3 mobile homes and SFH on one lot deal

[Mariah Jeffery]

I know someone who has 65 properties and has offered to sell me any of them at the tax assessed value. For this particular county, the values usually run 10-15% lower than the market value on average, but there is a lot of variability, and some are 20-30% below. These are the ones I'm trying to find. They are all in decent (but not excellent) shape with tenants currently in them.

One of the seller's properties has 3 mobile homes and one single family home on it. Asking price: $94K. Total rents $2,000/month. All utilities paid by tenants. This meets the 2% rule, and property taxes would be pretty low (~$1,950/year). I have asked around about financing, and so far the best I can find is 20% down, 6.75% on a 25-year loan with a 15-year balloon (so I would probably pay it off in 15 years because I don't like to gamble).

I calculate the cash flow to be $388 (not quite $100/door but not bad for a 15 year mortgage; I get $534 if I plug in 25 years.) and the 30-year IRR to be a whopping 36%. This seems like an outstanding deal, but I know very little about mobile homes. Is there anything I should change in my analysis? Is maintenance higher for mobile homes than single families?

Thanks!
MJ

[Just Don]

I believe there was another poster here posting on that very property. If not it was a kissing cousin.

Mobile home renting requires higher irr,,,a lot higher. Alot more risk. If you ever have frozen pipes it gets expensive. Furnaces can go out at the drop of a hat.

Mobile homes wear out pretty quick. Hauling one to the dump isnt fun. Dont ask how I know!!!

IF they are older homes they MAY be at the end of their lifetime now.

Can you put another there when one expires??

Otherwise what you are really buying is the house and the lot and the mobiles better be thrown in free or next to.