Posted by Steven(SC) on September 19, 2003 at 11:44:50:
Posted by Steven(SC) on September 19, 2003 at 11:44:50:
Sell or Rent my mobile/land package???Please Help - Posted by Steven(SC)
Posted by Steven(SC) on September 18, 2003 at 15:52:08:
I am currently living in a 1999 doublewide on an acre of land. We have completely cleared the land and have a 250 ft paved driveway up to the Home. The home now has a block foundation, 2 decks and we have bought a 24 ft above ground pool. We are buying this home owner financed @9.75% for 15 year term. we have 12 1/2 years left to pay. The payments are $662.10 per month. My wife and I were wanting to buy a new home since the interest rates are low. I would like to rent this home and let someone else finish buying it for us. But my Wife has justifiable fears about having two mortgages, She is afraid of the periods when we will have to cover the mortgage. I wouldnt mind trying renting and if it does not work out then sell. Like I said in an earlier post I am the type of guy that needs to be showed that renting is a bad thing. Payoff on the home is $55,000 and comparable homes are selling for $68k to $78k. So we do have some equity. What is the best course of action for a newbie in this situation. I thought that this would be a good starting point for me. All responses negative or positive will be greatly appreciated.
No renting, how about a wrap around? - Posted by John Smith, IV
Posted by John Smith, IV on September 20, 2003 at 23:27:50:
You can do a wrap around deal.
The new owners are more likely to keep the home in good condition than renters would.
You could do a 10 year @10% wrap around and the payments will more than cover your payments. Then you can turn around and pay down your loan with additional payments to principal to pay it off in 10 years and still have money left.
Sell ! - Posted by ScottS(NC)
Posted by ScottS(NC) on September 19, 2003 at 07:12:55:
My personal opinion on this is do not rent out your new doublewide. I love renting out mobiles and the profits are outstanding but I typicaly have about 20k in singlewides and 30k or less in doublewides. You have to much invested for comfort in my opinion. You also will not have much if any positive cash flow. Finally this is not the type of property you want to cut your Landlording teeth on. If I have an old singlewide on a half acre that I have 20k in and a renter makes a mess I can fix it up again for cheap and it will be worth 20k again easily. With newer doublewides they cost more to fix up. The swimming pool is also a big concern as landlord you would be suppling this amenity and there for liable for it as well. Something bad happens in that pool guess who’s insurance will pay, yes yours. If you must move sell this home and rent the proper type of home. Take Care ScottS(NC)
ScottS(NC) couple of questions. long - Posted by Steven(SC)
Posted by Steven(SC) on September 19, 2003 at 08:44:07:
I feel like I want to get into REI so bad that I am trying to make a good deal where there is no deal.
My Wife is skeptical of us getting into real estate,
I list all the pros to try and convince her and she lists all the cons. I guess we kind of cancel each other out. We have talked honestly about it and She is afraid that we will lose money. I sense that she would rather have that money we could invest in a bank, barely making interest to her atleast it would be safe.
She has said that if we do any real estate investing She would rather try the lonnie type deals with only having to invest a few thousand dollars. That way we would own the home not have to borrow any money and She
would not worry so much. I have tried to explain to her that there is still risk with this method. Like if we can’t rent the home we will have to pay the lot rent, and have to cover lot rent each time we have to evict or the renters move. I would rather buy a cheap mobile/land package for $20,000 or so that way we can rent to whom ever we want. After the first of the year we will have the cash to buy this type of deal out right. That way if it does not rent right away we will not have to pay anything ie. lot rent. Although we would be without use of our $20k, but I don’t plan to do a whole lot of deals to start. I thought if we could buy a package like this every year for 5 years or so we would generate a pretty good cash flow and completely own all the properties. With multiple exit strategies if we need to liquidate.
I have read some posts of yours regarding your wife and was wandering if you could give me some advice on how to get my wife involved in this. I know that if I could get her to put 100% of herself into this we could be unstopable. Also if your wife Sandra could
post or email some of her experiences for me to let my wife read I believe She would respond positively to another Wife in the business. I know that this is not easy and there will be hard times but if I can’t get my Wife on board I feel like I would not be able to
succeed. I do not want to do this without her, But I also do not want to pass up an opportunity to greatly
improve our lives now and in the future.
The questions I have for you are
Re: ScottS(NC) couple of questions. long - Posted by Anne_ND
Posted by Anne_ND on September 19, 2003 at 21:05:32:
A potential big mistake for those new to real estate is to pay too much.
Mobile homes are a great way to break in to CREI because so little money (relatively is at stake). You can make mistakes and still come out ahead.
I suggest you aggressively pursue MH deals but put a limit on the price you will pay for your first home and stick to it. Say, $1000 for a home needing very little fix up. Do your homework (get solid estimates, build relationships with PMs, talk to a lot of sellers) and stick to your guns on that purchase price. It may take you a while to find that first deal (or not), but in the process you will get your education.
good luck to you and your wife,
Re: ScottS(NC) couple of questions. long - Posted by ScottS(NC)
Posted by ScottS(NC) on September 19, 2003 at 10:32:42:
First let me say if you do any deals without your wife on board I think it would be a big mistake. Every couple has its doubter, this is healthy this will keep the dreamer’s feet on the ground. My wife has been invaulable to me she does the books,notes paper work ect. Have your wife Email mine at he above address. Sandra(my wife) was the same way initially she was very worried about doing deals with money from our equity line on our home. We bought a small mhp and did a bunch of Lonnie deals and now she gets this big grin when the checks roll in or I hand her some for deposit. Just like anything start slow ONLY DO GOOD DEALS! Don’t EVER force a deal if it doesn’t fit or the profit is slim or the gut says its wrong WALK AWAY. I’ll ask my wife to write a post she may or may not though so you may want to have your wife email her she is more comfortable with that usually.
You must make the first deal a good one to prove to her it works and this is not some scam. I would wait for your 20k then purchase your land home just like you said only I would put half down and try to finance the other half. Your payments would still be very low if you amortize the loan over 15-20 years. That way you could do 2 deals with your 20k instead of one. If one goes vacant the monthly payment would be only like $80 or so(guess) you could skip fast food and save this amount.
I can not stress enough how absolutely vital I think it is that married folks both be on board. That way you both make the decisions good or bad. It is a 50-50 deal.
With 10k now I would buy two of these deals financed as follows. purchase price= 20k 3/2 singlwide on half acre. 4k down 1k closing costs 16k financed payments PITI= roughly $200 per month(guesstimate) 15-20 year amortization. Gross Rent equals $450 per month take $450 security deposit to hold in escrow. After insurance, taxes and debt service we are left with $250 a month positive cash flow. Maintenance costs I will have a seperate account that gets the first 2-3 months of positive cash flow to build up an account of about $600-700 then from that point on $50 a month goes into this account forever. Which now leaves you with $200 free and clear each month while your tenant pays off your mortgage for you. You could do 2 of these deals with your 10k! Several a year and you will soon replace your job income. These deals never payoff. One day when I am tired of renting(if ever) I will Lonnie the homes off and just rent the dirt for my official retirement. HTH, Steven Take Care ScottS(NC)
P.S. I will ask my wife to look for an email from yours or possible post.