Please BRRRR Responsibly
So I'm a SFR investor and realtor in the greater Des Moines Iowa metro. And I'm a huge advocate of the BRRRR method.
But holy cow is there some bad publicity going around right now on a trailer park that just changed hands a week ago or so and they are upping the rent 150% in 60 days. Sorry if the new owner is reading this. The deal feels like a 6-18 month BRRRR and sale to me.
I'll be the 1st to say I don't know a ton on trailer park investing outside of listening to the podcast and going to best ever conference. But raising rent on a trailer park from 200-500 a month is gonna cause a lot of house hold stress in low income households. If you make that big of a jump so quickly you darn well be adding value before the jump in prices. Or have a wait list a mile long, which very well could be the case.
I'm sure this new buyer saw $ signs all around... fast growing suberb with trailer park close to new city amenities, no doubt the land value is sky high. I don't doubt rent is way under priced. But I also know in Residential housing we have % caps that we can raise the rents each year. Maybe this isn't the case in trailer parks since it's only a lot. Again I'm not an expert in this area.
I guess what I'm truly trying to get at is don't forget about the human element of our business before we make a dime.
At the heart of our business we are all in this to make money and lots of it... but we are also playing with a human necessity of shelter. You can brag to our friends about how much money you raked in a deal. But raising rents 150% in 60 days and forcing families out of a home isn't something you'd brag to ya mother about, I hope.
Allen