All Forum Posts by: Dan Galvan

Quick Update:

Recap: About an hour and a half, south of San Antonio, I have 2 older mobile homes (2000/2003), in great condition on 1.5 Acres. I own this property free and clear and my initial total investment was ~$75K about 10 years ago. I make a combined total of ~$1500 cash flow every month after taxes, insurance, repairs, and I have an offer on this property right now to sell under an owner finance deal for: 

Owner Finance Price: $175K 

Down Payment: 10% or $17,500 

Term: 15 Years Rate: 8.75% 

Annual Taxes: $675 

Annual Insurance: $1,480 

Estimated Monthly Payment to me: $1,574.13 for 15 years

Why I'm thinking of selling: 

1. Even though these 2 mobile homes are in great shape, they are dated (2000/2003) and I'm not sure what condition they'll be in within the next 15 years.  I do my best to keep them in great shape and have managed to do so since I acquired them 10 or so years ago.

2. Managing properties is taking up a lot of my time.  I have 4 other rentals that I own/manage and want to invest more time on a couple of real estate deals/projects.

Why I'm thinking of keeping as rentals:

1. My overall intent is financial freedom and to one day, leave my corporate job and get out of the rat race.  Cash flow is my intent.

2. Basically the immediate benefit of selling is the down payment I get and can use for other investments, but I wouldn't be in a bad position if I didn't have that down payment.

Just trying to make a final decision to sell/owner finance or just keep as a rental.  Advice, recommendations and/or opinions welcome.  

Dan

@Rachel H.Thank you much for your feedback and all great points. Fortunately, only 1/3 of my riverfront property is in a minor flood zone and rest of it goes uphill and is in the clear.  Will take your recommendations and do more research on comps in the area as well as possible get an appraisal as well.  Since I may owner finance, I definitely do not want to leave any money on the table.

v/r,

Dan

Hello, What would you do?

I have a rural 1.5 acre lot that I divided into 3 lots about 9 years ago.  

Lot 1: 2000 3/2 Mobile Home: Monthly Rent $1000

Lot 2: 2007 2/1 Mobile Home: Monthly Rent $875

Lot 3: Vacant Lot: Monthly Rent $250

Total Rent: $2,215 minus Taxes/Insurance of ~$200 Monthly or $2400 Annually = ~$2015 Monthly Profit/Cash Flow.

Total Initial Investment: ~$75K

Situation: I own this property free/clear but I have been considering selling it to invest into a vacant 7 acre riverfront property that I also own free/clear.  I'm thinking about turning that riverfront property into an RV Park or Cabin/Yurt Air BND Getaway.  A neighbor to the subject 1.5 acre property wants to buy it and I'm considering an owner finance deal.  My issue is that I'm having a problem valuating the property.  The 2 mobile home are older, but in great condition, and not in need of any repairs.  These homes are never vacant and there is a high demand for rentals in this area.  I do own 4 other rentals in this area free/clear and my goal is cashflow, but feel I can grow my cashflow by reinvesting into my 7 acre property.

1. Would you keep the property and just continue to rent it and enjoy the cashflow?

2. How would I determine the value of this property if I decided to owner finance it to a neighbor?

Any other thoughts?

Thank you in advance,

Dan

Hello Joseph, do you ever find any plans that you liked?  

Dan

Thank you all for your inputs and advice!  I'm still at a point in my RE investing journey where I'm still trying to figure things out.  Quick update, after much thought and strategizing, I've decided to move forward with selling the subject property of this post and invest my profits into a small/mid sized RV Park.  I recently sold one of my other Mobile Home/Land Flip Deals.  I had a great return on that property and this flip also assisted me in making a final decision on the subject/current property:

Recent property sold:

Purchase Price and fees: $83,500.86

Rehab Costs: $14,228.89

Sold Price: $164K

Profit after Closing Costs/Fees/Concessions: $44,677.54

Looking forward to planning and building out this RV park.  Thank you all once again for your inputs!

Dan

@Jim Glover I hear you and hoping to get where you're currently at soon.  Truthfully looking for more freedom to spend with my family.  I am a workaholic but would prefer to work hard for my own business and stop making other people richer.  I spent some time a couple of hours from you at Fort Gordon, GA. My quick story..  I have 6 rental properties right now and working on two mobile home flips, all free and clear, while still working my full time corporate job.  Also working on rehabbing a 1950s ranch home on some acreage my family and I plan on moving to by next summer.   Four of my rentals are mobile homes and in my area, they've actually appreciated well as a home/land package.  These properties are also in a more rural area, which more people are looking for down here in central/south Texas.    Both of my current flips are mobiles on land and I purchased them as foreclosures.  One of them I purchased for ~$80K + ~$10K rehab, and closing next week for $164K, after several weeks of the closing being pushed back. The other one, the subject of this thread, I purchased for ~$35K + $5 for rehab, and will be able to sell for ~$110K, per my realtor.  I was looking to owner finance the second, but am now considering other recommendations from this thread and may possibly sell.  Thought is to reinvest my profits, but truthfully I have not made a final decision.  I hate sitting on it as it is ready to go.  Meeting with my accountant next week, who is also a real estate investor, to discuss some strategies.  Guess this is a good problem to have.  I've been reading a lot on BiggerPockets and soaking up as much as I can.  @Naomie Moke @Dan Weber @Ryan Howell @Ken Rishel

Thank you all for your insights and recommendations!! All great points and food for thought.  I was concerned about the tax hit of selling since I’m closing on another similar property this week.  My main goal is to increase my passive cash flow to one day leave my Corp job.  I have a few other rentals but don’t want to deal with more tenants at this point since I do have a full time job and not looking to add management responsibilities to my plate right now.   Seller financing may be the way to go, just need to make sure I’m clear on the Dodd-Frank Act.  

Hello, picked up a nice single wide mobile home on almost two acres for $35K cash a couple of

months ago and after ~$5K in updating and minor repairs, I'm in at about ~$40K.  I could sell for $95-$110K and double my money; however, my main goal is cash flow and I'm really thinking of adding this property to my rentals, but also considering owner financing.  Thoughts??

Wow!  Thank you both for your responses and great feedback.  I have some cash for a down payment, just trying to decide how much I would put down.  I have about $100K cash right now but would prefer not to put all of it down.  If I put $50K down and negotiated with the sellers to bring it down to about $200K, my estimated mortgage payment would be ~$805, leaving me with ~$1445 cash flow.  Per your advice, I would need to also account for Maintenance and Property Management costs...still trying to decide if I'd manage myself or outsource.  I'm currently managing 5 other rental properties I own.  Thanks again!!!!

This ad is for a property that I'm familiar with regarding location/address.

Ad: Older 4 plex, approx 5000sqft, needs updating, selling as is. Selling due to health issues. Asking $259,000 negotiable. Email for details.

Contacted the sellers regarding numbers and this is what they provided:

Rents are 4x950=$3800 Monthly

HOA dues for all 4 units: $580

Owner pays for water: About $400 month

Yearly/Annual taxes are $5362 or about $447 monthly

Property Insurance: $309 per unit, so 309x4=$1,236 per year or $103 per month

Property is currently bank financed so the owners can not provide owner financing.  

Final Numbers:

$3,800 - $580 -$400 - $447 - $103 = $2270 monthly cash flow.  

My thoughts: 

1. Owners really want to sell and according to their ad, are willing to negotiate on price.

2. According to owners, property has no damage, just needs some updating. (will visit property and inspect myself prior to making an offers).

Any thoughts, advice or recommendations would be great!!!!!

Thanks,

Dan