34% ROI - SHould I purchase? - Posted by Scott

Posted by Don-NY on August 02, 2007 at 06:42:46:

Sounds like a good deal. But if you are looking for cash flow maybe a small (turnaround) park would be a better cash flow investment. As you improve park cash flow goes up and up.

34% ROI - SHould I purchase? - Posted by Scott

Posted by Scott on August 02, 2007 at 05:49:03:

Found two mobiles on land that are for sale together, $35,000. One is rented, the other is not. From the sound of it from the realtor, I could rent both for $1,000 / month. (I know I need to do my due-diliagence on the true rents)

No park fees, utilities, etc. They are in a neighborhood with a number of other mobiles and also pre-fabs.

Thinking about paying cash for it, as I’m looking for cash flow, and $1,000 or even $700 would be great return on the money. Other considerations, would be standard rental houses, duplexes, or a MH park.

Any thoughts on paying cash for these and just sitting on the cash flow? Cash flow is more important to me than appreciation, as cash today, buys more rentals tomorrow,etc.

Thanks for any thoughts, help,

Re: 34% ROI - SHould I purchase? - Posted by MaxC

Posted by MaxC on August 02, 2007 at 09:52:22:

Why not sell the homes on notes and rent the land?

Might look somthing like this:

$600 down
$275/mo for 60 months
$275/mo for lot rental (increase 5% per year)

Times 2 homes equals $1200 down and $1100/mo.

Benefit over straight rental?–much easier management since your buyers own the homes, not you.

Also, if there is room on the land, place additional single wides and repeat.

Re: 34% ROI - SHould I purchase? - Posted by Tony Colella

Posted by Tony Colella on August 02, 2007 at 07:15:13:

Scott, I am not sure but I expect that these include the land as well as the mobile home.

Next I will assume these are single wides. If so they are best approached as cash flow machines but keep in mind the “semi-development” we talk about in our Land/Home Book here. That would make them not only a cash flow vehicle but a means to obtain a lump sum of cash to use for larger deals down the road.

There is more to these deals than ROI. The highest and best use may not be what you see now when you arrive at the property. Even if it is, there are many ways to increase your exit strategies and maximize your return.


Why not get over 70% ROI - Posted by Celeste

Posted by Celeste on August 02, 2007 at 07:03:22:

I,m doing the samething with the same numbers. Buying as many as I can. I have two under contract for 36k and they will rent for $1200 a month, but I can, but I,m not paying all cash. I found a private lender who will do these little cashflow machines with 35% down and he will finance the rest at 10% for 15 years with no ballon. This makes my ROI go up to over 70% Something to think about.