Chuckle


#1

Let me offer some comic relief here. There is a property for sale in the next

town at $99,000. It consists of a small house and 4 mobile homes. Without doing any fancy analysis, let us do a simple calculation. The house is worth $50k, maybe $60k on a good day. That leaves $40k for 4 old mobile homes worth $2k each, maybe.

And that is the best case. Over a year ago I was driving by, noticed the sign and stopped to talk to the lady who owned the property. I tactfully mentioned that the homes were a bit dated and she replied that they made them better in the 70s. I could not get an exact figure for the rents. They were in the $250-$300 range but one tenant paid less because he

mowed the lawn and another paid less because he was an over the road truck driver who was mostly gone. The prize came when I inquired about the utilities. All of the homes including the house share 1 (one) septic and 1 (one) water line.

You really need a sense of humor to do real estate.


#2

All homes in a park share the same water line. They may be separately metered, but they share the same “main” water line.

I understand that you are placing no value on the older mobile homes but what is the land worth?

Personally I do not like valueing the home as a stick built “comp” but rather by income. Real estate agents always want to value the the stick built home as if it were in a subdivision on its own land amongst other stick built homes. The reality is that these stick built homes are not. They are simply income producing assets (if you buy them right).

Tony


#3

Call me crazy but this deserves a second look, so many unanswered questions. Is the rent she is charging market rent or below? You may not charge the same as she is. Can you replace the homes with newer better ones? What shape are the homes in? Can you add more homes? Will she finance? Will she lease option? Does the land have a posibility of major value increase in the forseeable future? Just to name a few. The answers to these will cause the value to vary considerably.


#4

The seller is unmotivated. She talked about moving to Florida to live with her daughter but also said that if it does not sell, that is ok. The total area is about 1 acre, bounded by the road, a stream and lots of trees. All of the usable area is already occupied. The water & sewer lines are on 1 meter. It is a small town with little growth, so I do not foresee any significant increase in value. The homes are not too bad for their age, (30+). The rents are a bit low but but she seems to restrict her tenant population to seniors & singles, so that may be all that she can get. I suspect that may have something to do with the single (very old) sewer line. The area is so small that I doubt anyone with kids would even consider living there.