Mobile home during law school?

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tilapiahollandaise
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Mobile home during law school?

Postby tilapiahollandaise » Fri Dec 17, 2010 9:38 am

The "buying a house during law school" thread got my brain fired up: what about a mobile home? I had never thought about buying an obscenely cheap mobile home with the rather large living expense loan you're given during law school and reselling it later. According to mhbay.com there are mobile homes in Houston with more than enough space for $20,000 and lower--and those are 2-bedroom mobile homes. The idea of buying a mobile home and selling it back after law school to pay the "living expense" aspect of my loans back is extremely attractive. Of course, the downside is that you have to live in a mobile home for three years--but as long as you don't get robbed and can get to class, it shouldn't be a problem.

Am I insane? Is this plan half-baked, or viable?

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homestyle28
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Re: Mobile home during law school?

Postby homestyle28 » Fri Dec 17, 2010 9:46 am

tilapiahollandaise wrote:The "buying a house during law school" thread got my brain fired up: what about a mobile home? I had never thought about buying an obscenely cheap mobile home with the rather large living expense loan you're given during law school and reselling it later. According to mhbay.com there are mobile homes in Houston with more than enough space for $20,000 and lower--and those are 2-bedroom mobile homes. The idea of buying a mobile home and selling it back after law school to pay the "living expense" aspect of my loans back is extremely attractive. Of course, the downside is that you have to live in a mobile home for three years--but as long as you don't get robbed and can get to class, it shouldn't be a problem.

Am I insane? Is this plan half-baked, or viable?


So 2 things: first you have to decide mobile home in a trailer park vs. mobile home on a piece of land. Trailer parks will have all your hookups (water, electricity, etc.). Land will need to either have these available, or you'll have to pay for them. Second, it's often VERY difficult to sell a mobile home, they're so cheap new, why would someone pay for a used one?

You'd have to experience a trailer park some before buying into one, some are fine, some are nasty, in my experience. Obviously, on your own lot, you have less to worry about, but I wonder how many mobile homes+lot are available in houston. Personally, if you wanted to buy, I think your better off w/ condo or small house.

Christ, why do I know so much about mobile homes?

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tilapiahollandaise
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Re: Mobile home during law school?

Postby tilapiahollandaise » Fri Dec 17, 2010 9:54 am

The condo thing sounds great too. In places like Houston you can buy a condo for $30,000 or less (edit: the lowest I saw was $20,000), which is roughly equal to two years of living expenses at U.Houston; the only problem is, I have no idea what the closing costs on a $30,000 condo would be.

Still, both of these options sound much better than putting money into something temporary like rent. Is there some factor I'm not considering?

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homestyle28
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Re: Mobile home during law school?

Postby homestyle28 » Fri Dec 17, 2010 10:03 am

tilapiahollandaise wrote:The condo thing sounds great too. In places like Houston you can buy a condo for $30,000 or less, which is roughly equal to two years of living expenses at U.Houston; the only problem is, I have no idea what the closing costs on a $30,000 condo would be.

Still, both of these options sound much better than putting money into something temporary like rent. Is there some factor I'm not considering?


I think the usual estimate is 5% of purchase amount for closing costs. You have to really do due diligence on a 30k condo, is it a foreclosure, condition, etc. Upkeep costs/taxes/insurance/mortgage interests are all costs you don't have when you rent. Also, owning tends to be a little more of a time commitment, it's your job to call the plumber when the drain backs up, etc. That being said, you have more freedom when you own. And, if you do your homework can often save some money, esp. if you think you'll stay there after LS (you have to factor in realtor fees when you sell as part of the $ you lose).

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tilapiahollandaise
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Re: Mobile home during law school?

Postby tilapiahollandaise » Fri Dec 17, 2010 10:10 am

Damn, you give great replies.

Well, the living expenses at UH for this example are $15k/year. If two years of LS expenses paid for the condo, could another year's worth go toward everything else? That way, even if they ended up being something obscene like 10k, I'd still have $30k toward my loans (post-sell) and $10k in the money abyss where rent would otherwise go, yes?
Last edited by tilapiahollandaise on Fri Dec 17, 2010 10:16 am, edited 1 time in total.

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thelaststraw05
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Re: Mobile home during law school?

Postby thelaststraw05 » Fri Dec 17, 2010 10:16 am

tilapiahollandaise wrote:Well, the living expenses at UH for this example are $15k/year.


Keep in mind that living expenses are supposed to cover food and such as well. You don't want to budget it TOO tight.

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homestyle28
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Re: Mobile home during law school?

Postby homestyle28 » Fri Dec 17, 2010 10:22 am

tilapiahollandaise wrote:Damn, you give great replies.

Well I'm pretty bored at my job.

tilapiahollandaise wrote:Well, the living expenses at UH for this example are $15k/year. If two years of LS expenses paid for the condo, could another year's worth go toward everything else? That way, even if they ended up being something obscene like 10k, I'd still have $10k toward my loans (post-sell) and $10k in the money abyss where rent would otherwise go, yes?


The thing to do is to run an amortization table (excel has a simple one). Decide if you're goal is to pay off the condo in 2 or 3 years, or to maximize monthly cash flow (so say take a 15 year mortgage). On a 30k condo, you'll want to put 20% down to avoid mortgage insurance, so you're financing 24k. Assuming you have average to good credit, you should be able to get a loan at around 6% currently. To pay off 24k in 2 years, your montly payment is $1064, 3 years is $730, and 15 years is $202. Now, compare those to rent for a comparable space, that'll give you an idea of money saved/lost by month. If it were me, in this economy, I'd do a 15 year loan, maximize my monthly savings that way, even if you sell it for a little loss, you've probably came out a head and you have the cash in your hand. If you choose the 2 or 3 year plan, you have to rely on the sale of the condo to get the $$ out. but that's just me. Obviously, the faster you pay it off, the less $$ you lose to interest. Finally, remember that when a school says living expenses are 15k/year you have to eat/clothe/travel off of that too.

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tilapiahollandaise
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Re: Mobile home during law school?

Postby tilapiahollandaise » Fri Dec 17, 2010 10:29 am

Thanks again!

As far as living expenses are concerned, with food+gas+internet+phone my yearly expenses came out to $4500, so I could imagine being able to budget a $25k condo on there to resell later. In retrospect though a $30k condo I'm not sure about, but it seems like summer work could balance it out. However, I don't know how common paid internships are--if they're not at all, could I still go with the $25k option pretty smoothly?

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homestyle28
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Re: Mobile home during law school?

Postby homestyle28 » Fri Dec 17, 2010 10:32 am

tilapiahollandaise wrote:Thanks again!

As far as living expenses are concerned, with food+gas+internet+phone my yearly expenses came out to $4500, so I could imagine being able to budget a $25k condo on there to resell later. In retrospect though a $30k condo I'm not sure about, but it seems like summer work could balance it out. However, I don't know how common paid internships are--if they're not at all, could I still go with the $25k option pretty smoothly?


For 1L summer they're a dying breed. the 25k vs 30k all depends in how you finance it. The shorter the loan term the more difference it makes, over 15 years, a 20k loan vs 24k loan is about a $40/mo difference.

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thelaststraw05
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Re: Mobile home during law school?

Postby thelaststraw05 » Fri Dec 17, 2010 10:38 am

homestyle28 wrote:Now, compare those to rent for a comparable space, that'll give you an idea of money saved/lost by month. If it were me, in this economy, I'd do a 15 year loan, maximize my monthly savings that way, even if you sell it for a little loss, you've probably came out a head and you have the cash in your hand.

...

Finally, remember that when a school says living expenses are 15k/year you have to eat/clothe/travel off of that too.


That is what I was trying to say, but was too lazy to type out.

I would certainly recommend doing this if the mortgage payment was going to be less than the rent. Then you have profited in two ways - 1) lower payments, 2) you get some of it back.




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