My 1st investment from 2018
Investment Info:
Mobile home buy & hold investment in San Jose.
Purchase price: $55,000
Cash invested: $15,000
My 1st investment. Mobile trailer for short-term rentals, rented on Airbnb. Low maintenance cost and low CapEx. Currently self-managed so the returns and cashflow are great!
What made you interested in investing in this type of deal?
I knew I wanted a trailer later on. So instead of getting it as a liability I got it as an asset. I ran the numbers and they convinced me.
How did you find this deal and how did you negotiate it?
I talked to a couple, which I consider to be experienced investors, they told me how they pull together a similar deal. Once I knew exactly what I wanted, I researched the market, compared new vs. used, holding value and then negotiated hard with two dealers to get a reasonable deal.
How did you finance this deal?
Bank financing for 15 yrs @ 4.5% with $10k down.
How did you add value to the deal?
I added few touches for a comfortable, cozy environment. I provide everything the guests need. As part of initial investment, I got high quality trailer with high-quality bedding sheets, towels, dinnerware, etc.
What was the outcome?
I have bookings whole year. It is very popular, and people like to stay just for the experience. I am very happy with this investment. The cashflow varies per season; on average I get approximately $800 per month to be conservative.
The main outcome of this deal for me was that I started small and it gave me confidence I needed it to go out and look for more deals.
Lessons learned? Challenges?
Lesson 1: Create a space that you feel comfortable living in, so others will find it attractive too.
Lesson 2: This rental is not for everyone. It takes a little bit of creativity to market it and also good screening of the guests.
Lesson 3: Negotiate everything! Back then I negotiated aggressively, but I only focused in the purchase price, I forgot small important details thinking their cost was minimal. Later on all those smaller costs added up. Also, I should have go out of state for pricing
Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?
No