Re: Avg yield survey and avg pmt - Posted by osupsycho (OK)
Posted by osupsycho (OK) on April 30, 2006 at 21:56:43:
Well I have an even smaller group to track but here is what I have gotten so far.
Note 1: 47.5% yield
Note 2: 43.6% yield
Note 3: 55.2% yield
Note 4: 140.7% yield
Note 5: still working but should exceed 200%
So that tells me I am getting better at doing this. The interesting thing is that the first 3 notes have terms of 5 years and the last 2 (the ones with much higher yields) have terms of 3 years. I really prefer the longer terms, even at lower yields, because I won’t have to worry about replacing them as quickly (not including any repos).
As far as the lot rent issue I have seen the same thing and basically stay away from the one park that is at a much higher lot rent because I know I will have to lower my monthly payment. Of course I may be getting a home for free in that park so that will make up for the higher lot rent and lower payment.
As far as the yield issue goes though I rarely consider it. In fact this was the first time that I calculated it out for all of my notes. My bigger concern is just following my business model on my homes. I want to sell the home for at least double what I have in it (everything from repairs and purchase price, to taxes and holding costs). I also want to have whatever I have in it out within the first ten months of note payments (including down payment). Also as I stated earlier I prefer to have my notes go for 60 months. Using this model I have been able to quickly analyze potential deals and see how much money will be needed to get me to the point where I can quit my job.
Just my thoughts,