Posted by Neil on May 05, 2008 at 22:19:01:
I haven't done a lot of research on land/home deals but I'm researching more and more each day and want to order Tony's complete set here soon. I've just been browsing the classifieds and came across one deal that perhaps someone can help me analyze. I'm lacking a lot of prudent information but for the sake of getting started on analyzing these deals hopefully this will work.
The home is an old (mid 60s) double wide and is currently rented, I'm not sure how big of property it's on but I assume it's not greater than 1/4 acre (it's in a manufactured housing subdivision) and I'm assuming it has water/sewer. It's listed at 55K and isn't in the bunnies but is 15-20 miles from the city. I assume you could at worst rent it out for $650/month. What is the general rule of thumb on expenses for these deals. I was using 45% so that would give me a NOI of $358. Now I really don't think I would touch this deal unless I was getting a cap rate of at least 12% which would put my purchase price at about $36,000. Is this the best way to evaluate these deals? Are there better ways to evaluate them. What do most people prefer, selling the home on terms and keeping the land or renting. Also does that old of a home create a problem? Any other information you could provide on these deals would be great. Thanks
- Re: Land/home valuation and expenses Tony Colella 07:53:48 05/06/08 (1)
- Re: Land/home valuation and expenses Neil 18:30:11 05/07/08 (0)