Residential Real Estate Broker · Harrison, AR · Member since 2014 · 3 posts · 0 votes
I'm at a crossroads. I am looking at $2.5M properties and I've narrowed it down to two options, 1) a 60-unit apartment, 4 hours from home, that should cashflow $60k annually with a property manager in place, or 2) a 150 unit ground lease trailer park, 1 hour from home, plus a commercial laundry facility open to the public. In total, it should cashflow $110k per year, but will require more of my time. There are 3 employees related to the park manager and laundry facility. Lots of moving parts, but it's more money and closer to home. I have no experience in trailer park management, but a good friend owns a couple and is willing to help.
if you have no intention of investing in more properties, go with option 2. if you plan on reinvesting the money you make, you should take option 1. if you take option 2, you'll always wish you had more free time.
"I have no experience in trailer park management" I think thats your answer, even with your friend as a resource . A friend of mine is snapping up a lot of these parks and he describes it as very management intensive, (if profitable to be fair). And you would have 3 employees and the headaches of a whole separate business with the laundromat. As @Matt K. pointed out, is that a salary you like?
@Ryan Caughron It all boils down to how much you value your time. For instance, let's assume you're making 100K per year but because you are young, you are willing to utilize your "free" time in order to learn a business/work.
Hence, even if the free time only yields an extra 50k/year, you are getting more than just a financial reward.
@Matt K., not an easy answer! My gut tells me I'd do quite a bit of work for $50k, but as I grow it wouldn't be as worth it to me. @Andrew B., thanks. Hadn't thought about it like that! @Jonathan R McLaughlin, good point. I am definitely more experienced in the residential space.
Question: Would the 1 hour vs 4 hours away bother you?
We have a PM managed multi (established company, established building) about 3 hrs away and the distance hasn't been a hassle even in the problem times. So much stuff is on the phone and the occasional well timed appearance does a lot. To be fair I have a partner so we split those appearances. And we did make sure it was a place we wouldn't mind spending the occasional weekend or overnight.