Our net worth now sits at $2,156,341:
The money breaks down like this:
- $755,264: Real estate including one private loan, one trailer park and multiple syndication deals
- $866,077: Stocks and index funds
- $515,000: Home equity, cars and dinosaurs
Mo’ Money, Mo’ Problems?
We have enough money to never have to worry about money. We don’t need any more. However, last weekend, I considered two new investments. The first was a condo and the second was an trailer park elevated home park* (EHP).
Condo (Adventures in Airbnb)
I’ve always thought that owning a place in the mountains would be fun. We could mountain bike in the summer and ride the snow in the winter.
The problems:
- Mountain properties are expensive
- There are recurring costs like association and HOA fees
- A second property is another thing to worry about
A friend recently bought a condo in a small mountain town near us that didn’t break the bank. The studio unit in Granby was far less than $100,000 and it’s only a mile away from a ski area. Our friend fixed up his condo and threw it on Airbnb. He’s doing well with rentals, so we decided to have a look a similar unit in the complex.
Before I tell you what we decided to do, I’ll tell you about the other potential deal we’re considering.
Elevated Home Park #2
We bought an elevated home park earlier this year with two other partners. The investment is doing well. Really well. It’s doing so well in fact that the other partners started looking for another EHP to buy. And they found one.
EHP #2 is a nice property that would cost close to $2,000,000. Similar to EHP #1, the owner has agreed to hold the mortgage. There are many more details and I’ll provide them in a stand-alone post.
The Decision: Mo’ Mental Space
Condo
The unit we looked at would require considerable work:
- It needs to be rehabbed
- We’d have to partially furnish it
- There is the administrative work that we’d have to complete before renting it out
It’s too much right now. We have a lot going on and it would add complication to our lives.
Decision: Just last week, I wrote about the importance of mental space. I’m going to take my own advice and skip the condo. We may reconsider when life settles down.
Elevated Home Park
If we move forward with the EHP, we’ll purchase it with our self-directed solo 401(k). This is a special type of 401(k) that lets you invest in real estate (and other stuff too!). We bought our EHP #1 with the self-directed solo 401(k).
While the self-directed solo 401(k) is a fine way to invest in real estate, one of the rules is that Mrs. 1500 and I cannot be involved in the management of the investment. In the case of the first EHP, the other two partners have taken on more of the management while we take a smaller cut of the profits in return for their services. And this is a good thing. After we vet the deal, there is nothing else to do except watch our money grow.
Decision: We may move forward with EHP #2. We’re still waiting to hear about certain details, but the deal has potential.
Why?
This discussion begs another question:
Dude, why are you bothering with any of this? You have enough money. Hell, you even wrote a post called Enough.
I’m content with life. I don’t need any more ridiculous cars. I’m fine with our primary home. My underwear and socks are in good shape. I just don’t need much else. However, I enjoy earning money:
- I like looking at deals
- I like watching my accounts grow fatter
- I like the thought of giving back in big ways
A reader named Steve left this comment a long time ago:
I can attest to two things: work is more fun when you don’t need the income and it is still fun to earn money even if you don’t need it.
So, I don’t need the money and I have no idea what I’ll do with it, but I’m still going to earn it on my own terms. At the moment, the main term is this:
The investment must not add complication to my life.
I need my time. Once summer is over and the girls are back in school, I’ll have more bandwidth. Right now, I’m going to enjoy the summer.
I still think about the condo every once in a while. Maybe we’ll reconsider later. While it would be work, it would be fun. I could decorate it with dinosaurs. And let me tell you, I’m no stranger to dinosaur themes:
*Readers tell me that trailer park is a derogatory term, so I came up with elevated home park…
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it sure is fun earning money. i enjoy the hell out of it. is there much chance of losing money on the investment? how much % nest egg would be at risk? it would kill me to pay h.o.a. fees. there’s just something about the concept. 100k doesn’t sound too bad, though. and think of the fun your kids could have with huge parties there when they hit that magical age.
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Regarding the condo, I don’t believe there is a lot of downside risk. It’s more of a time issue. And yeah, the HOA fees do suck! However, I do worry about the condo complex coming down on Airbnbs. They have their own rental program where they take 50% of the money, so private rentals are in competition with them.
You guys are killing it, and there’s absolutely no reason to stop investing. Spend what you need and reinvest the rest — that’s your golden ticket!
At this point in your life I totally agree — there’s no point in creating a bunch of work for yourselves rehabbing an Airbnb condo and renting it out. Many assets are easier to manage with similar returns.
This trailer park seems to be a low time commitment investment that’s working out… might as well go with what works!
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I would pass on both. A second EHP will really concentrate your assets in real estate.
Double pass for me. 🙂
We just had a private loan get paid off and have another coming due shortly, so the percentage of money in real estate will not change. However, out of the $750,000 we do have in real estate, about $300,000 will be invested in EHPs. That doesn’t concern me much because it’s still less than 20% of my portfolio.
Hello, Mr. 1500 days
The view in the 1st picture is just awesome.
We have a plan for this kind of elevated home park. After reading your informative article, our excitement is just growing 100 times higher.
Thanks a lot. 🙂
They can be awesome if you can find the right park! There are a lot of moving parts to the investment…
Mo’ money can potentially by mo’ problems, but it depends on what you’re looking for in terms of how much mo’ money you need and how many mo’ Problems you’re willing to potentially handle.
Regarding RE, we’re focusing on some crowdfunding opportunities at the moment but haven’t looked at individual properties yet. I did really enjoy your trailer park though. – Mike
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There are few luxuries a man can want outside of comfortable socks and underwear and a full belly:)
Haha, I like the way you think!
I’m new to investing. What are syndication deals?
Here is a good thread: https://www.biggerpockets.com/blogs/9145/65780-syndication-25-faqs-by-investors
The deals I invest in by unloved apartment complexes. The syndicators fix them up, raise rents and sell 3-8 year later. You get quarterly payments along with a payout at the end.
They aren’t my first choice for real estate investments, but I can’t make the numbers work for rentals in my neck of the Colorado woods.
I’m intrigued by the idea in your post about “giving back in big ways”. From your experience with your first EHP, do you feel that you are making a difference with it?
I do. We’re improving the park (not difficult since it was previously owned by a slumlord). However, I was mostly referring to giving back with the money I’ll earn.
SOunds like a potential great opportunity. I mean you have to continue to keep the mental juices flowing and if this does it for you then I think it is a great idea!
Congrats on preserving your Mental Space!
Knowing when to pass on something, to maintain your brain, is great. There will always be another deal or opportunity on the horizon…
I hope once I’ve got more cash saved in the bank that I am able to find some trustworthy and dependable partners (like the two you are working with) who are content with that type of agreement. I’m so leery on RE but I’d love to be able to contribute some cash and get some return without the hassle of managing it myself. I assume it’s a similar set up to if one buys a house but hires a management company to rent it/do all the jazz, the homeowner really has no high responsibilities to worry about? Do you know? (You are the only person ever that I know who own a trailer park so I’m just super curious). Thanks!
Partners! Yeah, there are very few people I’d do business with. I’m fortunate to be able to work with these two.
And yeah, we have nothing to worry about at all. We read monthly reports and that’s all. Nothing more.
what’s wrong with mobile home park? I get that the homes aren’t easily mobile but that’s traditionally a name that’s been in use.
I do think a vacation condo down the road is a great investment if you can get use out of it. I might suggest a two-bedroom place as a better investment since that can suit families better if you need to rent out. (plus, I’ve been to Air BnBs where the second bedroom was locked by a key code when we weren’t enough people to use additional bedrooms).. I have friends that have purchased homes in vacation communities in the Poconos for such affordable rates that they can afford to keep the home, not rent it out, and actually visit practically every weekend (we’re in the Philly area). If it’s close enough to drive on a frequent basis, look long term at getting a unit that can suit both purposes a) generate money as a quality rental if desired and b) be a decent enough place, size wise and location wise, that you want to and can afford to use it and not rent it out. Having your cake and eating it to, so to speak. That way, if it doesn’t pan out to be the best investment, at least you’re getting great family memories out of it.
EHP .. . Ha, ha. And I have been calling them trailers!
I think you shoulf value add your parks by creating a dinosaur theme. Paint the trailers to look like Dinosaurs, put cool themed signs everywhere. People would pay BIG rent for that! And you (or your more outspoken partner) could franchise those around the country. What do you think??
I am with you on mental space and time. My 17 months abroad didn’t cause me to lose my excitement for making money. But I don’t want the day to day hassles. So, we are also looking at investing with some partners and/or lending.
Investment really pays especially when you get it right. Looking through your portfolio, it is true that you don’t need to worry about money again, all things being equal. Congrats!
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Having underwear and socks that are in decent shape is the minimum definition of “fat FIRE”.
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“The investment must not add complication to my life.”
I love that! It falls in line with what I want out of my endeavors as well. Sounds like you’re taking the right steps to protect your time – which could payoff in even more fun, less complicated investments later on down the line!