6 lots at $175 per month X 12 =about $12,600 per year in Gross rents not net income. If you figure about 40% for operating costs then you would have a yearly net profit of about $7,560. At that rate the space rent alone would take about 11 1/4 years to amortize your loan. That is asuming that you get a zero interest loan. I would not figure the mobile homes into this equation if they are not worth much.
I wouldn’t pay more than about $35k for a stream of income like this, would you?
Since it wise to estimate all of your costs in advance, I’d check with a plastic surgeon before doing this deal. I would want to know how much a new layer of skin would cost me.
I have now found a six lot “park”. The asking price is $125,000. It has 3 rented lots, 2 at $350, 1 at $325, for a total of $1050/month. The other 3 lots have mobile homes that “need work”. 1 is said to be worthless. I have not seen any of these yet. Taxes are $754.95/year. It is assesed at $35,590. He has just recently dug up all the septic tanks and ran city sewer lines.
After talking to him and finding out more about him, I was able to reduce the asking price to $85,000. He is also willing to take some back. He wants enough of a downpayment to “pay some bills”, then he will take a note on the rest.
I am going to look at this property this week. If I can acquire this property, I plan on selling each trailer to the renter then renting the lot for $175. Monthly payments should average $200. I am going to check out the remaining 3 and decide where to go from there.
Now, here is where I need some more advice. What are some ways to structure this? Is this a good thing to try for someone new in the business? Does my hair look good?(No, forget that one!)Do you have to have some sort of license for owning a trailer park?