Thoughts On A Property
I'd like to hear some thoughts on a piece of property for sale. The property is a lot with a log cabin trailor in a campground assocation. The lot has running water, sewer, underground electricity, and cable TV. The ownership association has 300 camp sites. It's a recreation community which some use as a summer home, while others use it for weekends. Its a form of camping enhanced with all of the comforts of home. You own the land (a 70 foot diameter which is deeded to you) and share common areas.
The owner has been ill for the past 4-5 years and his site has been unused and not maintained for several years. The property isn't listed for sale but the owner would like to sell. The owner owns the property free and clear. Here are some numbers...
FMV $32,000 - $34,000
Taxes and Dues $1200 / year
Weekly rental $350
# of Rental Weeks Per Year 12-16
I am interested in renting the site weekly (my family could use it when it wasn't rented) and then selling in 3-5 years.
The lot basically needs some TLC and maybe $1000 in materials. Some of the waterfront properties sold for $42,000-$50,000 last year.
I don't want to take out a loan for the lot since it would have to be a RV loan and not a RE loan. What ways could I acquire this property and at what price?
Any thought would be appreciated. Thanks!
well since the guy owns it free n' clear, have him do an owner finance, er have him act as your bank... you lease it from him for 6 yrs with a payment of 200-300/month (which will include Taxes and Insurance) with a ballon payment of his asking price at the end of 6yrs.
rent it for 4 yrs and then L/O or sell for your higher appreciated price.
to cover you monthly payment, jus make sure its rented at least once per month, judging from your stats of rental, or you'll have to make up for it in the summer months or so...
IMO, i would not do this deal, simply because its not absolutely "income generating..." it all really depends on if you get the thing rented every month... your summer months will probably be your peak rental times, but during the winter, it'll sit unless you use it for your personal residents or something.
ok i take that back, maybe i would do this one... depends on location, condition of house, etc... use your better judgement... hopes this helps.
[addsig]
from what you said, if you were able to rent it out all 16 weeks (best case scenario) you'd make about $740/yr assuming a loan for 32k at 8% (don't know mobile rates). this of course wouldn't include the 1000 materials to get it cleaned up nor maintenance. but if you're going to use it for your family in the times not rented, it could be a cheap home - a bit tedious (moving in moving out) but cheap nonetheless.
then of course, the scenario you should use when making the best decision, the worse case - not a full 12 weeks rented and a few tenants who stiffed you or tore your place up - you'd be paying for it a bit. maybe that's not much but is it worth the hassle?
If you can buy the trailer and lot for less than comporable lots have sold for recently you should not have a problem with financing. Be creative,ask for owner terms. If you can rent it out for 16 weeks it should cashflow. You may be able to do a short term lease during the winter to keep the place occupied in bad weather.