Looking for advice from those with experience in similar situations.
I have a property that I purchased as a residence about 7 years back. Property is approximately 3 acres (2 lots combined) in a small decent neighborhood consisting of 130k-175k dollar homes. The property currently has a 16x80 mobile home on it and a garage. As far as the land itself, terrible yard, mostly a very steep hill and probably 20 large tree stumps and 20 large hardwoods. Some even lean over the home and occasionally drop large brances on and sometimes through the roof of the home.
We later purchased a house and had no intention of becoming landlords at the time. However, someone came to us and asked if they could purchase the home Contract for deed. After considering the extra income to offset the new mortgage, we agreed.
Now, two years later, the buyer has decided to move on after running the place down and littering the property to look like the local landfill. We have grown to love the idea of REI for a source of passive income and are now left with a decision to make.
Plan A: renovate the trailer and clean up.
Plan B: pull out the old trailer and pull a nicer one in
Plan C: remove the old trailer and build on the lot (to sell or hold as a rental)
Renovation would cost 5-6k dollars which would be the cheapest route. My fear of this route is that we will only draw in tenants that we may not want to deal with.
Pulling in a new mobile will be expensive and our equity will be next to nothing over the course of the next few years. Of course, we would likely find better tenants with a nicer home on the property.
Building a House seems like the best option, but it seems with a mortgage on our current home that a lender would be hard to find and though I have significant construstion experience, building a house is intimidating and probably out of my league. I would probably attempt to GC the home myself as I do have alot of subcontractor contacts and could do some of the work myself (electrical, trim carpentry, flooring, painting, cabinets and all "puchout" tasks).
Even with a post this long, I'm sure there are alot of factors I've left out. Any opinions and views from different standpoints would be greatly appreciated. If anymore details are needed I'll add more info. Thanks
You could owner finance it to someone as a fixer upper or handyman special. Let the new owners clean it up and fix it up. People who cannot get traditional financing are willing to do the work in such cases. Google John Fedro
@Charles Poindexter, Thanks for the suggestion. I looked up John Fedro and have been doing some reading. I will certainly consider owner financing the property as it would definitely save me alot of time and labor.