Investor · LaFollette, TN · Member since 2013 · 18 posts · 7 votes
I’m trying to replace my W-2 income with real estate. I currently own several smaller rentals and now I have a deal that may help me reach my goal, but it’s not what I had in mind when I started out. It is a mix of multifamily and mobile homes on one large parcel. It’s a big investment for me and while I am definitely a cash flow investor, I still want appreciation and mobile homes don’t seem to fit the bill. This is an extremely well kept property, so no concerns there. Has anyone changed up their criteria slightly if they come across a deal? Do I modify my expectations? Does it matter, as long as it cash flows? My intention is to hold forever, but what if I want to refi?
@Gretchen Parlier Sounds like an interesting property... If it has the infrastructure (plumbing, electrical etc.) to hold mobile homes that’s awesome! What if you fix and flipped the mobile homes? You could offer seller financing and charge rent for the new owners who will most likely want to keep the mobile home on your lot if it’s nice enough. That way your getting rid of a depreciating asset (the mobile home) but creating two income streams for each mobile home: lot rent and a mortgage payment!
@Gretchen Parlier what kind of buildings are the multi-family units? How big is the property? In my area mobiles attached to land have appreciated some over the last ten years but I would assume that it’s mostly land appreciation. I’m facing a similar situation about whether I should go down the mobile home route. I know some people have done well with them. Cash flow is cash flow, but dependable appreciation is awesome too 🤷♂️
My original plan was to scale up from my current assortment of duplexes and quads to a larger complex of 10+ units in 1 or 2 buildings. Besides appreciation, I'm concerned about higher maintenance for multiple trailers. And going through the process of converting this to a tenant owned home park. I know it's not rocket science, but am I buying myself a job?
@Gretchen Parlier Congrats on finding this potential deal and having other properties under your belt!
What is your why in investing in real estate? You say you want to replace your W2 income, but for what purpose? How much cash flow do you need to replace your cash flow?
It looks like a real opportunity you have with this property. Have you thought about how you would manage the multifamily piece? Have you considered hiring property management to manage the property for you? For what you pay for in PM fees, it may save you the headache managing everything and you will get to enjoy the cash flow you want. Just make sure to run the numbers thoroughly and conservatively to account for hidden expenses.
@Gretchen Parlier If the mobile homes on the property don't work for you, you may want to look into selling them off individually to someone with some land or lots to put them on. Good luck with the deal!
@Gretchen Parlier Sounds like an interesting property... If it has the infrastructure (plumbing, electrical etc.) to hold mobile homes that’s awesome! What if you fix and flipped the mobile homes? You could offer seller financing and charge rent for the new owners who will most likely want to keep the mobile home on your lot if it’s nice enough. That way your getting rid of a depreciating asset (the mobile home) but creating two income streams for each mobile home: lot rent and a mortgage payment!
@Gretchen Parlier We have 3 small parks like this. It takes a lot of work to manage but we have a couple of assistants who manage these properties for us. This would be something we would buy in our area.
We have been temepted to change up our criteria but have stuck to our guns. Most recently this came into play when we were looking at a small mobile home park.We do look carefully to see if there are any efficiencies we think we can gain. For instance we just purchased 49 units and initially it was on the low end of our criteria (just barely made it) We then ran a proforma with the improvements we thought we could bring and it now easily meets our criteria. Now, we didnt just fudge the numbers we took the rents and ran them against other units we have in the area and bumped them up some but not all the way to our other units.
If I would’ve stuck to my original plan and investments I wouldn’t known any mobile homes. I also do not believe I would have the financial success I have if I would’ve stuck to my original plan. I believe after a short period of shiny object it is best to find the niche that best fits your personality and goals and stay hyper focused for at least six months.
I am a cash flow only investor and that is what mobile homes do for me, but I can tell you we’ve had some appreciation even with our really old ones. I can also tell you we hit a number we feel is crazy and equity and my wife said “ it doesn’t feel like we have that type of money“ She is completely right because equity does not put food on the table or buy a plane ticket to travel!
Hi @Gretchen Parlier. What did you decide? When you described this it did not sound like a mobile home park, but perhaps a field with a handful or more of company owned mobile homes. If that is how it must be, then I would run away. Unless you love extreme maintenance and hassle.
When you described this it did not sound like a mobile home park, but perhaps a field with a handful or more of company owned mobile homes. If that is how it must be, then again, I would run away. Unless you love extreme maintenance and hassle.
However if it could be deemed as a mobile home park and zoned as such, it certainly could have significant appreciation. Just like any other commercial real estate asset. Good luck!
My original plan was to scale up from my current assortment of duplexes and quads to a larger complex of 10+ units in 1 or 2 buildings. Besides appreciation, I'm concerned about higher maintenance for multiple trailers. And going through the process of converting this to a tenant owned home park. I know it's not rocket science, but am I buying myself a job?
@Paul Moore I decided to pass on this deal. It is 8 acres with a small mobile home park, two SFHs, and a triplex. All are in excellent condition. I think it is probably a great investment - for someone. Mobile homes are just not what I’m looking for right now.
@Gretchen Parlier, I invest heavily in mobile home parks now. But in a prior decade, I made 4 investments in individual mobile homes. Three of them were the worst investments of my life! Disasters. That is what you would likely be getting into here, so I'm glad to hear you passed. Best wishes from here!