So, you must be curious why we recommend investing in these depreciable assets otherwise known as mobile homes combined with our unique rent-to-own strategy.
Here’s 3 Quick Reasons:
This is the main reason for us. In our area we can purchase and repair a property for an average of $20,000 and sell these properties to our tenant-buyers for a nice down payment (usually $1,500) and about $600 per month.
Most of our financing has a 5 year term so our cash flow is limited to about $125 per home (includes principal, interest, property taxes, and insurance) for the first 5 years but are cash flowing well for another 5-10 years after that depending on the length of the rent-to-own.
You should keep in mind that the numbers will probably be different in your area. If the purchase prices in your area for these homes are quite a bit higher, I would bet that the rents are higher as well. If you can’t make the numbers work in your area, then move on to another asset class of real estate investing. There are too many ways to make money in real estate to give up!
Mobile home repairs tend to be less expensive than their site-built counterparts due to tenant/buyer expectations and overall design of the homes.
It also helps that once we have a tenant-buyer in place for a certain home, we do not do any repairs. That means that we do not receive any midnight phone calls to unclog toilets, repair leaky faucets, etc…
So once we purchase, repair, and sell one home, we move onto the next one.
The exception is when we take back a home but so far all of our turnover has resulted in the home being in the same condition or better condition than the day we sold it, allowing us to resell these homes quickly.
We believe that we are truly helping people who would not be able to own their own home any other way.
Making money in any business is important but this motivation to help people in need will keep you going during the rough times.