Episode Details
Back to EpisodesHow To Spot A Bad Deal Fast
Description
A broker asks why we’re not interested in a mobile home park deal and then gets mad at the answer. That tension turns into a practical mini-masterclass on real estate underwriting, because the fastest way to avoid a bad investment isn’t more confidence, it’s better math.
We break down a 12-unit mobile home park listed around $975,000 that only brings in about $5,000 a month and has no clear value-add path: no extra land, no room to add units, and tenant-owned homes that limit upside. We translate that rent roll into annual income, apply a conservative expense assumption, and land on an estimated NOI that simply cannot justify the asking price. If you’ve ever wondered how investors size up a listing in minutes, you’ll hear the exact steps.
Then we pressure-test the deal using an amortization schedule, because “creative financing” doesn’t change the fact that debt service plus expenses can crush cash flow. We also share simple filters for mobile home park investing like cap rate targets, the 2% rule for smaller parks, and when a 1.5% rule can make sense with seller financing. The bigger takeaway is mindset: don’t argue, don’t force deals, and don’t pay sticker price when the numbers don’t pencil.
If you want a cleaner way to evaluate real estate deals, subscribe, share this with a friend who’s shopping listings, and leave an honest review so more people can learn to underwrite before they buy.
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