Hey dsbrown those 2 cents you just gave were right on the money. I think the same thing. Good points.
Any of these formulas change with mobil homes? I do wholesaling…have not done a rental yet. Are mobil homes decent rental options?
Mobile homes do make good rentals. They often generate excellent cash flow. However, there are a few things that you should know about mobile homes. They are often more difficult to repair than standard houses. Many of the parts are specifically mobile home parts. In addition, water lines and electrical lines are located under the floor and above the insulation.
Insurance is also an issue. For example, insurance on a double wide is double that of a house.
Finally, it can be difficult to sell mobile homes, especially if they have to be moved. Moving expenses can be high (especially for double wides), and where they can be placed is often restricted by zoning. Additionally, obtaining a loan for mobile homes can be difficult and the credit rating of the people looking at them is often poor. Seller financing is often needed to sell mobile home.
Thanks Mike. Sounds like, all things being equal, a single family or townhouse that cashflows is a better investment than a mobil home. The tough part here in NY, as mentioned by some other folks, is that most decent single-family homes are at least in the upper $100’s, so getting them to cash flow is tough.
Hi morningnewsman. Mike is exactly right. I happen to work on mobile homes and know the ins and outs of them although I do not invest in them because they generally do not appreciate. They are more like cars even though the newer ones are very nice and actually built better than some houses. (what house can you drive down the road at 50mph? Anyway I live in an area in new york. (dutchess county) that is just as you say impossible to create a cash flow without putting down at least 60k and thats on a fix up. The area is one that went up fast and is going to go back down to where it should be. I am seeing signs of it now. A lot of houses on the market (still overpriced) and not being sold. This years forecast in the area for properties is in the neg. for appreciation. For instance A while ago I called up a realtor that owned a property. The company bought it as a foreclosure fixed it up and put it on the market for 220000. It was a very small house. (maybe 700-800 square feet.) I offered 140000 for it the realtor laughed at me and the house sat on the market for 2 years after that until someone overpaid for it. Probably from new york city. To make a long story even longer. I decided to invest in central and upstate new york where prices are low appreciation is steadily on the rise and rents to price ratios are great. Good luck with your investing…
Thanks DWJ. I’m also in Dutchess. You belong to Mid Hudson REIA?
Hi no I dont belong to it. The reason being is because I never wanted to invest in the area because I have always thought that the housing prices have been overpriced and never saw any money in it without coming up with a lot Which I dont have. My goal is starting this with nothing and so far its working out well. I tried some creative stuff but the realtors had absolutely no idea what I was talking about and at the time houses were flying off the market at record pace so I went on a mission to find places that had properties that made sense for cash flow. If I had a lot of money then sure I would have gotten into it in the area because I would not have had to look elsewhere I would have just blindly put down 5 figures without thinking. Fortunately in a way its better I didnt have that kind of money to start because I am learning to invest with no money out of pocket. What part of dutchess do you live in? I live in pleasant valley.
I’m in Poughkeepsie. Do you do rehabs? Rentals mostly?
I just got done with a rehab (a 2 unit) and it is fully rented out. Waiting for the rent checks from the property manager.I actually can do most of the work myself. Its a property total price including work done to it was 39k bought with hard money. It is rented for 1190 per month section 8 tenants. In the process of refinancing it right now to pay off hard money lender pull out some cash and still have a decent size cash flow after the fact. I will post the final numbers on my site after I know them. The bank is slow as molasses and always comes up with something else they want to see.
That’s great. I find quite a few rehabs in Dutchess and Ulster…I then wholesale them to cash buyers who want to do the work and make the big profit. Let me know if you want me to keep my eyes open for something that meets your specifications.
What kind of properties do you usually find? Ballpark pricewise? How far below market?
The homes I get under contract usually need work - and after the work, there is still 30% spread left. For example, I had one late last year that was worth about $280k fixed up. I sold the contract for $121k cash, which included my assignment fee. My buyer has lots of work to do, but there will still be a large spread.
Just referred another one last week.
The most important thing with these kind of homes is that when I sell the contract, my buyer must be a cash buyer.
Nice deal DWJ! $39K for $1190 rent - NICE!
Thanks Mike I am hoping I can find a bunch more of those. I am working on it now. I just recently had to pass one up that only needed a minor clean up for 32k and rented for 1k per month. OUCH! Had to pass it up because I am waiting for a refi to go through on the property mentioned in this post I did for 39k. MOre will come I am sure. Hopefully by then I will be able to take advantage of it.