Thinking about starting a trailer court..shoot holes in this idea

5 Replies

Good morning everybody! Its been a while since I've last posted. A lot has changed, we have purchased and sold several homes, and are in a good financial position to make our next move. Ill try to keep this short... We purchased a piece of property that is 30 some individual lots grouped together. The covenants are non-restrictive (we border the city, but are not in city limits. Development is moving in this direction quickly) We own this outright, no mortgage, and we do not live on it. City water, sewer, gas, and electric are all in place and run through the property. We are currently finishing up our first mobile home on it, a 1980's 2/2. It is turning out really cute, and should rent well. We installed this one because the property is otherwise a big expensive garden that we like hanging out at, and we wanted it to produce a little income. This place should rent for 850-900, and the rent market in our town is crazy hot. (sheridan, wyoming, if anybody is curious) 

We will have around $50,000 into this house all said (including taps, ill expand on that in a min) , and thats a complete remodel and done well. That said, its probably more expensive than we can source mobile homes for. I would say in the ball park of 20-25000 for a move in ready home. If we found a 3/2, it should rent for closer to 1000. 

I love these numbers, as a dumpy 3/2 that needs torn down is going for 250,000 right now and still rents for what we can rent these for. My wife (I'm the kite, shes the string that keeps me in reality) is on the fence about starting up this trailer court. Not that she thinks its trashy or anything, more that shes afraid we wouldnt attract quality tenants, and we have been very fortunate so far, tenant wise. 

My thoughts, and the #'s:

We have 6 or so lots that are level, and readily accessible to utilities that we could develop easily. 

Do them 1 at a time, and as the right houses are found.

spend 20-25000 on the house. 

Taps per lot are 15,000. We can excavate it and save a couple thousand so 15,000 is a pretty set cost.

another 2,000 to move and level it.

so lets say were in them another $50,000/home ready to roll after putting in a gravel driveway and whatever other things pop up.

What are your thoughts on this? What downsides am I missing? I understand the homes will not appreciate in value, but with lumber prices right now, were concerned with building anything anyway. There is a 10+ unit SFH subdivision currently going in literally right next door, that are selling for $300+, so our property is appreciating in value substantially with or without us building.

Well, so much for keeping this short. But I hope I gave enough detail. Please give me your thoughts! -Jake

It's not technically a trailer court, right? A trailer court (mobile home park) is typically one piece of land with multiple rented spaces, common drives, and maybe some common space like a small playground or club house. If I understand correctly, you have 30 separate pieces of property that happen to be next to each other. Is that right?

I don't see a downside to it. It's cheaper and easier to put mobiles on each lot and you'll get a better return than you would with a stick-built home on each lot. If need be, you can eventually sell them off one-by-one.

The only possible downside I see is that the properties will appreciate a little slower because they have mobile homes and are surrounded by mobile homes. There won't be many buyers that want to purchase a lot and build a nice house next to a bunch of mobile homes. If you're holding long-term, that doesn't matter. 

Nathan, you are correct, they are multiple lots so it would be more like a small subdivision, just with mobile homes. 

We currently don't have plans to sell any of it off, but you never know what the future holds, so that is something we will keep in mind. 

How is the market on your side of the mountain? Our influx has been mostly people moving from densely populated suburban areas. Are you seeing the same over there?

@Jake Kraft , even Thermopolis has seen an influx of people moving from larger metropolitan areas.  Prices are rising, but obviously nowhere near as much as in Sheridan.  Cody has seen significant increases in valuation as well.  I have been trying to purchase a property in Sheridan, but have pretty much given up.  Let me know if you see any deals you are not interested in.

Originally posted by @Jake Kraft :

Nathan, you are correct, they are multiple lots so it would be more like a small subdivision, just with mobile homes. 

We currently don't have plans to sell any of it off, but you never know what the future holds, so that is something we will keep in mind. 

How is the market on your side of the mountain? Our influx has been mostly people moving from densely populated suburban areas. Are you seeing the same over there?

Yes, lots of people coming from California, Washington, Oregon, New York, New Jersey, etc. It seems the events of the past year have lit the spark to what may turn into a major migration event. Bozeman has grown about 60% in seven years and I feel Cody is ready to do the same.  It will be very interesting if this continues.

 

 

@Jake Kraft , I don't see any down side as long as you like the work and dealing with the tenants, mobile homes are the last affordable housing available, I'm sure there won't be a shortage of tenants as more and more people are ditching overpriced homes in exchange to live a little, good luck