Is it a good deal? Need advice from experts.My first mobile home

[Julia Mozden]

Hi everyone, I am fairly new, now hunting for my 4th investment home. I only have financed homes and did BRRRR and never purchased with cash before....... Also I have never purchased mobile/manufactured homes therefore need advice. Out Florida market is crazy so i am just trying to grab a deal if it's good.... I think it's good.....They have a mobile home for sale for only 55k in good school district,decent condition with long term tenant in place for 800/month rent( insurance and tax will run me $100 a month). I fell like it will be a decent profit but afraid to give up so much cash thinking it could be a down payment for something better in the future, just looking to see some thoughts on my fellow experts. Thanks in advance....

[Benjamin Aaker]

Hi Julia,

It's hard to get a loan on a mobile home. Many of them have very little value. You are essentially purchasing a box that produces rental income. Are you purchasing the land as well? Without the land you should run away. Sounds like you are planning on paying cash. Sinking that much money into it decreases your return. At $800 a month, less one month for vacancy, 15% for repairs, 8% management (don't forget to pay yourself if self-managing), tax and insurance, you have $5,424 a year or 9.8% cash on cash return. The numbers are decent. The downside is you'll have a hard time pulling the money out of the property for the next investment (e.g. a line of credit or a finance) and will have to rely on the slow build of the annual cash flow.