SFH or Trailer... PLEASE HELP!

7 Replies

I have a dilema and felt like this was the best place to turn for advice please do not disappoint!

I am currently a teacher making around 30,000 a year on salary.  My credit score is fairly low but not terrible... Anyways I came across some real estate investors who are willing to seller finance a 2 bd 1.5 bathroom home in a not so quality neighborhood which is also about 45 minutes away from the town I work in.  The house goes for 66,000, but they offered me to place a down payment of 1,500 and Ill pay 650 a month in rent until I'm able to secure a proper mortgage through the bank once my credit score gets a little higher ( I have a 611, need a 620 to secure a loan).  They also offered to build a working relationship and mentorship with me in which I can become partner in their investment business and begin to see profits with them since I told them I was interested in investing.  However, while we were finalizing the deal I came across a 4 bed 3 bath trailer which is closer to my job literally 10 minutes away on more space and more land.  The trailer rents for 500 a month.  I am 23 years old with a family and I am trying to make sure I take the best deal because my decision doesn't only affect me but my family as well.  My biggest hesitation about the home is that the payments are fairly high and the risk of being locked into a long term mortgage that I may or may not be able to pay

Please help!

Obviously most family members and non investors say go with the trailer based on superficial values, it also comes fully furnished.  But I needed to hear an investor's approach that wasn't directly tied into the deal

Lots of variables here, you'll have to sort out which ones are important to you- there's no obvious right/wrong answer.

1) 2 bd/1.5 bath vs 4 bd/3 bath... how big is your family? What kind of space do you need?

2) many people say that a shorter commute is worth a LOT for your quality of life. You're talking about a difference of almost 3 hours of your life every week.

3) What is the upside of the community farther away? Is it growing? Are values rising? Is this a property where you feel confident about appreciation? IMO, there is no sense in buying just to buy. You need a compelling exit strategy. If it looks like a slam dunk to get in to this town at this time then it may possibly be worth the inconvenience. 

4) Consider the rest of your financial situation. Do you have outstanding debts? Paying them down before taking on a mortgage may be a good idea. Developing a safety net/emergency fund is a good idea for anyone, but especially if you have kids. Think of the long picture and don't feel pressured to "get in the game" - at your age, you have plenty of time

Thank you! A big factor in the decision making process was simply me "getting in the game"!   There aren't many upsides to the other community compared to the one that I am living in now and I didn't really have a compelling exit strategy other than hoping working with the investors id be able to learn somethings and we all know hope isn't a strategy!  Your advice made things much more clearer and put a lot of things into perspective @Jean Bolger

Glad that helped- and that's exactly right "hope isn't a strategy" lol. I did a super quick  look on realtor.com for Bishopville, SC and environs. There are some really affordable properties there (especially if you are at all handy). I don't think it would be too long before you'd be able to qualify on your own with a local bank. Tighten up your spending, pay down your debt, make a slightly longer term plan - you should do fine. 

I always like to turn  people who are starting out on to the Mr. Money Mustache blog if they aren't already familiar with it. It's a different (and empowering, at least for some) perspective on personal finance and life planning.

@Curtis York Jr  Have you looked into a FHA loan? You can do a low down payment (even as low as 3.5%), and there are direct FHA lenders how will go down to 600 credit.

Good luck.
Upen Patel

If you were single you might be able to take on slightly greater risks but you have a family and their security should come first. Do not over extend yourself financially. Do not get into a mortgage unless you are 100% sure you will be able to handle the payments long term. Do not expose your family to financial hardships. A mobile home is not the same as hard real estate like a regularly built home, It will most likely depreciate rather than appreciate but your family quality of life in a bigger home maybe worth it while you improve your credit whether you really need a 620 or not spending less money and saving more with paying off debt will always prove to be helpful. There is no hurry to get in the game as you put it. You have many years to build up wealth and a retirement through a well thought out and well executed financial plan. 

You have a job and a family. Where are you going to get the extra time to spend with this so called investment group or other investors and if buying the home is already going to stretch you a bit which it sounds to me like it is where are you going to get the money needed to do this further investing? I am not saying anything I am just suggesting you think more completely, ask yourself questions and have answers for those questions. They may just be leading you on so they get you to buy that house at their price. Again not saying this is the case but I am again suggesting you think fast on your feet. 

I always tell people this." if you have $10 spend $3 to earn  $2 more not spend all $10 trying to earn to more because what happens if you should fail to earn more and end up spending what you already have and put yourself in a position where you cannot meet your daily needs"?

Its a good idea to always have a cash reserve for whatever may come up. Take your time, do things with a certain level of comfort and do not stretch yourself, push yourself or try to force things into reality especially if you suspect there may be any chance you can get yourself into a situation you cannot handle well.

What do you mean by "trailer"?  I'm assuming you mean manufactured home, correct?  What year was it built?  Is it on a permanent foundation?  Is it a possibility to buy this "trailer", and he land underneath it as well?