I found two mobile homes on a acre and a half of land going for 127k. The renting income is 1450 per month total . There is another lot (mobile) ready for plug and play on the property.. and that could bring in additional five to $600 a month... Yes it sound like a good deal or no?? This will be my first run of property or should I say property... Please help!!
@Ronnie Williams I forgot to mention, that the monthly mortgage rate will be round 6 to $700 per month... Due to me putting down 25%.. And of course I will try to get it for 80% of the properties value..
New Bern, NC · Member since 2017 · 246 posts · 173 votes
5y
@Ronnie Williams
Hey Ronnie. What bank did you find that will mortgage that?
On the surface, those numbers are good enough it would prompt me to analyze deeper. What market is it in? Is there high demand? What's the area like directly around the property? Property taxes? Insurance costs? The extra hookup is intriguing. You can often find mobile homes cheap on Facebook marketplace or Craigslist, but you would most likely have to buy it cash.
Thanks for your response. It's thru a local bank. There are several Mobile homes in the area ...it's a rural area in louisiana.. property taxes are $41 a month ...
New Bern, NC · Member since 2017 · 246 posts · 173 votes
5y
@Ronnie Williams
Do the homes need repairs? If so, how much? How much demand is there for rentals in the area? Where I am, when we list a home for rent, demand is high so it is easy to pick good tenants fast, and they tend to stay, so vacancy is low.
New Bern, NC · Member since 2017 · 246 posts · 173 votes
5y
@Ronnie Williams
I would ask the owner to show you rent payments on the property for the past year so you know the existing tenants have been paying. I also like to ask how old is the roof and the AC so I know how soon they need replaced and I know how to budget. And I am assuming you would own the land too right?
@Patricia Taveras awesome tips!!!!!! I will do just that !!! Yes the acre and a half comes along with the two mobile homes... The two mobile homes are actually on the property..
This will be my first property, so I want to make sure I make a wise investment.. I wasn't sure if I should do a mobile home, or a traditional house first,keeping in mind that a traditional house appreciates unlike the mobile home..
New Bern, NC · Member since 2017 · 246 posts · 173 votes
5y
@Ronnie Williams
Thanks! One more question I would have - is it on city water or septic? Septic wouldn't be a deal breaker for me, but again, it could be a big expense in the future.
You know I'm trying to avoid telling you yes or no because it has to be your decision because it fits with your goals and works in your market. But I will say I would be interested in this deal if it were in my market. Good luck! And enjoy the process! I always do!
@Patricia Taveras 🤔.. I'm not sure..I will check on the septic ... I will continue analysing as well... Im anxious and nervous at the same time, I pray to God that all goes well 😁.. thank you again for all your wise words and knowledge!!!
Investor · Cincinnati, OH · Member since 2015 · 242 posts · 182 votes
5y
@Ronnie Williams. First break the deal apart and do some due diligence. How much is the land worth? Research other sales. What do you know about the mobile homes such as age, condition, needed repairs, current value. If land value and mobile home value don’t add up to $127k that tells you something.
Second, get a financial analysis model (such as available on BP), do due diligence on operating expenses, market rents, etc. Populate the model with real, verified numbers including possibly factoring for utilities cost increase, property tax increases, maintenance/repairs, vacancy, etc. the model should tell you cash-on-cash return and other metrics. This will help you determine if the return on your cash out of pocket (down payment, closing costs, escrows, etc.) are worth it. Then you can answer the question “Is this a good investment”. No one else can decide for you.
New to Real Estate · UT · Member since 2020 · 17 posts · 8 votes
5y
@Ronnie Williams
Hey Ronnie, Ive already seen some other ppl mention things id talk abt, and just in case ill list what i personally think is important.
-Rent Income
-Additional Income (i.e. storage, laundry, or others)
-property tax
-home insurance
-utilities (depending on who'll pay for them)
-lawn care?
-vacany backup money
-property manager if any
-anything u'd put aside for the properties rainy days (upgrades/repairs in future)
I dont want to make the list too long, but i hope you get the idea. once you find all the numbers that will be put into play you can more accurately determine your cash flow/profit.