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Updated about 1 year ago,
SD-IRA Cash - buy SFH or mobile home?
I have a SD-IRA and looking to deploy $180k into a real estate play. I plan to start withdrawing in next 20 years. i likely will not be getting financing as it would be a nonrecourse loan at roughly 9% and 30-40% down. I am more interested in high cash flow within this ira so I can reinvest any profits into some syndications. two scenarios as follows, but can't decide and would love your opinions:
1. I found a "turnkey" mobile home provider that owns the park, and will sell a brand new manufactured double wide home to me for $100k. They will find a tenant that wants to purchase and will create a note. Essentially, I would be buying the seller financing note and it will roughly cash flow $1500/mo (roughly 13%, 30 yr w 5K down). They will handle all management but tenant owner is responsible for most maintenance plus lot rent of $500. my main concern is depreciation of the asset; if the tenant owner does not execute and complete purchase i could be left w costly repairs to make it attractive to a new buyer tenant. I am also concerned with the length of term, 30 years for seller financing. Park is located near a military base and has been rated high (5 stars) on google if that's any consolation.
2. Buy a traditional single-family house: I could buy a single-family house, with lower cash flow, but likely would have some built-in appreciation.
3. Bonus scenario: bite the bullet and get a non-recourse loan with 30 to 40% down and buy 2? properties w the 180k. maybe cash flow is lower but ROI is better?
thanks in advance!