Here’s my situation I have a piece of land out in California that is empty. I was thinking about renting a mobile home on it to generate some cash flow. Is anyone doing this? Also, if I determine that I can’t profitable rent a mobile home on there do you think I should let the property go instead of paying the real estate taxes on it? The land is currently worth somewhere between $4k - $16k and taxes are around $300/year.
Lots of unanswered questions. Do you have utilities already in place and ready to go for this home?? Do you know how much these can cost to move? In NC they cost between 4K-6K to move and setup. I bet it’s more in CA.
I love to rent them, got a bunch of them. The hispanics in this part love them and I have a few tenants that treat the homes as if they owned it. Then again, I have a few that shit in the bathtubs before move out. As they say in WI, it’s a horse a piece. After moving 3 of them, I will never move one again, unless somebody else is paying for the move.
So here is some more info. So the lot is a quarter acre lot in a planned area of this town. There are no homes on this street but the road is paved and their are water lines in the ground. Electricity is as close as the nearest house which is probably 10 or 15 lots away. I would really have to call someone to get an estimate on that. I believe half the town is hispanic and the rest is white. One last thing, the town’s regulations require that if you put a mobile home on the land that it has to be 10 years old or less.
Last year I sold a lot with same basic water and electric that you describe. Since I owned the lot outright, I held the loan on the property with a healthy down payment. I was favorable on the % rate on the terms since they agreed to five year terms.
The buyers are paying all the costs to get the water, electric, septic and manufatured home in place. I have some risk in the deal since they might default but then I end up with the property back and likely the utilities in place. In this case I already know the utilities are in place and the home is on site so should they default I’m in good standing.
If you run this path, be fair and reasonable but make sure you are covered should something go wrong. If you haven’t done a contract on a property before pay for legal advice in drawing up the document.
good luck.
Matt
Sell the mobile home with ‘owner financing’ and rent the lot! That way, you don’t have the regular issues like fixing toilets that a landlord would have. Make sure that the sales contract for the mobile home includes a default provision for ‘on time’ payments for the lot and utilities as well as a provision to keep the home on your lot until the home is paid in full. That way, you will have a built in tenant (for the dirt) for 5 to 8 years while the home is being financed.
Then, sell the note at a large discount to yield 12, 14, 16, or 18%. You can sell it into an IRA too where many will invest those funds before their personal savings. You can profit from the sale of that note above the expenses of acquiring the mobile home. Now you have your mobile home money plus a profit back (so you can repeat the process) or if you need, use those proceeds to pay off the land.
Now you have unincumbered rental income (on dirt) with no maintenance. REPEAT OFTEN. Do that 100 times and you have $15k to 25k per month with a 5% inflation factor built into your formula.
Hope that helps.
Rob in Atlanta
Real Estate Investment Coach
678-887-7242
One thing to consider are the problem are the development fees. If you are in Riverside County for example you end up paying $20,000+ in fees, another $6,000 for the water meter, $5,000 for the septic, and $3,000 in building dept fees. So if you already own the mobile, pay $4,000 to set it up and $2k-$3K for the foundation system… if that cash flows for you and you have similar situation then you are good to go.
Remember, it costs 44 cents to receive a (rent) check by 1st class mail anywhere in the Continental U.S. Land and development costs are much less in other areas away from California. This can be done anywhere!!
Hope this helps.
Rob in Atlanta
HAHA Thanks for the laugh, now get off this forum you troll!!
Rob is 100% correct. :elephant : :shocked
Sell the home and Rent the Land.
You can not go wrong with that advice.