This was a MLS property that we had found in May 2014. It was located in an area we had never invested in but was only 30 minutes from me and 25 minutes to the nearest big city. It also helped that the property was only 5 minutes from the interstate.
Here are the details:
- ‘89 3 bedroom singlewide and ‘66 2 bedroom singlewide on 1 acre of land
- The homes were occupied by the owner and her family
- The 3 bedroom was in good shape with only minor repairs needed and the 2 bedroom wasn’t in bad shape but was small and older
The seller was asking $25k and after some back and forth negotiating, we settled on $19k cash.
We arranged the closing a few months later to accommodate the seller’s moving schedule. Closing went by without a hitch in September 2014.
We felt that without the 2 bedroom home, we still had a decent deal but if we could just get a few hundred dollars per month out of the 2 bedroom home, we’d have a pretty good deal.
Fast forward to 2015, the original 3 bedroom tenants are still with us and have consistently paid on time.
The 2 bedroom home has had a revolving door of tenants. If I’m counting correctly, we’re on family number 4. The second family made quite a few repairs and stayed for about 9 months before they had outgrown the home. Hopefully, the fourth family will stay for a while.
Despite all the turnover in the 2 bedroom, the performance of this property still did well for 2015. Currently, we’re collecting $915 per month between the two homes so if we can maintain something close to this, it will continue to be one of our better-performing properties in terms of cash flow.
Typically, when we have two homes on one piece of property, our intention is to subdivide the property so that we can eventually sell off each piece of land to the homeowner. However, this property didn’t make sense to subdivide because of the older home and the shared utilities (one well and originally just one septic tank although we added a second septic tank earlier this year). The 3 bedroom tenants will eventually have the right to buy the land while the 2 bedroom tenants will be allowed to rent the land so long as we still own the property.
The best thing about this property was that it opened the door to this new area for us. We’ve since bought several properties in this county and plan to continue to do so due to the low prices of housing, strong commercial growth around it, and closeness to a major city.
Stay tuned for more case studies and thanks for reading.