If it cash flows, do comps matter?

[Steven Westlake]

I found a property, 1.75 acres, it has a log cabin based house built in 1848, and a 1993 mobile home.

The 63 yo owner lives in the mobile. Her now deceased parents used to live in the log cabin house.

The mobile is decent, will need a roof in 3-5 years. It should rent for $850.

The log house is, well, built in 1848 and it shows it. It needs major help or just scraped. But i think it could be rented with a new roof for maybe $750. That well below market, but it’s rough, like not level floors and big rough logs for walls.

Theres a separate 2 car garage with a concrete floor with drain the owner uses to detail boats. That should rent for $200. Fyi it’s so old the walls are oak slabs.

she is asking $150k, so it clearly meets the 1% rule, albeit with a lot of deferred maintenance. Newer nearby houses, and there’s a lot of them on much smaller lots are selling and renting much higher. But this has been on the market for over 1000 days. I don’t think anyone has thought about is a rental, even though there is a brand new duplex across the street. The hoa that surrounds this has boat docks and water front properties. Some selling north of $350k.

And heres the possible icing on the cake, one side is on a major road though this resort area, so that opens up possibly boat storage, retail, splitting it into building lots to sell or build rentals.

I’m just trying to get my head around buying a dumpy old house and a trailer for $150k. The numbers work, and I’m an engineer, just feels like I’m missing something. I think it’s that more than a 1000 days on the market, that’s rattling me.