New Investor with ???s

[Justin Smith]

Hey everyone, first time poster, long time lurker here. Quick intro for me- my wife and I got married in 2010 and bought our first home for 74k, a 4 Br/2 ba, 1,215 sq. ft quaint little home close to a small college with the plan of renting it to college students someday. Fast forward to now, we live on the other side of town and college kids are paying our line of credit off on the old house as well as our mortgage on the new house. This allows my wife to stay home with our 3 babies, so we are super grateful for that. At the same time as we were moving houses, a realtor brought us an investment opportunity that seemed too good to be true. A 4br/3 ba mobile home on an acre that rented by the room for $575/month (all expenses included). It was for sale under appraisal value- 80k and had appraised for 94k. So we went for it, and it was awesome. Cash flowed around $1,000 every month for about 6 months, but then all the tenants got laid off (Engineers on weekly contracts) when a local TVA project was complete. So now we have it under a one year lease for $750/month to a family, barely cash flowing at all. Tried to sell and couldn't. But there is another foundation on the property where there used to be another double wide, already has septic, water, electricity. So after much deliberation, we have decided to put another home on the property to try and increase the cash flow. Insurance and taxes are next to nothing when adding a new home (less than $300/year). So the question is... even though mobile homes don't appreciate, is this something we should pursue? We could get a really nice looking 3/2 mobile home for under 30k, or should we build a small home instead? Looking at around 70k for a nice 2/1.