4 ms·

I like this, although one thing that I've recently learned is that Silicon Valley has a number of large trailer parks, and you can often purchase a home in one

I like this, although one thing that I've recently learned is that Silicon Valley has a number of large trailer parks, and you can often purchase a home in one of them for about $70-90K. Many of the trailers are actually quite retro cool. I believe Tony Hsieh still lives in a trailer, in Vegas. http://www.zillow.com/homedetails/191-E-El-Camino-Real-SPC-284-Mountain-View-CA-94040/2097442737_zpid/ http://www.zillow.com/homedetails/191-E-El-Camino-Real-SPC-2... http://www.zillow.com/homedetails/2150-Almaden-Rd-SPC-125-San-Jose-CA-95125/2097418932_zpid/ http://www.zillow.com/homedetails/2150-Almaden-Rd-SPC-125-Sa...

ZanyProgrammer 10y ago
Which is nice right up until the trailer park gets sold for condos.
Someone1234 10y ago
I feel obliged to point something important out about trailer park homes (and other temporary dwellings)... They're a financial trap. So MOST people buy a home with finance, it might be a bank, credit union, or whatever but ultimately these loans are backed by larger organisations in the background that set the rules. One thing you may not be aware of is that once a trailer park home is 15+ years old a LOT of companies won't loan against it. Even for a new dwelling of that type it can be hard to get finance, but as they grow older loan providers vanish. There's a whole host of reasons for this (e.g. the type of people that live there are "high risk," the home can literally be stolen, there's less standardisation for home inspection, the land is low value since it is often in the middle of a trailer park (i.e. has no general purpose value)). I call this a "trap" because you'll buy the trailer park home, then at some stage in the future you'll want to resell it; when that occurs you may suddenly find that while there are a lot of interested buyers none of them can get finance(!) to buy your home. This has nothing to do with a buyer's credit score by the way. It is the property itself that won't be loaned against (since when you mortgage the property itself is normally collateral in case you don't pay, in this case they cannot determine that the property is worth as much as the loan you're asking for). I know someone who's been trying to sell their trailer park home for a year. Lot's of interested buyers, all with good jobs and solid credit scores, but none of them can get finance because the property is too old, and none have the cash. They're tried dozens of financial institutions.
- lazyant 10y ago
  > the land is low value from what I understand mobile home owners don't own the land their houses are on, they are on a lease
- effinggames 10y ago
  Could they offer seller financing?
  - presidentender 10y ago
    I knew a seller - a veterinarian in Missoula, MT - who purchased a trailer, then sold it on owner financing, and repeated the process many times as his buyers defaulted. Even at the lowest income bracket, there are buyers who can put together 10% down on a $12,000 house - even some who can put together 20%. If you owner finance such a sale, and charge interest rates that make the monthly mortgage competitive with rent elsewhere, you can do very well for yourself.
    - toomuchtodo 10y ago
      Dodd-Frank significantly curtails this sort of predatory behavior. https://www.ortconline.com/Web2/Downloads/English/CFPB%20and%20Seller%20Financing.pdf https://www.ortconline.com/Web2/Downloads/English/CFPB%20and...
  - Someone1234 10y ago
    Absolutely. But then the seller has their money tied into the property for potentially years and you're now in business with this complete stranger (e.g. if they stop payments you're responsible for chasing that down, if the property burns down they may just run off into the sunset, etc). Unfortunately some people are forced into that arrangement simply because otherwise they'll never be able to offload it. It is something to keep in mind when getting into these types of property. PS - Keep in mind that if you receive cash for this property you could use it as a downpayment on another, without getting all of the cash up-front you'll have to take out a bigger mortgage against your next property which will cost you money in interest over the life of the loan. So even ignoring the administrative hassle of seller financing, you're now also out of pocket.
infecto 10y ago
Hmmm that purchase price does not cover the monthly free from the trailer park company. I am guessing its going to be close to market rate for the land value.

ZanyProgrammer 10y ago

Which is nice right up until the trailer park gets sold for condos.

Someone1234 10y ago

I feel obliged to point something important out about trailer park homes (and other temporary dwellings)... They're a financial trap. So MOST people buy a home with finance, it might be a bank, credit union, or whatever but ultimately these loans are backed by larger organisations in the background that set the rules. One thing you may not be aware of is that once a trailer park home is 15+ years old a LOT of companies won't loan against it. Even for a new dwelling of that type it can be hard to get finance, but as they grow older loan providers vanish. There's a whole host of reasons for this (e.g. the type of people that live there are "high risk," the home can literally be stolen, there's less standardisation for home inspection, the land is low value since it is often in the middle of a trailer park (i.e. has no general purpose value)). I call this a "trap" because you'll buy the trailer park home, then at some stage in the future you'll want to resell it; when that occurs you may suddenly find that while there are a lot of interested buyers none of them can get finance(!) to buy your home. This has nothing to do with a buyer's credit score by the way. It is the property itself that won't be loaned against (since when you mortgage the property itself is normally collateral in case you don't pay, in this case they cannot determine that the property is worth as much as the loan you're asking for). I know someone who's been trying to sell their trailer park home for a year. Lot's of interested buyers, all with good jobs and solid credit scores, but none of them can get finance because the property is too old, and none have the cash. They're tried dozens of financial institutions.

lazyant 10y ago
> the land is low value from what I understand mobile home owners don't own the land their houses are on, they are on a lease
effinggames 10y ago
Could they offer seller financing?
- presidentender 10y ago
  I knew a seller - a veterinarian in Missoula, MT - who purchased a trailer, then sold it on owner financing, and repeated the process many times as his buyers defaulted. Even at the lowest income bracket, there are buyers who can put together 10% down on a $12,000 house - even some who can put together 20%. If you owner finance such a sale, and charge interest rates that make the monthly mortgage competitive with rent elsewhere, you can do very well for yourself.
  - toomuchtodo 10y ago
    Dodd-Frank significantly curtails this sort of predatory behavior. https://www.ortconline.com/Web2/Downloads/English/CFPB%20and%20Seller%20Financing.pdf https://www.ortconline.com/Web2/Downloads/English/CFPB%20and...
- Someone1234 10y ago
  Absolutely. But then the seller has their money tied into the property for potentially years and you're now in business with this complete stranger (e.g. if they stop payments you're responsible for chasing that down, if the property burns down they may just run off into the sunset, etc). Unfortunately some people are forced into that arrangement simply because otherwise they'll never be able to offload it. It is something to keep in mind when getting into these types of property. PS - Keep in mind that if you receive cash for this property you could use it as a downpayment on another, without getting all of the cash up-front you'll have to take out a bigger mortgage against your next property which will cost you money in interest over the life of the loan. So even ignoring the administrative hassle of seller financing, you're now also out of pocket.

infecto 10y ago

Hmmm that purchase price does not cover the monthly free from the trailer park company. I am guessing its going to be close to market rate for the land value.