Need opinions on if this is a good deal!

[Matt Gray]

Seeking Input on a Multi-Family/RV Park Real Estate Deal

Hi everyone! This is my first post here, and I’m looking for feedback from experienced investors on a real estate deal I’m considering. I’m under contract but haven’t processed funds or fully committed yet. Below are the details of the deal, my planned approach, and my concerns. Any advice or insights would be greatly appreciated!

Property Details

Purchase Price & Financing: $500,000 owner carry, 10-year term, 5% interest rate, balloon payment at the end.

Zoning: Multi-family, mixed-use, RV parks.

Current Condition:

3 single-family homes (2 with tenants paying $600/month each, 1 with a squatter).

7 manufactured homes (all condemned or in severe disrepair).

3 cottages (in poor condition).

Monthly Expenses:

Mortgage: ~$3,000/month.

Sewer: $1,300/month ($100 flat rate per connection, 13 connections).

Taxes & Insurance: ~$700/month.

Total: ~$5,000/month in carrying costs until properties are fixed and generating income.

Proposed Plan

My strategy is to renovate and reposition the property over the next 2 years to maximize cash flow. Here’s the breakdown:

Demolish 7 Manufactured Homes & Convert to RV Sites:

Cost: ~$60,000 for demolition and RV site preparation.

Expected Income: 7 sites at $700/month each = $4,900/month.

Address Squatter & Renovate Third Home:

Cost: ~$30,000 for squatter removal and renovations.

Expected Income: Rent at market rate of ~$1,500/month.

Renovate 3 Cottages:

Cost: ~$50,000 per cottage ($150,000 total).

Expected Income: 3 cottages at $1,500/month each = $4,500/month.

Renovate 2 Occupied Homes:

Cost: ~$25,000 per home ($50,000 total).

Expected Income: Increase rents to market rate of ~$1,800/month each = $3,600/month.

Financial Projections

Total Investment:

Mortgage: $500,000.

Renovations & Development: $290,000 ($60K RV sites + $30K third home + $150K cottages + $50K homes).

20% Contingency for Overages: $158,000.

Total Estimated Cost: ~$948,000.

Projected Monthly Income:

RV Sites: $4,900.

Third Home: $1,500.

Cottages: $4,500.

Renovated Homes: $3,600.

Total Gross Income: ~$14,500/month.

Projected Net Income: $9500/month after expenses ($5,000/month carrying costs).

Timeline: Approximately 2 years to complete renovations and stabilize income.

My Concerns

I’m hesitant to pull the trigger on this deal due to the high upfront costs, the complexity of managing renovations