Trailor park success to be or not to be?
Well all I’ve got to say to yaw financial blog readers out there ya hear is that my good old trailor park will be a success becomes I’m going to make it one. I’m a proud trailor park owner. Below is a picture of some of my lots of trailors I own that will generate my future retirement with the right plans to help people and help myself. (Click to enlarge picture)
I’m currently collecting enough cashflow to pay my mortgage, property manager, and all utilities.
What I feel I need to do as a landlord and real estate investor is to sell off my trailors as “home ownership” to the tenants to create long-term tenants that will fix up their own trailors over the time they own it and receive a small tax break on their taxes for interest they paid on their mortgage note. Then I’d receive longer-term tenants leasing the land the trailor is own. If they defaulted on their loan I’d foreclose on them and take back the trailor since I’m the bank.
I’d inflate the prices on the trailors I sell on my land to create low enough payments to be more affordable then they are currently renting them for to create an incentive to buy the home they are in. I’d still pay all utilities (water, gas, electricity, cable) as a full service trailor/rv park, but I would not have to pay for upgrading and repairing the trailors saving me a lot of money. I’d also be able to sell my mortgage notes at a discount to investors to earn back my initial investment of $10,000 and possibly a lot more. My goal is to buy 4 more trailors on the 4 empty lots and sell all 10 for at least $10-15k each collecting my mortgage note cashflow plus my land rent of around $200 a lot. If I could pull this task off with my property manager cooperating and on his game I should be able to pull off around a $3,500 net cashflow.
As easy as it sounds it is not in the least. I do understand great costs will be ahead. I am already redoing the flooring in a couple of trailors and some cosmetics to sell them. I’m also paying for better upkeep of the land they are on for better curb or should I say trailor appeal.
I’m hooking up a coin operated dryer and washer to increase my income. I know the tenants will use them and I’m actually considering building a mini-laundry mat on my property because its a major road and there aren’t any near by. I figure if I invested in at least 5 of each washer and dryer and charged $2.00 a load it could be worth building a small structure just for having people come, park, and wash their clothes, plus having my own tenants using them.
I took out a loan and I’m trying to use the least of it as possible. Unless buying more trailors I don’t want to invest anymore then $20,000 into the property because I want to pay back my loan before the payments are due. At the same time I need to create a master plan to make this trailor park a success in a rather small town in no-where Tennessee. There is a lot of traffic daily near my piece of land and many apartments are near it so a small laundry mat could possibly be a good idea to own. Have any thoughts?
None of these guys is going to be getting a tax break for mortgage interest because with low income and no state income tax in TN they won’t be itemizing on Schedule A.
July 9, 2007 at 10:35 am
But they still pay federal taxes. Everybody is taxed some way and form and claiming your interest paid on your mortgage loan I’d believe would help you in any state if you could use it. Lets just say the interest claim isn’t in their favor at this time, but they are able to obtain a much better job but have horrible credit. Therefor they could claim it with bigger gains. Much better yet me showing they are paying their monthly payments on time it will improve their revolving credit. My mortgage definitely bumped me up some points after making payments for a full year.
Anyway selling them the idea to buy it if they wanted to is better for me since I won’t fix repairs once they own it. If I was able to fully rent each trailor for 6 months it would pay off my initial investment.
July 10, 2007 at 4:14 am
Your heading for doomsville, because you will always have a battle between yourself and your tenants about site neglect, with their own in-house apathy and personal debts eating away at their alleged goodwill towards you. Good tenants are rare.
It sounds good on paper – meaning the: Its your property so this means you will take good care of it element, but take it from me they wont. When it comes to parting with money or spending on improvement/s they will outsmart Warren Buffet & Bill Gates, and Uncle Tom Cobbley and all.
The alternative might be a camp site for tent campers?, who buy a 10 year, or lifetime licence to pitch a tent on your life, and who in theory own / rent a campsite for life?
June 6, 2008 at 3:52 am
this is old news buddy. i sold this pipedream in jan. 07′. on to new things. thanks for your post and refresh my link.
June 6, 2008 at 10:01 am