My Small Mobile Home Park (12 Years Later) - How Much Cash Flow I Actually Made
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- Опубліковано 22 лип 2024
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🎙️ Episode 94 - This video tells the entire story of an investment property I bought in 2009 right in the middle of the Great Recession. Banks weren’t loaning a lot of money at that point - especially for a property with an old 1938-house and 3 old mobile homes.
But the numbers seemed good, so I bought it, figured out a way to get the money, and kept it as a rental ever since. Now 12-years later, I decided to take a deep dive on the cash flow numbers to see how we ACTUALLY did financially. In this video, I share all the details with you so that you can analyze and understand your own rental properties better.
▶️ Next Video: My First Rental Property (17 Years Later) - How Much Cashflow I Actually Made: • My First Rental Proper...
🎬 Topics Covered:
0:59 - Property specs
4:16 - Location and lots
6:06 - Purchase price
7:17 - Financing & cash
9:41 - Income estimate
12:54 - Income & expenses since 2009
19:17 - Internal rate of return in 2020
23:02 - Change in resale value
25:37 - Estimated rents over next 10 years
27:17 - Internal rate of return in 2030
30:44 - Would you buy this deal?!?
🔗 Video Links:
• How to Analyze a Rental Property (No Calculators or Spreadsheets Needed): • How to Analyze a Renta...
• Copy of my spreadsheet from video: www.coachcarson.com/my-mobile...
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Great detail and comparisons. I also appreciate how you kept rent modest for the tenants and wasn't greedy. I think I would buy, remove old homes and replace with new used ones to reduce a lot of the maintenance on those older units. But overall I think you did a great job evaluating the property.
Thanks so much for your honesty and transparency! So refreshing, very helpful!
Hey Coach love the videos and the blog-very interesting to me as we are trying to get into buying mobile homes on their own land as an investment-very helpful seeing the numbers. Thanks so much!
Good luck Michael! Thanks for watching.
Love your videos. Thank you for sharing. Just picked up your book. Trying to get back in to the rental property, but want to it right this time.
Thanks Don! Hope you enjoy the book. Glad you are studying the rental game. It has been a great long term decision for me.
Wow what an eye-opener! Thank you, this was very helpful Coach! Cheers
Glad it was helpful! Thanks for watching.
Awesome, keep these deep dives coming on the individual properties
Glad it was helpful. I'll plan to do more!
Diggin’ da deep dives! Thank you!
Thanks Brooks! They take a bunch of time to prepare, but hoping it is worth it in the end.
Thank you for showing the breakdown by year. Great video.
Thanks for watching!
I'm currently looking into a similar property. It was a shock at the cost of cap x. Thanks for sharing this.
Hey Coach -- really enjoying these deep dives with all the numbers. I would not have done this deal, because mobile homes are just a bit too scary for me...when it comes to my rentals, I appreciate "boring". ;-)
Boring is good for sure! I think mobile homes can work, but the newer ones are better. It's a small thing - but it's nice to have OVERHANGS from the roof. That water kills everything when it runs right down the side of structure.
Great video. Thanks for sharing. I was looking at a similar investment but this really has me thinking twice.
Glad it was helpful! Thx for watching. Good luck.
The mobile homes are pretty scary, maintenance and longevity wise, for me. Interesting video and as always I appreciate the honest analysis. 👍
Yeah, the numbers didn't lie for us. Costs a lot to maintain old mobile homes (at least if you want to give people a decent place to live).
Hey Chad, always love these deep dives. Thanks for being transparent and getting into the weeds. Your clipboard seems cramped sometimes and you have a lot of table space around the clipboard. Just a suggestion, but you might find it useful to go with a larger clipboard/whiteboard to give yourself some more room to write out all the fantastic data you provide. Thanks as always!!
Thanks for the tips! Shopping list: jumbo clipboard 😀🙌
Merely an observation, friend. No need to act on it. I’ll watch/like your content regardless. 😁
Have never seen anything like this; very interesting; don't know if I had kept those old homes but you could do it!
Yeah, it may not have been best decision in hindsight. Not horrible but not great.
Thanks for sharing the info Chad - really good learning. I would not have bought the property (a) old with lots of potential repair issues and (b) low quality so likely trouble with tenants and collections.
You got it. The tenants have been great as time went on. But it was rough early.
Thank you for adding value. Where is link down load for spread sheet Thanks!
Hi Coach: I would not have bought this property knowing that older places always have large expenses and a lot of headaches! thanks for showing this info though.
Thanks for sharing!
Thanks for sharing the numbers. Showing the mistakes you made early on helps me to to be aware of the issue that may pop up as I start investing. I have yet to find my first deal but I hope to within the next year. I'm still learning how to analyze deals and video's like this really help. Thanks.
Very welcome! Glad it was helpful. Good luck on that first deal. It's often the hardest one, but you learn a lot in the process.
I would have done the deal based solely based on its potential value and opportunity to grow its interest to area….. Love how you break how you financed the deal… I’m in the Anderson area …. And very new to mobile home investing … What kind of mobile home do find the most value to invest today. Year, condition, and open ability to move home? Thanks Rod
This was a great video. Thank you. Suggestion - you should explain that the 2nd mortgage was an interest only mortgage (7% x 6350 = $444.50 per year / $37 per month) and that at some point it needs to be paid back in full because it's not amortizing (yes, it's mentioned later on. If I was just starting out, this would be a great learning experience. For more experienced investors, it might not be a large enough return for the amount of time spent.
Good point. I didn't talk as much about the 2nd mortgage. Yes, it was interest only. Since my payments did not pay down any principal, we had to save money in order to pay it all at once. I believe we had a 10 year time frame to do that. This lender was not a professional investor and they did several loans like this at same time. So, 7% on 100,000 for example, makes more of a difference for them.
Appreciate you!
I do enjoy these videos where you analyze your past deal. They are very worthwhile for your viewers. I would not have done the deal, but only because I was always a reluctant landlord. I can deal with newer properties only. And even a newer home can have a rain/water intrusion issue if there's not an overhang over the front door.
Thanks for sharing your thoughts, Sharon!
I just found your channel and enjoyed the candid appraisal and business rationale. I'm a small investor and am rebuilding a small old mobile home for my use in Florida. I've gained a lot of experience on the weaknesses of those older homes and am wondering if in this day and age, you scrap those old mobiles and plat out the parcel for tiny homes which are purchased and maintained by the owners. There would be some costs with running electrical and water lines and pouring the pads but I've seen those go in very quickly out in the oil fields. I'm leaning towards renovating the house to a solid condition and increasing the number of leased units to live off of lot rents. The property would definitely look better too. Opinions?
We have a 43 park owned home mobile home park in Monroe Louisiana (plus 2 lot rents and 15 additional empty lots). If you know of someone who may be interested in buying?
I would be interested possibly. Want to email more details?
Yesssss, I would've done this deal!
Yes - I would like a video on IRR
coming soon!
You got a steal of a deal on those septic installs. Minimum cost for a septic nowadays is $15k.
Long-time customer of my septic guy. So, it was a good deal.
You got hosed. A standard septic is 4500
Hey Coach! Why didn't you use that adjoining empty lot at all? Maybe a few more rented lots for mobile homes? Maybe improve with a newer doublewide or singlewide on foundation and sell off? I really appreciate the numbers analysis!
laziness more than anything! Just leaving money on the table that's available if we would've put a little more work in. Simple as that!
W🙄w! Thanks Coach for your transparency about your investment experience with that property. Did you have any updated pictures of upgrades to the properties? What ever happened to "Bucket-man"?
I'll need to scrounge up some pictures and do an updated video some day. Thanks for asking.
Bucket-man eventually had to move on. We had to remodel his unit so he found another place to live. He was a very nice guy (like to talk a lot!)
I’m glad he found somewhere eles to live. Those type of situation when a property comes with “Live in maintenance man.” With no running water for himself isn’t a great sign, or the fact he didn’t try to buy it himself would of been enough for me. I commend you for being what sounds like a very understanding new owner!
I myself had once just built a (semi-legal) apartment in a garage @ a 12 room air bnb only to have the place sold all the sudden and literally had carpenters from the new owner all the sudden in my kitchen doing finish work while I was still there (sometimes asleep in the bedroom to be woken up to these guys) Anyway my point is I should of been at the table for the deal because as an electrician I was the one that brought the main house around to a legal & safe rental property in exchange for rent. But I do believe I had hit the job so hard and with so many things to do (10k worth of material alone) that I ended up with the short straw there. Hopefully i can find something like you guys found, I’m dying to add equity to something. I’ve started to map out remodeling the small condo I’m renting bc I want to add a ceiling fan and cut in some lights. I already did the bathroom fan with one of those Bluetooth ones that plays your music while you shower 👍Gotta have it! 🪛🪚💡
Question.. on the capital gains tax, could you have done a 1031?
Hi, was the time you invested into this property worth the rate of return on it?
Also, based on knowing the numbers and factoring the age of the properties I probably would not have done the deal. That of course is the beauty of being able to view all your numbers and making a judgment call based on all of that data rather than having to make the actual decision based on projections like you had to as you were doing it in real time.
I really like these videos because they run counter to all the other videos out there of people talking about their deals without giving the true numbers.
Thanks for your feedback on whether you'd do the deal. That's so true about not having perfect information when you start. One thing I've tried to do is use data/experiences from past deals to inform my decisions on future deals. I can say "this deal is sort of like our small mobile home park" and that diagnosis helps me make a better decision. I also hope the same thing is true now for everyone who gets to watch these!
Personally, I think this is the type of info that new investors need. It makes the unknown a lot less scary. And like you said it makes you more informed about future opportunities that you analyze.
I probably would not have done the deal, mostly because even with high potential profit on rents I feel like the clientel would be challenging and not worth the hassle. Currently looking at land to develop my own park with pads where people bring their own trailers. Great info so far though!
Thanks for feedback. People who own their trailers are definitely a different clientele. Althoguh lately we have had pretty good luck finding good tenants for all our units.
Any advice for finding info on developing a park??
5 min in , I am from SC too !!
I would have added septics and rented spaces ,Rv park . Also empty lot expansion.
Being in the Clemson area also, I'd love to land a deal like that. Even with the initial negative cash flow, it still makes sense in the end, to me.
Thanks for the feedback, Ryan. Knowing where we were at time, I am glad we did it too.
@@CoachChadCarson also, I think I would have dropped (demo'ed) the older trailers and brought in some better (still cheap) models. I'm not sure which of the three counties you're in here, but Oconee has fairly lax mobile home laws, from my experience.
@@ryanwilson3483 Good point, Ryan. We probably would have been better off in the end doing exactly hat. We might STILL do it.
@@CoachChadCarson if you need help with it, let me know!
Very informative video. Personally, i wouldnt do the deal. Although your ROI was very good but to me its not enough income to make it worth it considering the repairs and daily headaches. I would like to get into purchasing a mobile home park. I want to own the land but not the mobile homes. Any advice?
Hey Coach, did you ever get around to the IRR video?
yes! here it is: ua-cam.com/video/HJnnpXoR6y0/v-deo.html
Can you add some rental pads? or provide rental parking for 18 wheelers?
Those are good ideas! Thanks. I will have to check about our local zoning rules
Just curious why you never considered selling the homes to the tenants? Was it because the tenants were not interested in that option?
Would have greatly reduced the maintenance costs I would think ?
I’m analyzing a similar deal so curious about that from your perspective :)
good question. It might have been a better play to sell the mobile homes and just rent the lots. In my head i was thinking they were so old that it wouldn't be that in demand, but there's always some price where it make sense. I think the business model of owning and renting lots is fantastic.
Having worked on that house a few times and on similar mobile homes, I would not have done the deal... too much maintenance required.
Hey Norm! You definitely know it well.
would have grabbed this deal no second thoughts!
Good to know! Thanks for feedback
I would sell it Chad. The mobile homes will continue to degrade. Great video!
It's got me thinking:) Thanks for watching.
The maintenance and capital expenses means the properties are worth more for rental income or if you decide to sell. Obviously maintenance has to be kept up.
I agree with you. Some landlords don't do the minimal maintenance. Not sure how they sleep at night.
Lesson: young inexperienced entrepreneurs should have an old gal like me at their elbow with real life structural and maintenance experience (including septic, Murphy's Law) and - to be fair - I need a guy like you with a nerdy command of the numbers.
Lol. You are right! We could have certainly benefited from some real life wisdom in this case. We needed you! And being that nerdy guy is what I'm here for😂
Wow it looks like a lousy investment! I'll keep doing what I'm doing. I will promise to quit being tempted by mobile home parks. I'm getting too old to worry about problems
Movil home sub chicago with nice
Manager
I did not hear anything about property taxes. I'n my area it has been a big factor on profits. Moves me towards mobil homes for cheaper tax dollars.
I shared the property taxes in the section with the spreadsheet. But you're right - mobile home property taxes are lower per amount of rent than houses because their actual value is usually lower. So, that's a big positive. It was the maintenance - not the property taxes - that hurt our bottom line.
Thanks. When I replay this I am sure that I will catch it. Great stuff as always
Chad - it looks like the link to your spreadsheet does not work.
I think it had typo. Should work now. Here's the link in case: www.coachcarson.com/my-mobile-home-park-12-years-later/
Looks to me like most of the repairs could have been done by YOU . You could have saved a lot of money .Who owned the cool old Mustang car that was in the driveway for several years ? Wish you would have partnered with me , i have several rentals in that area and always have ' private money ' to lend . Got any deals ?I have about $150 K to invest .
The only repair I can do personally is tearing stuff up. Lol. I'm much better on the negotiation, finance, selling, etc so we just pay for all the repair work. Not sure which tenant had the Mustang. We probably should have called you on this deal. You may have done a better job than us:)
@@CoachChadCarson tax map 240 is my area . I have 150 to 200 K i need to do something with , got some idea's ?
@@uredskivid none right now but will keep that in mind.
You own the bank, how much was your cash flow in a year If you haven't touched it? And if you don't own, also you have spends how much was your tax refund for your spends?
I would do the deal... There's a lot of forced inflation available there.
Who do you onow that will loan 6k for $37 a mo . I could seriously use a private lender like that .
I wonder how this property would do if you removed the old mobile homes and advertised for lots for tiny homes, which seem to be a newer trend. It seems that owning the homes is not the best way to go; keep the rent about the lot rent, extra parking, etc.
You might be right on this. Interesting idea!
How do you feel about mobile home notes? Do renovated homes even last ten years?
I'd want the note paid off fairly quickly (5 to 10 years) and/or get a big down payment on a mobile home. They can last longer but also can go down in value
What kind of relationship do ya have it? Lol
You lose big-time lot rent is 840 a month forget it
dont pay taxes on the sale. 1031 this thing. Get something newer
Dude bought three trailers and a house for 70 grand? What the hell?
2009 prices. But it'd still sell today for less than $150k
NEVER allow mobile home owners to rent out their mobile homes. Always insist the mobile homes be owner occupied.
We owned these homes. They were't someone else
Why you say this?,
NEVER rent out a mobile home.
That’s funny cause I’ve been told the opposite by people with over 25 years in real estate
I know a guy that rents out 60 mobile homes and makes a killing. Must not be too bad.
@@mradair_county7609movil home park sub chicago
Why not?
Not worth my time for that tiny amount.
mediocre investment.
Doesn't seem worth it don't see how you can make money
The value of the land has grown over time, as has the cash flow. But it had a lot of roller coasters early on!
This is the first video of a deal that makes sense IV ever seen!
Glad to hear it! Thanks for watching.
What about the extra land? More pads to rent?