My 1st investment from 2018

1 Reply

Investment Info:

Mobile home buy & hold investment in San Jose.

Purchase price: $55,000
Cash invested: $15,000

My 1st investment. Mobile trailer for short-term rentals, rented on Airbnb. Low maintenance cost and low CapEx. Currently self-managed so the returns and cashflow are great!

What made you interested in investing in this type of deal?

I knew I wanted a trailer later on. So instead of getting it as a liability I got it as an asset. I ran the numbers and they convinced me.

How did you find this deal and how did you negotiate it?

I talked to a couple, which I consider to be experienced investors, they told me how they pull together a similar deal. Once I knew exactly what I wanted, I researched the market, compared new vs. used, holding value and then negotiated hard with two dealers to get a reasonable deal.

How did you finance this deal?

Bank financing for 15 yrs @ 4.5% with $10k down.

How did you add value to the deal?

I added few touches for a comfortable, cozy environment. I provide everything the guests need. As part of initial investment, I got high quality trailer with high-quality bedding sheets, towels, dinnerware, etc.

What was the outcome?

I have bookings whole year. It is very popular, and people like to stay just for the experience. I am very happy with this investment. The cashflow varies per season; on average I get approximately $800 per month to be conservative.

The main outcome of this deal for me was that I started small and it gave me confidence I needed it to go out and look for more deals.

Lessons learned? Challenges?

Lesson 1: Create a space that you feel comfortable living in, so others will find it attractive too.
Lesson 2: This rental type is not for everyone. It takes a little bit more energy and creativity to market it and also good screening of the guests.
Lesson 3: Negotiate everything! even small details with minimal cost. Soon after I learned that all those smaller costs add up.
Lesson4: For this type of investment consider going out of state for pricing.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

No

Wow sounds like a winner! Did you buy this mobile home with the land it was on? If not, where did put it? In a park?

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