Author Topic: Should I take this deal?  (Read 1596 times)

lexde

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Should I take this deal?
« on: December 30, 2017, 12:43:15 PM »
In short, there is a piece of property that a family member owns that is “not worth the hassle”. I don’t doubt it — it’s a lot in a seedy trailer park full of questionable folks. No trailer there anymore, it was removed, and the owner has defaulted on the property for ~2 years.

In short, if I pay the $900 outstanding taxes, they will title the property to me. It’s worth 10-15k. Not much, but not nothing.

There’s also a title issue, and I will have to bring a quiet title action to get everything fully titled in my name. I’m an attorney so I’m sure I can figure this out. My family member has been paying taxes on it for ~20 years and it’s definitely ours, but quoting title will make conveyance a lot easier.

Overall, it’s $900 for a potential 10-15k return. I could do lease-to-own if I wanted to be a scumbag and foreclose & keep the money if they don’t pay, but that seems like more trouble than it’s worth and I don’t feel comfortable doing it anyway.

I could also buy a sh*tty trailer and collect $400-609/mo on it but risk a tenant destroying the trailer so that’s really not an attractive option.

Thoughts? Family member is willing to just let it go (they have a lot of emotional turmoil wrapped up in the property), so it seems like free money and a decent way to pay down my loans if I can find a buyer.

nick663

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Re: Should I take this deal?
« Reply #1 on: December 30, 2017, 01:06:44 PM »
How much time will it take?  Is it worth it after you factor that in?

Otherwise, seems like an easy win on the sale side.  I'd be tempted to buy a really nice present (or split the profit) with the family member depending on the emotional turmoil just to keep everything fair but that depends on the situation.  I wouldn't get wrapped up in rentals or rent to own as you'd be dealing with basically the lowest economic class of society.

terran

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Re: Should I take this deal?
« Reply #2 on: December 30, 2017, 01:43:42 PM »
It's pretty common for rural property to be almost impossible to sell at any price so you end up with a worthless piece of land that you have to pay taxes on. I wouldn't want to get stuck in a situation like that. I don't know if the same thing happens with trailer park lots. If there's pretty good turnover and you're pretty confident it will sell it seems like it would definitely be worthwhile, especially since you can deal with the legal parts yourself.

marty998

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Re: Should I take this deal?
« Reply #3 on: December 30, 2017, 05:07:33 PM »
Staring a gift horse in the mouth here. Buy it, flip it, move on. Seems an easy win.

Miss Piggy

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Re: Should I take this deal?
« Reply #4 on: December 31, 2017, 10:03:04 AM »
I'm shocked that a lot in a trailer park would be worth anything close to 10K. Is this a super HCOL area?

Beach_Stache

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Re: Should I take this deal?
« Reply #5 on: January 01, 2018, 07:59:20 AM »
For the $900 I think it would be worth the investment just for the learning experience.  If you are a lawyer and can DIY the legal part of it, it will force you to learn something about real estate law, whether it's just the title and sale stuff, transferring the property, renting out to someone, etc.  I wouldn't invest a ton into it, maybe you want to rent it out, maybe just a quick flip.  It may not be worth your time (in terms of what you would make hourly as a lawyer) but it will certainly give you some education and may lead to something else like wanting to flip other properties or becoming a landlord or something else.  Generally you pay for that initial education but if you want to do it again in the future it will help.  My friend just tile'd floors for the first time last week, he made plenty of mistakes and learned a lot and next time he'll be able to do it a lot easier and a lot cheaper.  If you go into this knowing it's a learning experience and set expectations that it may be a headache and you may not profit as much as you think initially, or that you could lose your $900 investment then I would certainly go for it as a potential opportunity and something you might learn a lot from and get interested in for other future opportunities.

Smokystache

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Re: Should I take this deal?
« Reply #6 on: January 01, 2018, 11:57:55 AM »
Seems like really low risk ($900 + your time) and really good potential reward (10k+ and some knowledge).

On a side note, I didn't realize how much money was in owning mobile home parks until I listened to this podcast at SideHustleNation:
https://www.sidehustlenation.com/mobile-home-park-investing/

frompa

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Re: Should I take this deal?
« Reply #7 on: January 01, 2018, 06:10:23 PM »
Run away.  And don't look back.  I was a lawyer until I RE'd last year, and I'd say doing a quiet title action may well be no small thing.  Your time is worth more than the $10-$15k you MIGHT see. Best of luck.