Help me with a real estate investment situation

How long can your buyer wait? Maybe give you a little time to find something so you can 1031 exchange it into the new investment if it’s qualifying.

How much is the lot worth?

Location

I would take the $60 (or more) and move to your next investment. The lot likely is not worth $60k and it’s going to cost you money to demo/build or fix up the current structure.

quote:

---

I would take the $60 (or more) and move to your next investment.

---

Same .


I’d probably put half of the $60k in REITs for exposure to real estate, and the other half in VTI or a similar broad market fund .

I wouldn’t touch it personally OP unless you just want out. $8400/ year is 14% of $60k. Not sure what your legit expenses are, but that’s a solid ROI.

Finding real estate that has returns like that is going to be extremely difficult. That’s a large lot for a trailer, have you considered finding a 2nd cheap trailer?

quote:

---

have you considered finding a 2nd cheap trailer?

---

Yes. I'm actually about to purchase a pristine 2003 model for 12k. The issue is local ordinance does not allow trailers older than 10 years to be moved and placed. So I'm keeping it in the trailer park.

Like everything else, used mobile homes are sky high right now.

quote:

---

How much is it going to cost you to demo the trailer and build the house?

---

$3,500

quote:

---

What’s the projected net cash flow on the house vs. the trailer?

---

I assume I could build a 1200-1300 SF house for $100-$110K.
This would include self-contracting and a lot of sweat equity.
(Some framing, pulling my own electrical, insulating, paint, doors & trim, flooring, fixtures, etc.)

quote:

---

How much could you sell the house for once completed?

---

I would think after it's all said and done it could appraise for $165-$180k.

Rent for $1300-1400.

A cash out refi would be best bet for me.
80% of 180,000 (high end), gets me 144k. Net $34k cash.
Note for 30 year mortgage.
$859 + Taxes and Insurance. Call it $950/mo.

Net cash flow = 1300/$1400 - $950 = $350-$450/mo.

If I did not cash out.. Net cash flow is $675-$775/mo

quote:

---

I have a buyer interested right now wanting to write me a check for $60k. The plan would be to take that and roll it into another property purchase. The issue would be finding something else in this market.

---

What kind of investment would you expect to roll it into? Lot? House? Condo?

This market has got to be slowing down as the price increases we've seen the last year are unsustainable and interest rates are rising. Most people aren't able to cash out because they need to buy a new place right away. But you're in a good position to cash out and wait things out for however long you need to.

Your three options are

1. Status quo and remain a landlord
2. Sell trailer for $60k
3. Tear down (possibly sell for a nominal amount) trailer and build on lot.

Obviously your decision is tailored to you.

Option 1: do you want to continue to be the landlord for a depreciating asset with some ongoing exposure?

Option 2: clean break, invest the money in something else

Option 3: Building right now on the lot. Tough ask in this climate. Additionally, separate from the actual construction aspect, that location of your present lot (valued at $35k-ish) is not going to allow you to maximize your potential return on the finished new house. Put another way, if you have your heart set on building a spec house, do Option #2 and take the proceeds and buy a different better-located lot to build the spec house on. It will give you ultimately a better return than building the same house on your uncle's lot.

Good luck.

For me the answer would be to get out of the trailer landlord business and not try to get into building right now but my situation is probably different than yours is.