Advice wanted: unique rural investment property

[Elijah H.]

We have been looking for investment properties in our local rural area and found an interesting piece of property for sale.

It is a 7.5 acre lot with 1 manufactured home, 1 stick built home, and three mobile homes which are all currently occupied by long term tenants. There is also a horse barn and horse fields that could be rented out, a garage, and several small utility and storage sheds. There are also 2 wells and 3 septics total. There’s about $4500 of monthly revenue on the property with potential for more.

The asking price is $430,000 and the owner wants to make a cash sale.

There are multiple avenues of revenue on this property which makes us interested, but there are some legal and permit issues which have us concerned.

The property is not zoned to have the mobile units and stick home on it and so we wouldn’t be able to finance this property without losing the units. If we were to finance, it wouldn’t appraise for nearly the asking price of $430,000.

We don’t have the cash to buy outright but are considering whether we should inquire about owner financing.

We are curious if anyone on this forum has advice on whether this would be an unconventional but profitable investment or if it sounds like more trouble than it’s worth?

Thanks in advance

[Justin Frank]

@Elijah H.

I am from the Yelm area as well. Awesome you are getting so close to making your first deal. This deal would scare me personally simply because I don’t think there is a very good exit strategy. It sounds like you could cashflow on the property and there are a lot of options for income. However, as you stated most of the structures (your income) is not permitted and/or not legal which could be a very big problem. On top of that if all of your mobiles were goneand you were to get an appraisal to finance on the property it wouldn’t match or exceed the current seller asking price and at this point you would have yourself a resedential home that is not cash flowing which then turns this deal into an expense. I would decide what’s your exit strategy could be on this property and what legal forms of income you can get from this property and then present an offer to the seller based on that.