All Forum Posts by: Kyle Strouse

@Michael Jones Yes it's an investment loan. Comps may be hard to come by. The lot is in a rural area. Leonard, TX.

Greetings Texas BP community,

I am trying to purchase a "tiny home" with financing. My father owns a lot that is currently zoned for manufactured housing and has a driveway, pad, electrical, & plumbing hookups. I just need a home to put on the lot. There is a builder near me that makes "tiny homes" which are essentially small mobile/manufactured homes. They are around 400 SF and come fully furnished (appliances, A/C)...one of their "bigger" ones comes in a 2/2 configuration and is around $40,000. I figured another $10,000 for transporting it and utility hookup which I feel is more than enough. So let's say all in I'm around $50,000. We have other rental properties in the area and figure we should be able to get $750-$850 for rent which puts us well above the 1% rule.

I cannot find a lender that will give me a loan to purchase these things. Everyone only wants to provide a loan on a property that is already on the land. The builder provides in-house financing...at 13%. I can pay cash for the thing but would like to avoid it if at all possible. Does anyone have any experience with something like this, or can you think of a more creative way to finance this thing?

Greetings BP community,

I am trying to purchase a "tiny home" with financing. My father owns a lot that is currently zoned for manufactured housing and has a driveway, pad, electrical, & plumbing hookups. I just need a home to put on the lot. There is a builder near me that makes "tiny homes" which are essentially small mobile/manufactured homes. They are around 400 SF and come fully furnished (appliances, A/C)...one of their "bigger" ones comes in a 2/2 configuration and is around $40,000. I figured another $10,000 for transporting it and utility hookup which I feel is more than enough. So let's say all in I'm around $50,000. We have other rental properties in the area and figure we should be able to get $750-$850 for rent which puts us well above the 1% rule.

I cannot find a lender that will give me a loan to purchase these things. Everyone only wants to provide a loan on a property that is already on the land. The builder provides in-house financing...at 13%. I can pay cash for the thing but would like to avoid it if at all possible. Does anyone have any experience with something like this, or can you think of a more creative way to finance this thing?

Deep Ellum, Knox/Henderson, Lower Greenville, M-Streets, and Lakewood are what I would consider "safe" neighborhoods that are somewhat close. There are closer areas that are slowly gentrifying but they're still kinda sketchy. I'm working with a few builders that are building multi-family units (in-between Capitol & Ross) and vandalism/theft is a common occurrence. General rule-of-thumb for that area....the closer you get to I-30, the sketchier the neighborhood.

East Dallas is also one of the hottest areas in Dallas right now, tons of new construction. I'm sure there are deals to be had, but they're going to be hard to find. Right now it seems like the people that are making the most money in that area are builders that are tearing down old homes and rebuilding multifamily townhomes/condos.

Where exactly is the property? The dentistry school is right next to Big Baylor which is right next to downtown. A 10-15 minute drive from that area can put you in a wide variety of neighborhoods....some great, others awful.

@Chris Papa Bill Bailey, based out of DFW.

https://www.bsacpalaw.com/

I like him because he is both a CPA & attorney

My personal residence is in Dallas county...appraised by the county at $369k. My taxes last year were $8,000 with a homestead exemption.

Just like everywhere else the market here is hot. Home prices have skyrocketed the past few years. If you want to find 1% deals you’ll likely have to find those off-market. Newer homes (<10 years old) for under $200k in nice neighborhoods rarely show up and if they do they move quick. A typical 3/2/2 in a desirable neighborhood will likely rent for a little under $2,000/month. Just like Florida, we don’t have a state income tax so our property taxes are relatively high. It’s a great area to invest however it’s not a great time to invest...in my opinion. Population is growing rapidly due to a lot of companies relocating here. Housing supply is really low so demand is high thus driving up prices. Yeah, there is a ton of new construction going up however there is also a major labor shortage causing labor costs to rise as well. At a certain point the cost to build simply won’t be worth it, especially if/when that correction everyone seems to mention finally comes around. Rental rates are also healthy and growing. All that being said I haven’t come across anything that has piqued my interest but that doesn’t necessarily mean you and I are looking for the same thing. I’m not in any rush and know that we’re overdue for a correction in housing pricing and that is what I’m waiting for. If I see a great deal I’ll move on it but I just haven’t seen anything that moves the needle for me. There are good deals out there, turn-key properties that will have positive cash flow and aren’t too hard to find. If you want to find great deals you’ll have to work for it and compete with other investors...but that shouldn’t really be a surprise.

Yeah I wouldn’t work with that guy. I’ll preface by saying I work for a contractor and am pretty familiar with residential construction. If that guy can’t even get you a formal written quote in 2 weeks then what is going to happen when he needs to start pulling permits with the city? A structure like the one you are proposing is going to need some pretty thorough documentation (structural plans, electrical plans, site grading, etc.). Granted my experience is in DFW, but most cities don’t just let you throw up a structure without any kind of permit and getting the permits approved with the city to start construction can be time consuming and expensive. New construction in DFW is going up starting around $100/SF on the low-end. $150k for a 576 SF structure seems a little expensive to me.

Quality Plumbing

https://leonardchamber.com/business-directory/1379/quality-plumbing/

They are based out of Leonard, TX but regularly come down to Collin County.