just like a car. (In today’s crazy times, things seem to be a little different.) Real property homes, because they have the land included, abso- lutely appreciate. Case in point: For the properties we bought between 2012 to 2014, our typical all-in cost (acquisition plus rehab) was around $60,000. Today, those properties sell for around $200,000. That’s a tremendous amount of appreciation that grows tax deferred—you don’t pay taxes until you sell. That’s why I believe buying and holding real estate is the best wealth-building strategy available. Also, the rents
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