I am considering purchasing a MHP and am wanting to see if what I am looking for is even feasible. So I am reaching out to the professionals. I currently have a rental home that will be paid off in about 7 years and currently break even on it monthly in terms of cash flow. I like the idea of once it is paid off I’ll have an extra $1,700 (today’s rent) of income. But it seems to me though that I could use the equity to work better for me now rather than wait 7 years (I have about $100K equity in the rental house) In an ideal scenario, I’d like to purchase a MHP that does not require a ton of time ( I know it requires work but I do have a full time job) and something that can provide me with immediate positive cash flow after debt service and other costs. My goal is to find a property that can help supplement my income while I still work another 15-20 years or so (I’m 48). Obviously if I do purchase a property and this moves towards additional properties, that is even better. My question then is how feasible is it to buy say for example a 25-50 lot property using some of the above stated equity and find a property that is on the lower maintenance side of the business, i.e. the lot renters own their mobile home, and for me after debt service and other costs,I still can walk away with some reasonable monthly income ($1,000.00???). Does this sound feasible? This may sound vague but I am just starting to even consider this.
Attend Frank’s bootcamp !
The value of a rental income property is based on the rental income. If a property does not cash flow from the purchase date there are only two reasons. The property is overpriced or the market rents are too low.
Investors should not buy any property that does not cash flow unless the cause is one that can easily be corrected once purchased.
There should be no reason you can not find a park that will cash flow if you shop with those guidelines in mind.
As far as your existing property is concerned I would recommend you sell it as it is not a good candidate as a rental income investment property.
I would agree with Greg.
Using your numbers, giving up $1,700 in cash flow per month for 7 years to wait for a POSSIBLE $100,000 equity payoff is the equivalent of return of less than ONE percent. (.9% per year)
And double down on Brian_Z’s advice.
Thanks everyone for the sound advice. I’ve known for a while that my money is better off elsewhere. I’m planning on checking out the bootcamp.