Cheapest new homes?

I recall some cheap new home programs a while back, but lately I have only heard about legacy homes.

Where can we get the cheapest new homes? What is the price range on a 2 and 3 bedroom? Did fleetwood have a program for park owners?

Fleetwood and Tru probably have the cheapest new homes – but it’s not by much. However, they do not have any financing programs, so you’ll have to buy those homes for all cash. We prefer buying two or three Legacy homes with the same amount of cash, so we get double or triple the results as far as boosting occupancy and future net income. Until somebody comes up with a competitive program, Legacy is the only way to go.

21st Mortgage told me today that they will finance 100% of purchase price (for Clayton homes only) on a 7.99% 10-year note.

I don’t know more of the details yet – does anyone know more about this? Any gotchas?


I recently priced out several smaller homes (56’-60’ length) in the Ohio market and found Tru homes priced far lower than the other options.

There was about a $5,000 price difference between the Legacy and the Tru homes I got quotes for. If I formulated that price difference as added points on the Legacy loan, it raised the effective interest rate on the loan from 8% to 14%. A 14% interest rate isn’t necessarily bad when the collateral is a highly depreciating asset, but for my situation it wasn’t the right fit.

Granted I’m sure every market and each sized home is a little different, and I don’t know how the quality of the home varies between the different manufacturers.

I think that’s the CASH by Clayton program, which is not at all similar to the Legacy program. You better read all of the terms. While it can work in some markets, it has some extremely tough criteria to meet. It’s not going to work in your average park, that’s for sure. It’s a specialty product.

Lotta Gotchas

Read the fine print

Frank, what is the legacy program. we are currently looking into the C.A.S.H. program from clayton but there seems to be nothing easy about it.

Just contact Mark Ledet at Legacy - He recently gave me some details on it.

Mark Ledet at Legacy at (786) 785- 982.



Legacy’s program is roughly 1/3 down, 2/3rds financed over 10 years at a floating rate between 8% - 12%. It is for the total purchase price of the home (e.g. including appliances, central heat/air, and delivery/set).

I call it the ‘10/10/10 program.’ ($10k down / 10 years / 10%).

So far, it is the only thing like it in the market.


I spoke to a park owner who purchased TRU homes for his park and he said the reason they are so cheap is the quality is sub standard. He said they look nice new but was very worried about what the condition the homes will be in 5 years after your average tenant beats em up. Sounds like you get what you pay for.

We also looked at the CASH program and just to get approved for the program was going to take a ton of work.

Good to know Steven, I was getting ready to order a Tru home soon. Has anyone else ever ordered a Tru home, and know how the quality is compared to other manufacturers?

I saw one at the Louisville show last year and yes it is noticeably lower in quality.

The main problem I am having is not just the financing but the overall business model requires I give up almost all of my lot rent to make the loan payment on the home.

Example (Ohio):

Legacy 16 x80 : $31665

Freight: IN to OH: $1600

OH sales tax: $2100

Set up: $2000

Skirting & steps $1300

Central AC: $2000

Total Cost: $40665

Debt service: $493/mo (8% over 10 years) - Assumes I get my down payment $ at the same rate

Taxes and Insurance $100/mo

Our market will only bear about $700/mo and lot rent is $291, so I am only clearing $107 per month on that lot (assuming no repairs on the home). Are you all okay with this model? Seems like no matter how you slice you are still investing $40K to fill one lot.

Are these the same numbers you guys are using?

Also, are you finding you can charge more than market rate for a new home or is it still sort of like people have a max they can pay - be it used or new.



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We purchased two Legacy 4BR/2BA 16x80 smart panel / shingle homes last year to experiment and see how much additional rent they’d fetch, and if/what higher-quality resident they’d attract vs. our ‘regular’ 4BR/2BA homes which are 1997 16x80 metal/metals. We ‘only’ get an additional $150/month for them ($875 vs. $725). The tenants seem somewhat more responsible, but we won’t really know until they move-out.

We don’t feel the additional investment was worth it. In our market (Oklahoma) we can purchase/move/rehab those used homes for around $20,000 all-in. Obviously we were spending nearly 2x that on new homes, and ‘only’ getting 21% more rent ($150/$725) for 100% more investment.

That said, the park does look better with new homes, and might be somewhat more re-financeable and/or more attractive to prospective residents. So there are some ‘soft’ unquantifiable benefits from sprucing up your park with new homes.

Note: none of this reflects negatively on Legacy’s homes. They are fine homes. Any brand-new home we might have brought in would have performed similarly, and we never really expected to get 100% more rent for a new home (but indeed we did perhaps expect a much larger down payment and/or better-quality resident - but neither materialized).

Second note: your mileage may vary. The market on the edge of Oklahoma City may not appreciate new MHs as well as much as a more centrally-located MHP in/near Chicago, or Austin, or … your market. But I think you would do best to only bring new MHs onto lots where the market rent is in the upper $300s/month or above (ours are $235/mo.).

My 2 cents worth,


I wonder how much it would cost to gut a junker down to the studs, inside and out and rebuild it so it is all shiny and new. Since you will not be moving the home, you could use drywall and exterior siding like on a normal house. And you could improve the window situation instead of the crappy little windows that so many of the older homes seem to have and get rid of those ugly tilted fronts that really date a home.

It seems like you could do that for a lot less than $40 grand.

You’ll have to charge $795 per month. If the market won’t bear that, then you’ll have to charge $695 and eat $100 per month of your lot rent. The whole goal is filling lots for eventual re-sale or re-finance of the park. If you do nothing, the lot will be 100% vacant. So if you even had to use the entire lot rent component for 10 years, you’re still ahead in the end – just not getting anywhere with lot income until the end of the movie. In this park, if the demand is not there for $695 and $795 homes, then you may not want to put new homes in it, and drop back to repos, which might save you $5,000 to $10,000 in purchase price. We do find that people will pay a premium for new homes. But every market is different.

If we could bring in a home and only get $495 per month for it – under your scenario – we’d do it since we get the value of the occupied lot once the home is paid off. The worst scenario is doing nothing and hoping the lot will magically fill (it won’t). The lot rent is really an “opportunity cost” (based on my old college economics degree) so it’s not costing you out of pocket (probably the cost of mowing and fixing the vacant lot is about the same as any implied costs of an occupied lot, assuming the tenant pays their own utilities).

Just to clarify: I agree doing nothing is not an option - our annual goal - in big crayon on the wall is: We WILL fill 10 -12 lots per property per year. Just a matter of new or used. Right now our all in for used is about $23K -so that is a $17K difference.

I’m a little hesitant to commit to the Legacy requirement of 6 homes, so assuming I have my own cash to buy homes which ones do you guys think give the most bang for the buck in the Ohio area - I’m looking at Adventure, MHE, Redman, Skyline. BTW it seems like some of them are trying to copy Legacy with some sort of financing for rental homes , but I’m seeing that the program through 21st has an 11% fee tacked on. Wow. Does Legacy charge loan fees or points?


Legacy, to my knowledge, does not charge any loan fees or points. If you have the ability to buy homes for cash, then I’d definitely look at the options. I’m unaware of any other program that matches Legacy on the financing. Since the cost of delivery, set-up, etc. should be the same, then all that really matters is the comparison of the new home cost from the manufacturer. I’m curious to see what your results are, if you’re willing to share them with everyone. To my thinking, the winner would have to be hugely under Legacy at $30,000 to make it worthwhile not using their Park Finance Program.

I will be at the Louisville MH Show Jan 22-23 looking at new homes. Frank - are you going to be there?


Yes, I just saw you there. Sorry, but I’ve been on the road looking at parks for 4 days. I will have a complete review of the show for those who didn’t go, in the newsletter on February 1st.

Frank - nice to see you at the show. I am compiling my data on the homes. I am tempted to go with the cheapest home and take my lumps when it is time to do the repairs. I think one of the biggest gains for me with going from used to a steady supply of new homes is now you have a source for parts from the factory rather than getting everything at Lowes for the used homes.

Some of the options to think about for rentals:

  1. Full 1/2" drywall or stick with the VOG panels (The upgrade is about $1200 for a 16 x80)? I heard Sun Communities is ordering them with full drywall.

  2. Fiberglass one piece tubs or plastic with the wall surround

  3. Vinyl flooring throughout or some carpet some vinyl?

  4. Windows - I found only one home (Tru MH) that still sells the metal windows with self storing storms. That might be a deal killer - the vinyl thermal panes are the way to go.

  5. Ceiling height. Tru MH is 7 ft in the bedrooms - feels really cramped. You can go vaulted in the living rooms as an option. Adventure is 7 ft 6" flat throughout (I think you can upgrade to vaulted). All the others (Hart, Skyline, Redman, MHE) are 8 ft flat.

  6. Kitchen cabinets - Adventure (maybe others too) have an option for a wood door and frame - this might really help when doing repairs as the hinge screws can easily come out of the cheaper MDF material.

  7. Sinks - china or plastic?

  8. Doors and trim - some flat trim, some with profile, MHE has full mortised hinges.

There are probably more issues - these are just a few.


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