Travel trailer or new property?

Question

Hey BP,

My wife and I are currently house hacking a triplex and fixing up each unit at a time as we live in fix. We are doing BRRRR and are thinking about our next move since we are almost done with this triplex.

We want to either purchase a travel trailer that we can live in full time as we continue to buy property to brrrr and park the trailer on the property as we fix them up. OR we want to just deal with living in our rehabs and never being unpacked fully and purchase another house hack to BRRRR.

The cash flow from the current house hack could cover any new Trailer payment but I am torn between taking on another payment and losing that cash flow. This would keep me in my W2 job longer until I can pass my W2 income with our rental cash flow.

Our goal is to be able to move to our properties and live on the lots as we rehab to BRRRR. We would like to do this full time eventually so the trailer would be nice so we can live comfortably unpacked and not in our rehab mess all the time.

Has anyone done something like this before? Really would like to hear how you did it and how it went for you.

David Lee Hall, III · Answer

Don’t have experience on the live in flip side of things, but based on what you have said I would let this 1st property pay for the second property and then let that property buy your RV/trailer. Having 5 or 6 units (if you can get another small multi family) would be a lot more generous for saving for OpEx maintenance, paying yourself or property management, the next house hack, etc. The mobile living unit would be more of a luxury right now (plus if you are doing the renovation work yourself, you aren’t speeding the process, you can only work on one unit at a time). I would look at what a payment for a trailer/RV is monthly, if it is say $500, then try to arrange cash flow so 5 units could pay $100 each month after expenses and savings towards it.

Just my 2 cents, keep rocking it!

Bonnie Low · Answer

It seems like with this Coronavirus situation dragging on, people are going to be getting rid of their luxury items they can no longer afford or have sitting around that could be cashed in. Have you looked for a good used travel trailer? Depending on how much luxury you're looking for, you should be able to pick one up pretty cheap. If you don't yet have kids, now is the time to take on an adventure like this. Seems hard to imagine that you couldn't get more in rent on your house hack than your living expenses in your trailer. Like they say, 'live now like other people won't so later you can live like other people can't.' Good luck to you!

Steve M. · Answer

I just sold my camper.  The total cost was about $21K, paying the minimum payments would end up being $38K I believe.  The monthly expenses were about $79/month for insurance, $210/month for loan payment ($80 towards principle), plus $40/month storage when I wasn't using it (which doesn't apply for you).  I really liked having a camper, and I'll get another one some day, BUT, I'll just pay cash for it.  I would not recommend getting a camper with financing for this purpose.  You'd be better financially doing a live in flip.

Travel trailer or new property?

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