Q.What kind of loan is best for investment?

A.A great way to have extra insurance on your vacation home or rental property is to get a Pick A Payment or Vacancy Protection Loan. This type of loan allows buyer to choose one of four payment options each month: 30-year payment, 15 year payment, interest only payment and minimum payment. Of course, whenever possible 30 year or 15 year payment are best choices for long term. In a pinch, however, you can lower payment and pay off debt or handle other financial issues. This is best way to protect your investment cash flow.

Q.How can I move forward and purchase a second home?

A.Make sure you have thought everything through about this type of purchase. Ask questions, do research, have a plan and be prepared. When you are ready first step is to be pre-approved or pre-qualified before you even begin looking for a home. Find out if you can get a loan and what kind will work best for you. Once you have consulted with a loan officer at a reputable mortgage company you will be well on your way to an investment in your future.

Cash Flow With Mobile Homes

In example given, you'd initially lose about $150/month on house, after your payment, taxes, insurance repairs and other expenses. You'd break even or better with mobile home, and after loan is paid (ten years), you'd have a lot of cash flow, of course. Mobile homes are cheap to maintain. The furnace died in rental I owned, most expensive repair you'll have in a mobile. I replaced it for $1,200, much less than a furnace for a larger home. For $200 you can have a mobile home roof tarred, instead of $5,000 to re-shingle a traditional roof. Windows, plumbing, doors - they're all cheaper.

Property taxes cost less, because they're based on value, and mobile homes have a lower value than stick-built houses. Insurance will cost less too, because you are insuring less value. The only precaution to remember here is to be sure you can get insurance. Very old mobiles may be uninsurable in some areas.

The Bottom Line

Mobiles have their own problems. Renters who have to rent for less sometimes pay late, for example. These issues are minor compared to advantages. Your twenty thousand could buy you two mobile home rentals, with ten thousand down on each, instead of one negative-cash-flow house, for example.

Take an honest look at numbers. The two investors in my town that own most of mobile home rentals always have cash flow, and have millions in equity now. Other investors, following their prejudices, struggle to make money with their "nice" rental homes. So don't automatically pass on those mobile homes for sale when you're looking for a good investment.

Steve Gillman has invested in mobile homes and other real estate for years. To learn more, and to see a photo of a beautiful house (not a mobile) he and his wife bought for $17,500, visit http://www.HousesUnderFiftyThousand.com