And just a note of caution. If you have children you should check out the EPA’s web site in regards to lead poisoning. Lead is not costly to address in a rehab and even minute amounts can cause permanent mild to severe learning disabilities in children under 6.

the only way to live in a house under construction without going completely crazy is to buy one with a dry, well constructed basement that has at least a little ambient heat coming from the furnace. you will move your appliances down there. be prepared to buy a lot of visquine (it comes in long rolls)–rather thicker plastic so that you can drape it in two long pieces, one about 8″ over the other, anywhere that you need to reduce dust. renovation is always a mess.

the point is, where will you get rehab money? you need to investigate a lot of things, especially what materials cost. a good kitchen will run at least $ 30,000. baths are very costly too, but give a great yield for the investment.

you need to learn about MARKETS. it’s a buyer’s market now. your Realtor (r) should have a lot of experience but not be the top seller. rather, it is much better to get (sorry guys) a FEMALE (because it is for a HOUSE) AGENT that can sit down with you to first explain, to your satisfaction, exactly what “agency” means, single and dual, as well as how the market generally is in the location you choose. about the only houses that i know of in your stated price range are in depressed cities like gary, IN, or detroit, MI, that have so many unemployed people that they cannot afford to even think of buying a house, renovated or not.

you will be best off taking this wisened advice: don’t think of your house as an investment, even if it does increase in value. your HOUSE is that place where you go to lay down your hat after a long day at work. (and, btw, if you spend more than 40 hours a week at your job, i doubt you will have time to renovate and manage a house all on your own).

the seller’s market probably will not come again, surprisingly, very surprisingly, until at least 2009. it is the PRICE of the houses that has driven the market to he**.

don’t do this without a LOT of thinking about yourself, your life style, what you would need in a house (helps with what others would need), what type of house, and most definitely, where, you can get for such small bucks that is in good STRUCTURAL condition first.

what has happened to about 90% of my buyers with your ideas for so many years is that once i counselled them, they, due to their work schedule, came to the conclusion that a condo was their best bet. then when they married, they sold that and the couple bought either a townhouse or best, a single family house.

i wish you good luck and happiness. if you have a specific question, you can write me at the address provided here.

Among the cons are not being able to get traditional financing and no tax advantage of regular mortgage. MH doesn’t withstand the test of time typically as a regular house and is more susceptible to wind damage. Doesn’t go up in value unless it is the land itself.

Depreciation Method – This is the method that has been used for all manufactured homes. The sale price of the home is reduced to either 80% for a furnished home or 95% for an unfurnished home. A depreciation allowance of 5% per year is then applied to the reduced sales price until a maximum depreciation allowance of 35% for furnished homes or 50% for unfurnished homes is reached. This depreciated amount is then multiplied by 40% to create the assessed or “taxable” value. The assessed value is then multiplied by the full tax rate to determine the amount of annual taxes that are billed semi-annually.

Another Con: Averages a 50 yr life span.

Example: Purchase the home for $ 100,000 and eventually convert it to a rental. The basis of the rental is the original purchase price or the FMV at the time of conversion, whichever is less. Assume the basis is $ 100,000.

Each year you rent the property, you are allowed an amount of depreciation. Suppose you have taken (or were allowed to take) $ 40,000 of depreciation on the rental property. Your basis in the property is now $ 100,000 – $ 40,000 = $ 60,000

If you sell the property for $ 75,000, your gain is

$ 75,000 – $ 60,000 = $ 15,000

You have a gain of $ 15,000 even though you sold the property for less than you originally paid for it.

So, take your rental records to a tax preparer who can figure your gain or loss accurately for you. If you have a gain you will of course pay tax on the gain. If you have a loss on the sale, you may be able to deduct that loss in the year of sale, or carry it forward if necessary.