How long do I leave this advertised for $150/week?

Rehabbing, Fix and Flip, Rental Properties
1

I have this fifth wheel advertised for $150/week, which includes electricity, water, and (soon) Internet.

I had this place rented out for $150/week last year.

I’ve had a sign up for about a week and an ad on Craigslist for just two days.

How do I know if I’m asking too much?

Three people have expressed interest, but didn’t get back. One of them said it was too small for their two kids.

If something is vacant for even 2.5 weeks, that brings me down to a 95.2% occupancy rate, which is much less than 100%.

2

http://orlando.craigslist.org/apa/5479675422.html

3

I don’t know how you’re calculating your vacancy rate, but I know that if I’m at 100% occupancy my rents are too low. And it’s worse, if somehow I developed a waiting list. Waiting lists are the result of lazy, stupid managers who are throwing my money down the toilet.

There’s several reasons that your unit remains vacant, and I have no idea which, or all of them could be an issue, but here goes…

  1. Ad copy/marketing is not targeted to the right customer.
  2. The unit is not marketable in its present condition.
  3. The rent is too high for what you’re offering, or to whom you are offering it.
  4. The project is not clean. (Goes with #2)
  5. The management doesn’t present itself well, or is too drunk to care. j/k :beer
  6. Application process is onerous/dysfunctional/inconvenient.
  7. It’s snowing/raining/windy/holiday week.
  8. Owners forgot that real estate investing is a marketing business, before it’s anything.
  9. Something else.

A 5% vacancy/credit loss rate reflects the optimum operating temperature of any multifamily project. Not 100%.

Otherwise, you can achieve 100% occupancy, simply by giving free rent. Why not? That’ll guarantee 100% occupancy! Yay!

4

http://jaypalmquist.com/images/00T0T_4b0TzT51Kl3_600x450.jpg

Redstar, forgive my bluntness in advance. I’m only here to help.

But…

There’s a portrait of a model holding up her arm, and then there’s including her armpit.

You’re including the armpit thing.

These shots are dark and dismal, and look desperate. Interior shots always need to be light and bright, even if it means bringing in lighting, just to take picture. At the least, Photoshop some light in there.

  • Consider placing a flower arrangement in there someplace, or simply taking a picture of the kitchen, and forget the forlorn living area.
  • Consider placing a striped slip cover over that sofa, instead of 80’s depression blue.
  • Paint the friggin interior. What’s with all the marks and patches exposed on the wall?
  • What’s with the marks on the carpeting?

This unit is not ready to show.

http://jaypalmquist.com/images/00R0R_4cJV4V20Jnw_600x450.jpg

Really? A picture of a worn-out, semen-stained mattress? That’s what you’re selling? Cover that nasty thing with a nice bedspread, or comforter, or ‘anything’ that hides that episode of Breaking Bad.

**** Close the closet doors, drawers, and cupboards …everywhere. Otherwise, it looks like somebody just left in a hurry …for some no-good reason.

http://jaypalmquist.com/images/94f09892_o.png

Try to create the appearance of someplace they want to live, not settle for.

Here’s an example. And add some decorative (striped) pillow shams. You don’t have to include them in the rent, but you need to present a better value.

http://jaypalmquist.com/images/00N0N_abmT3E9Nxqu_600x450.jpg

Notwithstanding that the lawn is dead, and there’s a black tarp duct taped to the roof, there has to be a better perspective to shoot the exterior from, that includes less surrounding details, instead of a blunt force photo you’d see in a spec brochure.

That is, include/substitute a picture of the huge lawn the kids/family can enjoy, rather than the leak-proned trailer, parked on a broken patio slab.

An old real estate agent’s trick: Dangle a leafy tree branch in front of your camera, so that it shows up in the top left, or top right area of the view finder, when shooting a building. It creates a warmer and more inviting shots of the structure. You can do the same with your shots of the coaches.

I realize that you’re still working on this project, and it is, what it is. However, eventually you’ll want to make everything look uniformly intentional, functional, and appear clean and maintained. That trailer doesn’t do that yet.

The exterior appearance is frankly the most important element of your real estate offer. It’s the first thing people see, and make up their minds over. So, you want to focus on the exterior appearance.

Anyway…

5

Hi,

Redstar buddy you need to close the closet and cabinet doors, use a little lemon pledge to clean the wood work and get a mattress cover for all your mattresses. Clean the place up, use a little paint on those walls (Only paint what was painted already), sand down and stain / varnish the repaired wood work. Get a fire extinguisher bracket for the fire extinguisher, and install a smoke detector in each room / area since your renting this as a unit. (Carbon Monoxide / smoke Detector since you have gas?)

Where is the other bench and table for the dining room table? Get up on the roof and reseal it, if nothing else use a torch down membrane on top and henry’s to seal around vents and edges. Are their drawers and doors missing? If so rebuild replacements to fit and look original. Change all the lighting to LED bulbs so you save on electric bills.

That mattress / box springs shown looks to small for the originally designed space? If your renting this weekly where is the TV?
Use a concrete saw and cut off the last 20 inches of the whole end of that slab (20"x7’) Use some 10X or other concrete coating to cover that hideous stained slab or at least use a pressure washer on every slab to clean them. (Have to clean them before you coat them anyway.)

How about a hand rail along the lock side of those stair steps. Rake and throw out some grass seed to fill in those under grown area’s. Where are the headboard cabinet doors? How about trimming up those palm trees. How about raking the trash and pulling the weeds under your trailers. How about using some upholstery cleaner on that couch. Some carpet cleaner or replace the carpet. Is that an exposed wire next to the fire extinguisher in that photo?

I would put tire covers on every trailer with tires so you don’t sun rot those tires from exposure!!! Better check the air pressure in those tires as they are the primary stability to the trailer!! How about a little landscaping around these trailers and maybe a little patio fencing or something that delineates the patio is part of the home? A potted plant or two against the trailer would help with appeal and add color. What’s hanging down from the fifth wheel on the front? If those are cable’s wind them up tight under the trailer and zip tie them to keep them from looking ugly and from being damaged!!!

Clean the wall paper inside. Clean and caulk the shower / tub and sink area’s. Look for safety hazards. Make sure outlets near water are GFI protected.
Add trim around the AC unit to look finished. Caulk or trim corners, clean up appearance. Just like a car or truck “Detail” the inside.

Replace any broken or missing cabinet doors, you can probable get replacements from the original manufacture or aftermarket through someone like Camping World! Use a little matching stain to gently sand scratches or wear spots and re-color / finish so they look right and appealing.

I think I just discovered how you have so much time to post in this forum as you are obviously not working 50 or 60 hour weeks trying to clean up your units and your little park! Your labor is cheap and you should be leading by example not drinking beer with the local riff raff, you should be getting rid of problems and appealing to a better level of tenant! Weekly rentals are terrible as you will have more vacancies as tenants only have to commit to one week! How do you get a security deposit on what amounts to daily / weekly rental?

This looks more like something a “Crack Head” would rent rather than a mid level manager being relocated to your area market.

How about some cheap but tasteful paintings and art work on the walls. Maybe some uniform window coverings (Blinds, Pulls, Curtains, etc.)

Are you a “Slum Lord”???

               GR
6

Okay, I have to work on curb appeal. Everything is functional.

These aren’t weekly rentals. They are 6 month minimum leases, but I collect by the week.

I did inherit a park full of crack heads.

7

Hi,

 You need to check Florida Landlord / Tenant Law to verify whether you can collect rent weekly and still be in compliance with the rent due date and the tenants legal rights to a grace period before a 3 / 5 day notice is served.

I believe you have to collect once a month and a 3 / 5 day notice can only be posted once a month? Otherwise you fall under the Inn Keepers Laws which are entirely different and which you probable do not want to fall under.

If you want a better class of tenant you need to go to monthly rents because responsible people with good jobs can pay a months rent and security deposit and have no problem with you doing a landlord / tenant check and paying the $35 or $40 dollar cost of that credit / background check.

You also want to get tenants who will do a 6 or 12 month lease! (Preferable 12 months for park stability)

              GR
8

All of my tenants are on 6 months minimum lease. I have to do this to avoid a transient tax. Also, I checked with the Florida Dept. of Business and Professional Regulation and they said I don’t need a “Public Lodging Establishment,” license because the leases are the length that they are.

I will be asking for monthly rent from now on.

I let in one bad tenant who turned the place into a squat house and it looks like the slums until they’re gone. In a park of 8 units, 1 bad tenant will take away from the whole place.

I’m painting all of the units blue, refurnishing as they become available, and hopefully appealing to a higher quality of tenant. I also added a clause to the lease requiring shirts in the common areas.

With all these improvements I’m making, I should expect the next three months to be a loss, but I think it will be worth it in the long run. Thanks for all the good advice.

9

https://www.dropbox.com/s/4lozlw3z9374lch/IMG_20160310_184943297.jpg?dl=0
https://www.dropbox.com/s/z0xfff5qluwn34x/IMG_20160310_184949326.jpg?dl=0
https://www.dropbox.com/s/90t2tj7vgdu5m8a/IMG_20160310_184955932.jpg?dl=0
https://www.dropbox.com/s/z3tr1tnw56os0zv/IMG_20160310_185005142.jpg?dl=0

10

The exterior comes first (or at the same time, at least), then the interior.

The TV flipper amateurs spend gobs and gobs of money over-improving the interiors, assuming buyers only care about the inside.

And worse, they can’t understand why buyers don’t appreciate the gold-embossed counter tops, the mother-of-pearl door knobs, and the Plutonium appliances enough to make an offer. It’s because the outside doesn’t reflect the inside.

Crack some eggs, and upgrade the landscaping, to where it mostly reflects the kinds of clients you want to attract.

This includes making the grass green, planting more trees, and including some privacy fencing.

I have no idea if you have a driveway, or pavement, for these coaches, but there should be some intentional-looking parking areas for cars, etc.

Have you considered selling the coaches to your clients? I like the thought of renting spaces without being responsible for maintaining 25+ year old trailers…

Price: $17,000
Down: $ 2,000
Balance: $15,000 60/mos. amortization, 7%,
Payment: $ 3,552 ( Annual P.I. )

I would initiate the pitch this way…

You:
[i]"Mr. Renter, would you be interested in becoming the ‘owner’ of this coach, instead of a renter?

Renter:
Yes, that sounds interesting.

You:
Great! I just need a down payment of $2k down to deliver the title, and prove you’re committed, and you’ll only pay me $296/mo extra for sixty months, and you’ll be the full owner of this coach, forever. How’s that sound?"

Renter:
Sounds great! My grandma Moses doesn’t want me moving back in with her, and she’ll give me the money for the down payment. When do I sign?"

=====================
Or …what if you turned this into a manufactured home community? Is it feasible to rezone this into an eight-home, manufactured community, instead of an RV park? Just asking.

11

Hi,

 You could sell the units to be removed from the property and then sell the land. The problem with a fixed price is that at least the 5th wheel trailer shown in your photo has an actual NADA value based on it's age and condition. If all the trailers are street legal travel trailers then they all have defined values, if the value of trailers and value of land is less than the original purchase price the property is way upside down!

In light of what I found and wrote in my last post I modified this in light of what was found!

          GR
12

Why would I want to sell the trailers or the land? Then where would my income come from? The coin laundry?

Yes, I have considered making this a manufactured home community, and I think if I did that, zoning would actually allow me to add more than 8 units.

13

You continue renting spaces at whatever market value is. That doesn’t change. You’ve just made it possible for the tenants to own their trailers, so you’re not maintaining them anymore.