I’m 29, Ive got about $200k and I need to take care of everything before March! I am heading to medical school out of the country, so I want some cash flow and appreciation while I’m gone. I don’t need too much money for the education or anything because it is a third world country and everything is cheap (education there is still good), just need max 2-3k a month, which I’m there through 2 condo rentals and renewal commissions from where I used to work… Just had to let you guys know so you will have the big picture
I’ve been trying to find mhps for a while now big or small. But all of a sudden two that seemed good have finally signed the contract.
I am planning on buying both.
$120k 15 lots 13 are full
Lot rent is $220 city utilities but not sub metered $220 x 13 x 60 = $171,600
$20K down finance 100k 6% 5 year balloon $1000 monthly payments
$240k 30 lots 13 are full Good location next to lake
Lot rent is $300 city utilities but not sub metered $300 x 13 x 60 = $234k
Only 15% down ($36k) and they will carry the note for 10 years fixed at $1200 a month 6%
Obviously, if I buy those two I still have a lot more money to invest in.
I was thinking of doing single family homes(specifically in the texas area, houston and san antonio) that cash flow and potentially can give me a chunk of change if I sell them when I come back in 4-5 years. I was looking into section 8 hispanics in newer homes.
Each home would be worth around $90k and I can use bank financing 25% down payment for each home. If I do 4 homes that would be about $100k out of my pocket.
I’m just letting you all know this to get your opinions on it.
I really want to know what the best course of action would be. What would you do if you were in my shoes?..?
Me personally, if I was leaving the country, I would not even consider purchasing rental properties of any type unless I was a money partner with someone I knew very well and was confident they had extensive experience and fully understood how to manage rental properties.
Rental properties are not a armchair investment, you must commit time and effort even if it is only managing a property manager. And if you do not have experience managing a property manager good luck with that task.
There are far easier investments with lower risk and less time commitment than rental income properties that would be better suited to your situation.
Neither deal sounds bad, assuming that you following the due diligence correctly.
I’m assuming that neither park has any park-owned homes. That will make the management much easier. However, you’ll have to devise a system to overcome your “out-of-the-country” issue, as Greg suggests.
The biggest obstacle you’ll have is that both parks are small and can only pay a little over lot rent for the manager, for the numbers to work. That means that you’ll have to rely on two “greeters”. If you lose one, you do not have anyone in the U.S. to even interview a replacement manager.
I don’t think that leaving the U.S. is the problem, as we know several park owners who don’t live in the U.S. mainland (Canada and Hawaii), but they all own larger parks that do allow them to afford a real manager that has the capability of doing more complicated tasks.
So I guess my biggest reservation are the park sizes and the resulting manager compensation they can afford.
As a new mobile home park owner I think you’re taking a huge risk buying a mobile home park or houses when you’re out of the country and relatively new to property management. There is a definite learning curve to property management, and the mistakes you make in the beginning will be harder to recognize and recover from if you can’t visit your properties once in a while.
There are successful investors who own parks from out of the country. However, I would bet they didn’t start the industry while being preoccupied full time (ie enrolled in medical school) in a different country. If you chose a more passive investment you would likely make higher profits and have less of a headache. There are many skilled operators on this forum that you could invest with and still get exposure to the benefits of mobile home parks, with Frank being the obvious choice.
I’ve gotta agree with what’s been said. You will have a tremendous learning curve once you actually jump in and start operating a mobile home park. I sure did with my first park. And if you are the game for the long-term, you really will want to learn and become better as an operator. I don’t see how you can improve as a park owner being a full-time student outside of the country.
You guys are all right, I have the same concerns that it is going to be complicated and a hassle.
But I still do think it is worth it, I don’t think there is anything better to invest in than real estate that cash flows. I don’t think I’m going to lose the $200k if I invest it and I think it’s definitely better than keeping it in a savings account until I come back. What other avenues would you all recommend investing in? Only do single family homes?..Stocks? Precious metals?..??
They are all tenant owned mobile homes.
Yeah the parks are small unfortunately. My thoughts are should I even buy them because they are so small? Or should I just invest in houses and when I come back cash out and buy a 100+ space park?
Thank you all for your straight up advice. Keep them coming.
and when I come back cash out and buy a 100+ space
park?
I have invested in most types of rental income properties over the years and have yet to find any that are as easy as you seem to indicate. Trust me one bad tenant in a house can potentially bankrupt you. You could end up interrupting your schooling to return home facing a home in foreclosure, tens of thousands in tenant damage or even a lawsuit.
I do not know of a single landlord that has not had nightmare tenants at one time or another and in such cases you can not expect a property manager to have your best interest in mind. Most will place any tenant with a heartbeat not caring how good or bad they may be.
Real estate is not a get rich quick scheme (5 years) and is not without pitfalls and hard work.
My advice would be to find someone on this forum to invest with. As a money partner you will reap the benefits without the headaches.
Being a money partner of someone on this forum could be very good for you.
I also do invest in the stock market. Since the dot com bubble, I’ve become a value investor (and MHPs are certainly a value investment). I’ve been able to earn a little over 16% annually for 13 years now buying classic Warren Buffet style value stocks. Compounding is the 8th wonder of the world!
Magicformulainvesting.com is a terrific website to screen for value. I know it has a ‘hokey’ name, but this is Joel Greenblatt’s website. If you’ve not done so already, you should read ‘The Little Book That Beats The Market’ which will explain value investing and the math behind the website.
I agree with Jefferson, whole heartedly. And a few weeks from now may be an opportunity of a lifetime.
I don’t think the idiots in Washington will allow the debt limit to expire and cause a default. But, if they do, the stock market will fall into the toilet. Within a few days after default equities should be much lower…an excellent “Buy” opportunity. Oh, for sure, they might dorp even lower, after that. One can never buy at the very bottom, or sell at the very top. But courage will pay off.
This is the US of A. And in spite of political “games”, they will eventually (one week? - one month?) extend the debt limit, And over the next few months the market will recover. And those of sturdy heart who took advantage of this manufactured “dip” will prosper, significantly.
Of course, there’s the greater likelyhood that they won’t allow the debt limit to expire. In that case, being in the market without being attentitive might “bite you on the ass”…consider ing that “Uncle Ben” (the fed) has been printing money out of thin air (quantative easing). And when the fed slows this down, the market will drop for a while. And, of course; eventually inflation (due to all this “Free Money”) will awaken, and raise it’s ugly head.