Posted by Chuck (AZ) on July 14, 2001 at 13:41:33:
You need to re-think this whole thing.
What size is this “lot”? If it’s not at least an acre it’s way over priced (regardless of the market), and to be honest at that price it should be close to 3 acres… as it’s rural, not in the city.
I’m big on “buying the dirt” whenever possible, but don’t overpay for it.
Repo’s are priced all over the place, and usually can be had for less. $10k is PROBABLY high for that age,
it depends upon various factors. $6/7k would be more in-line with retail. Wholesale would be $5k, maybe less… and we’re talking no-repo here.
The next issue with this concerns renting… do you really want to be a landlord? Probably not.
As to the cost of moving a home, that also depends upon various factors. I have a fellow here in Tucson who’ll move one within the city limits (no permits required - just hook and drop) for $200. Dealers make a killing on this one.
Now let’s look at your numbers…
$13,000 for “the lot”
$5,500 for improvements to “the lot”
$10,000 for the mobile
Just for comparison… that same money you could buy 5 mobiles (in parks) at $5k each.
You’d have $3,500 left over and could probably get a 6th home for that if you shopped a bit, but we’ll use 5 for our example.
Now let’s say you sell them on contract for $8K each, $500 down, 12.75% interest, for 36 months (balance $7,500). The payment would be $251.85/mo. on each mobile, for a total monthly income of $1,259.25
The earned interest on these 5 notes would be $7,824.45
The cash down payments would total $2,500
The profit on the principal would be $12,500
So on a $25k investment you make a total profit of $22,824.45
You saved $3,500 up front… so that’s $26,324.45 total profit.
You didn’t overpay for the lot, therefore you made no improvements to it, you bought 5 mobiles instead of 1 and had money left over, you didn’t become a landlord.
The WHOLE point of INVESTING in INCOME-PRODUCING property is to get the most bang for your buck. It’s called cash-flow.
I trust I’ve made my point.