Many strategies when it comes to lot splits! #realestate #money #realestateagent #tips #investment

24 Aug 2023 · 1 min

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YouTube video by Steve D Valentine (uploaded Aug 24, 2023) explaining lot-split investment strategies. In the provided excerpt he outlines a case study: he invested about $7,000 in improvements while a tenant rents for $2,000/month, incurs a net cashflow loss initially while paying down principal, completes a lot split and installs two manufactured homes, expects two rents of $2,000 each, projects increased property values (homes appraise around $350,000 each neighborhood estimate), and anticipates creating roughly $160,000 in equity and exiting after refinancing with no remaining cash invested.

Questions this video answers

About $7,000

$2,000 per month

Negative $1,000 per month

$3,000 per month

$100,000 per lot

Chapters

Here is what you don't see, you don't see is this lot is splittable. So the plan right now we put about $7,000 into this, just some paint and carpet while the tenant is living here. And this will rent for $2,000 a month. So I'm going to be negative $1,000 a month, but I'm paying down principal. So we're paying $3,000 a month. We'll have a tenant for 2,000. While the tenant is here, the manufactured homes are being ordered and the lot split is going to be complete while the tenant is placed. So once the lot split is complete, the tenant's leases up, this thing will be scraped and we'll deliver the manufactured homes to brand. So basically, I paid $100,000 per lot. Now I'm going to have two $250,000 homes that are worth about 350 according to the neighborhood. They will both rent for $2,000 a piece. And we created another $160,000 in equity in those properties, which again, all the way back through. I will have no money into any of these investments once they're all done refinanced and I'm out.