This property is still on the market and I’ve been rolling ideas around, trying to come up with something to make the place profitable without depleting our cash reserves completely.

So I’m standing at the kitchen sink, washing the icky-ness from the breakfast dishes, see? Minding my own business, see? And like a dufus, I notice this:

The view from my kitchen window…notice anything interesting? Neither did I.

The memory of our neighbor standing by those horses smacked me like a wet mackerel across the chops:

“Sold nannie’s house for $8000… gave the guy 4 months to move the d*** thing, but he never got ’round to it.”

I’ve been looking out that window everyday for a year without actually *seeing* that house.

The possibility of anything coming from this is slim, but the lesson’s clear enough– opportunities are everywhere if you just keep your eyes open.

Popularity: 13% [?]

Tags: real estate investment, Rehab, rent houses

Yesterday, the mister wanted to ride around looking for prospects for his birthday. Gotta love that man

We found this little jewel. In general, we’ve avoided  this area as almost everything requires both well and septic which can be a bugger when replacement time comes. However one neighborhood has community water. It’s beautiful- tons of hardwoods in a rolling setting with a nearby creek that doesn’t flood (much)… trailers to stick-built run  50/50.

 This is probably the worst property there:

From MLS:
 

General Description:

SELLER HAS NEVER LIVED ON PROPERTY/NO DISCLOSURE/ SOLD AS IS WHERE IS/ ALL UTILITIES AVAILIABLE FROM CITY/ SINGLE MOBILE NEED TLC/ GREAT PROPERTY FOR THE PRICE/.60 of an acre according to appraisal district1st Bed: 12X10

2nd Bed: 11X9
Connection: Washer
BedRooms: 2 Bedrooms Down
Heating: Other
Cooling: Window Units

2/2, no carport or garage, built in 1982, asking price 13.5 K

The Good– nice lot, beautiful trees.

The Bad–probably indicative of the overall condition.

A 2/2 trailer in this neighborhood would probably rent for $500- $550/month so it’s worth a look-see.

More to follow.

Popularity: 11% [?]

Tags: REI, rent houses, trailers and land

Here’s something new: 2/1 singlewide trailer, Asking price: $10,000

From MLS: Small unrestricted, commercial/residential lot with mobile on opposite side the street from refinery parking lot. Has many possibilities, Owner will entertain any/all offers.

At this price, just how hideous *is* this place?

No skirt, no stairs… are the utilities hooked up?

Really doesn’t look too bad… the description says the trailer was just moved on the lot.

Hard to tell from the photos, but I’m not seeing a driveway or carport. Anyone working at the plant would want both.

If this is located where I think, then this picture’s been carefully cropped to best advantage.

This one’s going to require a very quick look. The ‘opposite side of the street from the refinery parking lot’ is pretty awful, but the refineries are doing extremely well and a furnished trailer close by could bring in excellent cashflow… perhaps $500/month? And ‘owner will entertain all offers’ is always a good sign.

No address listed, so I’ll have to call our RE agent in the morning before making a drive-by. At this price, its definitely worth investigating.

Popularity: 12% [?]

Tags: cashflow, investment, investment property, real estate, trailer, trailers with land

Ratty Trailers With Stellar Cashflow

Two possible candidates appeared on MLS recently. Neither of these lovely little beauties would make the cut for our regular portfolio, but might be just right for the TTC. Both are in the same neighborhood– a mobile home community with a combination of single/double wides on 1/2 acre lots, community water and sewer, and located in the locally prefered school district.

#1 Asking price: $37K, 3bedrooms/2 bathrooms, no garage or carport, fully fenced, built in ‘72.

From MLS: If you’re looking for quiet, peaceful and secluded area, this property is your answer. Wonderful trees surround this mobile home accented with front porch to enjoy your morning coffee. Large back yard. Two storage buildings. Seller has included 16.5 Craftsman lawnmower to keep your lawn, Low Taxes. $194.00

Living: 17×12
Kitchen: 10×12
1st Bed: 9×12
2nd Bed: 9×12
3rd Bed: 9×12

O-kay… there’s a real problem with that “quiet, peaceful, and secluded” part– this neighborhood is directly across the street from ‘Racetrack’s spacious, paved pit area  (which) holds approximately 400 racing rigs, with additional pit parking available on grass. The Park has a seating capacity of 30,000, with additional grandstand seating brought in during major events to accommodate reserved seat requests.’

Can’t they get in trouble for that kind of hyperbole?

#2 Asking price $38.5K, 3 bedrooms, 2 bathrooms, no garage or carport

From MLS: Home has front and back porches, large ‘eat-in’ kitchen. Refrigerator stays.

Den: 13×13
Kitchen: 11×13
1st Bed: 11×11
2nd Bed: 9×10
3rd Bed: 9×9
Utility Room Desc: Utility Rm In House

If either are still on the market after January, it’ll be worth a look. Rent in this area would be around $700/month with expenses less than $50/month. No one around here will finance an older trailer so a low cash offer might be welcome. There’s no hurry– the list price of foreclosures continues to drop so we might find something nicer if  we hold steady until spring.

Until then, I’ll keep watching the local market.
 

Popularity: 8% [?]

Tags: cash offer, mobile home, mobile homes on land, trailer

At this point, all I’ve got is a tenacious notion somewhere in this vicinity:

• Paying off truck/tractor=good idea
• Investing 30K=much better idea

Reality? I have 4 months to find and acquire an asset producing positive cashflow after expenses of $750/month. But to get from here to there, I’ve got to leave the realms of speculation and see what’s available.

 Idea #1

Buy a mobile home on land. These are readily available in our area and finding something under $30K is definitely possible. To bring in enough cash each month, the trailer would have to be 3 bedrooms, 2 bathrooms with a garage or carport and located in a school district with higher potential rent.  We’re not afraid of mobile homes–lived in one for years. Upkeep is minimal and repairs are inexpensive. However, they simply do not appreciate and we can count on offering owner financing once we’re ready to sell.

Idea #2

Look for a nicer 3/2/2 that will cashflow $750/month with a 30K  down payment. This is possible, but unlikely. So far we’ve never found a single house that will cashflow this much. Checking foreclosures might yield something, but no breath-holding allowed.

Idea #3

Buy 3 smaller homes, each with a 10K down payment that will cashflow at least $250 each. This is a better possibility, but more involved and might take a year to find all three homes… doesn’t exactly fit our timeframe. Finding some way to speed the process could make this work.

Idea #4

Look for a multiplex and use the $30K as a down payment. These rascals are few and far between although I know of one that might work– a six-plex with an unhappy out-of-town owner.

Time to run some numbers and check the listings :-) 

Popularity: 10% [?]

Tags: asset, assets, cashflow, foreclosures, investment, liabilities, liability, mobile homes, real estate

We hate consumer debt.

Besides the mortgage on our personal residence, we try to pay cash for anything that isn’t going to make money for us. So imagine our surprise when we found ourselves owing a combined total of 30K on a Toyota Tundra and a brand new Kubota tractor (she said, tongue planted firmly in cheek)

But unfortunately, dear space pals, there’s no such thing as public transportation in the country and acreage requires a bushhog. So for the last couple of years, we’ve forked out a combined payment of $750/month for these two lovely liabilities. I don’t like it and Mr. Brz keeps forgetting they aren’t paid for, which is rather annoying as he panics anew every time he finds out. Picture someone learning they have cancer on the first and fifteenth of every month and you’ll get the general idea.

So for my own sanity, I’ve undertaken a mission to rid us of this scourge and with some fancy finagling involving bonus checks, income tax refunds and rainy day savings, we should have the cash to pay off the balance by March of ’08.

Sometimes old programming dies hard 

I’ve been licking my proverbial chops at this delightful eventuality for weeks now. My trusty business calculator comes out and I figure and re-figure how lovely the checkbook balance will look sans nasty vehicular payments. I’ve added up the number of payments between now and then (that would be 10 bi-weekly payments on the truck of $175 and 5 tractor payments of $400, the number of years left on each (3 for the truck, 4 for the tractor), added, subtracted, and compounded ad nauseam.

It’s been too much fun.

Then it hits me—We are big-shot real estate investors now. What on earth am I doing using 30K *cash* to pay off liabilities?

Slowly, painfully, my pitiful little brain cells creak through the possibilities of this new way of thinking.

• Old Way:
  • Pay off debts.
  •  Increase monthly cashflow by $750.
  • Pat self on back and exude smugness throughout the next 3-4 years whenever remembering scrimping, saving and eventual triumphant debt-free-ness.

• New Way:
  • Find asset for 30K that generates positive cashflow of $750/month.
  • Pay tractor and truck note using new stream of income.
  • Continue receiving $750/month long after liabilities are paid off (Can anyone say, “College Tuition?”)
  • Feel very silly for almost falling back into old financial management rut.

Will it work? 

Of course the sticking point is finding a $30K asset that will generate $750/month positive cashflow. But just for grins, let’s pretend we can. Here’s how this imaginary scenario could play out.

(By the way—in my Happy Place everything is possible. By starting with this positive outlook, my rational mind is not allowed to edit out any brilliant baby ideas before they have time to grow up into realistic plans that will make us money. Does every idea work? Not on your life… but in my Happy Place, negativity is suspended and everything’s given an equal chance to germinate)

Let’s pretend we find a house for $25K.  (Don’t laugh too hard… we bought our last place for $25.5K)

Let’s say the house needs $5K in repairs for a total of $30K. (What an amazing coincidence! That’s just how much we have to invest~!)

Now, after careful research, we find that said house will rent for $950/month.

Expenses on this place will run $250/month leaving positive cashflow of $750/month.

Okay fine… but here’s where this gets interesting. After 4 years, the truck and tractor are paid for—but the silly little investment house doesn’t know that. It just keeps on generating that same $750/month… year after year after year. The value of the house increases (hopefully), but even if it doesn’t, we can still sell and get our original 30K back.

However, let’s pretend that by the time the truck/tractor notes are history, we have such an overstuffed portfolio of rentals that we decide to sell and carry back owner financing.

Here’s how this could work out:

• Purchase price: $30K

• Selling Price: $60K

• $3000 down payment

• Principle balance of: $57K

• 8% interest, 15 years

• Note: $545/month

• If the buyer pays the entire 15 years, the total received would be:

• $98, 100

• Or, we can just keep the house and keep pulling in the positive cashflow from rents month after month after month… not bad for a 30k initial investment.

So again… will it work? I guess we’ll have to step out of our Happy Place to find out J

If you’d like to see how we’re doing, check back occasionally and click on Tractor/Truck Challenge.

Popularity: 11% [?]

Tags: assets, investing, investment, liabilities, owner finance, real estate