Re: Buying and Renting Mobile Homes - Posted by Scott B
Posted by Scott B on July 12, 2002 at 09:43:29:
I agree about holding and renting. You may disagree with the perfection of my last exit but on my last mobile deal was a combo of the two mothodologies and am quite happy with it.
It is that deal I spoke with you about on the phone several months ago and has come out nicely. To remind you and for others sake it was a 1/3 acre lot in a condo park that I got with a '92 14x80 on it. My purchase price for both was 14k and my cash in the deal is just over 7k. - the rest was owner financed to me with payments of $150/mos which is the payment on my seller’s lot note.
On my exit I leased the lot using Tew’s net lease with option forms. The option price is 24k with a monthly payment of $216 for 30 years @ 10.31% interest. He can either pay $216 for 30 yrs or get new financing on the lot and pay me off. He plans to pay for 30 years. Nice long term rental income.
I leased the mobile with the same type of deal. 14,900k option price, lease payment of $300/mos for 77 months @ 14.75%. He can either pay the length of the lease or pay me off.
Either way its a nice long term cash flow and nice profit. I’ll have a $366/mos cash flow until my $150/mos is paid off in 35 months, then cash flow will go to $516/mos for the next 42 months. When or if he pays off the home, with deductions the whole time, it will go down to $216/mos for 30 years if he ever pays it off. I don’t suspect that will happen. I suspect I will re-lease the home and lot within 5 years to someone else.
This way I have a tenant, title to the home and deed to the lot, and complete control of the properties with all the benefits.