Cash flow (positive) : Mobile homes vs. Town homes/SFH

[David Greenhow]

I'm a relative newbie to real estate investing, and trying to figure out which direction to take.  I'm very time challenged, but fortunate enough to have savings that I want to put to work in the form of positive passive cash flow.

I have rented out my town home. It's cash flow positive, and is fully paid off.

Everything is automated or outsourced. It's easier than I thought, and given me an appetite for more passive income.

Being a software engineer, I'm all about hands off, automation and scalability. I outsource daily or monthly management to a property manager.

After HOA, property taxes, insurance, maintenance and Property Manger costs, it nets on average $800 a month.

I have additional savings that I want to put to work. However, it would take approx $175K to acquire a similar property to the one I already own. So while I love the mostly hands off approach , and the ease and stability of renting, the income is only about 5% a year of the committed capital.

Buying a mobile home for $3OK, would yield at least a 10% income stream. However, I am concerned about the physical property maintenance costs in terms of time. My current property manager does not want to deal with a mobile property.

Also the management costs of the tenants, who may not be blessed with secure income, or may not be in a position to automatically deposit the rent on a predictable and reliable schedule.

I am only looking at pure cash flow, as I don't intend to flip the properties.

My head tells me that lower end properties yield much better cash flow numbers, but my gut is not convinced or ready to take on the unknown management costs.

Opinions?