Would this make a good rental property?
Would this property be a good deal? I have read a few books about rental property investing, and after analyzing some properties, I would like to know if this one would make a good investment. I believe that similar properties rent for about $1300 in this area (not completely sure). As far as I can tell, this is a good deal. Please let me know your opinion!
Also, would this make a good first investment?
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I didn't run all the numbers on it, but the $650 a month lot rent is probably going to kill the deal.
I didn't run all the numbers on it, but the $650 a month lot rent is probably going to kill the deal.
@Account Closed Welcome to BPThe pictures are excellent all the finishes and appliances look great. But it is essentially a MH in a park and they are charging 650/mo and you have to buy the place. At the end of your mortgage you will have no real investment and probably zero cash flow due to the monthly fees. So it would not be for me.
Also, unless you are completely familiar with the RE buying process, and know what can go wrong, and have done it dozens of times, don't get into an FSBO deal. All the best!
I agree. I also don't like any property with a homeowners association, because it's like having a bunch of strangers in the middle of my investment who can change rules, etc., raise the dues, on and on. In my experience, HOAs aren't worth the money, and they can foreclose on you for unpaid HOA fees. Same with these mobile home park fees.
I did want to mention that I think a new investor could buy a for sale by owner with their own buyer's agent and do the deal through a title company or attorney (depending on how it's done in that state - some use attorneys, etc.). You could offer to pay the buyer agent what they would have received in a buyer's agent commission or work out a deal to split it with the seller.
@Account Closed
As others have mentioned, this deal would be a pass for me. Right off the bat, it doesn't even meet the 1% rule, and once you factor in the lot fees it gets pretty ugly pretty quickly.
Starting your investment strategy off with a bad deal is not a good plan, so no, this would not be a good first investment property.
I see that you are new to BiggerPockets, welcome! Are you familiar with the term house hacking? That is usually the most profitable first form of investing for most people.
#2 Mobile Home Park Investing Contributor
- San Antonio, TX
@Account Closed It all depends on your specifications and what you're looking for on your return on investment. Look at your goals, both long term and short term and your minimum cash flow requirements. Figure out how long the unit will take to fill and what type of clientele the park will attract. Also, be sure you've got a good relationship with the park manager and/or the owner to make sure you're both on the same page if you plan to do business in their community.
Hope that helps!
STOP! Before you do anything with Mobile Home Parks (MHP) listen to the Podcast with John Fedro. He's been on at least once. His main point is if your looking at MHP investing you can generally get in for under $10,000!! Manufactured homes in parks usually go for pennies on the dollar - resale - because as @Filipe Pereira mentioned above, you don't actually own the land and it'll cost between $8k -15K to move the unit. If you don't want to listen to the podcast check out mobilehomeinvesting.net which is John's website which has so much free information.
There is a profit to be made, just probably not this one.