Out with the old, in with the new.

[Matt]

First off I want to thank you guys for answering the questions in these forums. I think the information is very valuable.

Now I have a question that I hope can be answered. We (myy wife and I) own a 1976 Homett Manufactured home and a 1.25 acre lot. It is located in a really nice neighborhood. My wife and I decided to sell the home and move into town and purchase a new house. When we put the place up for sale, we had 12 people interested in bying it in the first three days on the market. We were asking $90,500
The mobile home is a single bedroom and we built a 1000+ sq foot addition onto the trailer. Thus we found the problem. All the people that tryed to get loans for this was told the banks would not finance a May 20th 1976 Pre-hud trailer. Only a couple of places will give loans out for it. And they are very high interest rates and really strict on the credit requirements.

A bank finally contacted us and we asked them what we should do or what we could do. They told us that their bank will loan us the money to put towards a new manufactured home. But in order to do this, we needed to jump through a lot of hoops.

We owe $43,800 on our current trailer. We would have to get a loan against the value of the land in order to get out from under that trailer. The additional value of the land would be the down payment towards the new Manufactured home.

The assessed value on the place including the addition and the 1976 trailer is $90,000. I do know the assessed value on land alone with no upgrades is $32,000. I have no idea what the assessed value of a brand new addtion (just closed permit three weeks ago) It has 3 bedrooms, 1 bathroom and a family room. No idea what will happen to the value removing the 1976 trailer is. According to the manufactured home dealers, the 1976 trailer is worth nothing at all. But when it sits on land it is worth something? Any idea what it could possible be worth on land when it is worth nothing the moment it is pulled off land?

My wife is looking at a new Marlette for $77,000 not including the costs to but it up to the addition and tie it in and foundation work etc... If we went this way the total costs would be around $140,000. I am guessing (including the $43,000 loan refinance). Any idea what this will do for the value of the property? Will the land and manufactured home only be worth $140,000 after doing this?

I know the current manufactured home and land, addition combo is assessed at $90,000.

Sorry but I really would like to know if this sounds like a smart thing to do #1 and #2 if the newer value would mean less equity for us in the long run.

BTW the current $43,000 loan is a personal loan that is 14% interest.
We could probable get a new loan to cover the new Manufactured home for 6.5% interest.

[rmurray]

Whew....way too much to analyze here...

It is hard to finance a pre HUD home...but it is just as hard to finance a new home with a non HUD addition......No one here can tell you if this package will be worth $140 K...I can only say there are few areas where a pre HUD single section with land would be worth 90K..so maybe it would be OK..

You seem to have forgotten 1 important option...You could sell the home and hold the mortgage yourself...Sounds like you are in a desirable area..lots of potential buyers..check their credit...ask for as much down as the market will bear...finance at about 7%...structure the deal correctly and legally by involving a good real estate attorney..Then sometimes it is possible to sell the note..or borrow off of it for cash flow to you..If you could find someone with decent credit and $10 to $20 K down..this could be a great investment for you..

[matt]

Thank you for your response. My wife was told by a Manufactured home dealer that our lot is more then worth doing that. But I have been afraid of the potential resale issue.

What makes an addition a HUD addition? Can one become HUD approved? It was built like a stick built house. Concrete foundation etc.....