My costs didn't support the rents

[Dagan Flowers]

Redeveloped a mobile home park into duplexes. Tried to get the college students down the street but the market wasn't strong enough for the students (small population). Built them too big (bc I wanted the students). 

Total Cost 1.2 million

City population: 16,500

2 duplexes, each door is 1750 sq ft. 4 bed/3 bath.

Total Rents 5630 (Im losing money..it kills me.)

I have the land to build 2-3 more buildings when the time is right. I got killed framing this past april. The market is stronger for a 2 bed/1.5 bath. I believe I can rent that size for 1295--near the same price. Do I build some smaller duplexes in the future, or even 2 quads to try to get back in doors what I lost in my mistake of building these first 2 way too big?

I don't want to keep sinking money into this project but I don't want to give up just yet.

[JD Martin]

Quote from @Dagan Flowers:

Redeveloped a mobile home park into duplexes. Tried to get the college students down the street but the market wasn't strong enough for the students (small population). Built them too big (bc I wanted the students). 

Total Cost 1.2 million

City population: 16,500

2 duplexes, each door is 1750 sq ft. 4 bed/3 bath.

Total Rents 5630 (Im losing money..it kills me.)

I have the land to build 2-3 more buildings when the time is right. I got killed framing this past april. The market is stronger for a 2 bed/1.5 bath. I believe I can rent that size for 1295--near the same price. Do I build some smaller duplexes in the future, or even 2 quads to try to get back in doors what I lost in my mistake of building these first 2 way too big?

I don't want to keep sinking money into this project but I don't want to give up just yet.

It looks like there's just not enough info here. You bought a MHP. How many units? Did you remove all the units before you started building the duplexes? Are you saying that the total amount of property in the park is enough to build 4-5 duplexes total? That sounds like a really expensive MH park, as I can't imagine there could have been more than 8-10 total trailers if that's the limit of your building ability.

Without having anywhere near enough information, here's some suggestions:

1. Split the property from the existing duplexes from the remainder of the property into individual lots and sell off each duplex. If your market is anywhere near the rest of the nation, for brand new units if you can get say $125-150/sf for each unit, that's $875k-$1.0 million right there. That gets you almost back to zero, with some left over land to develop or split and sell if there's any money in lots where you are.

2. Rezone and build one 8-10 unit townhouse building. Sell off a few units to cover your construction costs and keep the remainder as rentals.

3. Bring some MH spaces back into the remaining area and rent out the spaces to make up some of the difference.