Cashflow opinion
I'm currently working on a deal for a mobile home on land (real property).
I was anticipating about $250-300/month cash flow. (financed through the bank, 10yr terms). Well due to the appraisal (bank being ultra conservative) I was going to walk away from the deal for the fact that I would have to come to the closing table with too much money which would shoot my ROI all to hell.
I told the sellers agent that the only way I can move forward with this deal is if they are willing to owner finance it. Here are the terms and details.
Property :
1971 Single wide mobile
2 bedroom + 1 office/den area
1.5 bath
12ft x 56
no repairs needed
family park in desirable area
Original contract price : 15k
Appraised @ 12k
I offered 14k if they were willing to hold the paper. They came back with the terms of
14k selling price, 3k down leaves a balance of 11k.
11k over 5yrs will cash flow about $175/month after PITI and after 10% of gross rent for Misc.
Obviously that is well below the numbers I was hoping for. I don't want to jump into a bad deal, but at the same time I don't want to walk away from a good one. Especially if I'm being hoggish about it.
Would you guys be happy with 150-175 CF/month or is it not worth the headache? I try to shoot for $200/month. Especially with an older property that can have appliances or other problems at anytime.
What are your thoughts/opinions on this deal?