Mobile home strategy

[Davis Evans]

Hey, 

So my mom inherited a piece of property with 4 mobile homes and a house. But the mobile homes are in rough shape and need a lot of work to get livable, same with the house. She doesn't really know if she should just sell it all or if there is an opportunity she is missing. Any ideas?

[Frank Rolfe]

Figure out how much it would cost to renovate the mobile homes and the stick-built house. Figure out how much they would rent for if renovated. Figure out how much it would cost in expenses to rent out the four mobile homes and the house. Calculate the net income. Cap that income at 10%. Subtract that amount from the cost to renovate all five structures.

Now compare that number to what you can sell the property for "as is". If it's significantly higher to do all that work, then you might proceed. Otherwise, dump it. That project sounds very capital intensive and my bet is that the numbers will demonstrate that you should just sell it "as is" but I leave it up to you.