Mobile Home Update

March 7, 2010 · 4 comments

We’ve had a bunch of stuff going on with our mobile home investments over the past two months, but I haven’t had much time to write about our progress, issues, and current status…so here goes:

Mobile Home #1

Our very first mobile home purchase took a turn for the worse last month when our buyer (who we were selling to with financing and had been in the home since October) decided to move out, without giving any notice. We didn’t receive a January mortgage payment, and upon investigating, we found the MH had been abandoned and left in pretty rough condition (actually, they bought it in rough condition, so it wasn’t much worse).

We had realized after we originally purchased that home that we probably didn’t want to be taking on mobile homes that required too much work, and therefore decided that we didn’t want spend a lot of time/energy rehabbing this one once the buyers left. So, we bit the bullet and sold the home to a cash buyer at a low price.

We had purchased the home for $2000, put in $150 in rehab and another $125 in transfer costs and taxes. We had received $1400 in down-payment and loan payments from the original buyer, plus another $750 from the cash buyer who ultimately took it off our hands. After all was said and done, we lost $123.47 on this deal…the first time we’ve ever lost money on a deal! But, it was a good learning experience and I’d rather take the $100 loss than have to deal with that run-down home…

Mobile Home #2

We’ve had our buyers in this home since October, and they are fantastic. They pay their loan payment on-time every month (before the 1st even!), and they’ve been a pleasure to work with in all respects. They still have 14 payments left on their mortgage, and the way things are going, I’m pretty confident they’ll get it paid off. They had been talking about paying off the loan with their tax refund this month, but I don’t think that’s going to happen.

We’re into this property for about $1400 after all costs and expenses, and we expect that if these buyers pay off the note on-schedule, we should make about $2500 in profit, for a bit more than 100% return in 18 months.

Mobile Home #3

These buyers have only been in the home for two months, but have made both their payments on schedule and we haven’t had any issues with them. They have 12 more loan payments before their note is paid off and they own the home.

We’re into this property for about $1300 after purchase costs, rehab, paying off back lot-rent, etc. And we expect that if these buyers pay off the note on-schedule, we should make about $2600 in profit, for nearly a 200% return in just over a year. Not too shabby…

Mobile Home #4

We purchased this home for $1500, put in about $420 in rehab and tax payments, and then turned around and sold it to a cash buyer for $3500. In the week that we held that property, we made $1579.29 in profit on a $1500 purchase, for greater than 100% return in one week.

Mobile Home #5

We purchased this mobile home a few weeks ago for $500 and put in $560 in back lot-rent and rehab costs. We quickly found a buyer who needed financing, and sold it for $3500 ($500 down-payment and $3000 mortgage to be paid over 13 months).

Projected profit on this one (assuming the buyers pay off the mortgage on-schedule) is $2650, for a 250% return in just over a year.

So, overall, I think we’re doing pretty well with the mobile homes. MH #1 was clearly bad purchase (in retrospect), and who knows what adventures we’ll have with the remaining three buyers who we are financing the purchases for; but from a purely financial standpoint, we’ve been able to buy and sell these homes for substantial profit margins, and (so far), the work required to purchase, rehab and resell the homes has been pretty minimal, especially compared to typical single family homes.

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House #17: Inspection Results

March 5, 2010

We had our pre-purchase inspection of The Escher House yesterday, and it looks like we didn’t miss anything in terms of repairs or condition of the property…
The biggest concern I had was a crack in one of the poured foundation walls, and since my inspector is also a structural engineer, I was confident that he [...]

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House #17: The Escher House

March 4, 2010

We just put House #17 under contract yesterday…
It’s a bank-owned foreclosure right just about a mile from my personal residence. It’s a 22 year-old house, and to be honest, I have no idea how to describe the style. It’s a traditional, but also has some characteristics of a split level. Half of [...]

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Traits of a Great Agent

March 3, 2010

As a follow-up to last week’s article on “Should You Get Your Real Estate License,” here is this week’s blog post over at BiggerPockets.com:
Traits of a Great Real Estate Agent
Take a look and feel free to leave comments either here or there…
Enjoy!

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House #13: Appraisal

March 2, 2010

The appraisal for The Poor House came back at our contract price, so assuming no financing surprises, it looks like we’ll be going to closing on this one in the next two weeks…
That said, we almost didn’t get a high-enough appraisal, and it was all my fault. As I mentioned in my article last [...]

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House #16: First Contract

February 28, 2010

We received our first offer on The Probate House over the weekend, and we negotiated a formal contract…
I mentioned on Friday that we had two agents who had potential buyers, and one of those agents came through with an offer on Saturday. In fact, it turns out that the agent wasn’t representing a buyer [...]

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Update for 2/26/2010

February 26, 2010

Here’s an end-of-the-week update on all the houses and other stuff going on…
House #1: The Corn House
We found out that the lease/buyers for this house haven’t been paying off their credit card each month like the credit repair company suggested. They likely would have qualified last month if it had not been for [...]

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Should You Get Your License?

February 24, 2010

I cleaned up an article that I published here a couple months ago and posted it over at BiggerPockets.com for my weekly BP blog post…
Take a look and feel free to leave comments either here or there:
Should You Get Your Real Estate License?
Enjoy!

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Staging #4: Pictures

February 23, 2010

My wife just finished up her fourth staging job for an outside investor. The investor hired her to stage a particularly challenging property — one that certainly benefited from staging — due to its unique layout. It’s a 1950s ranch which has undergone a complete renovation, including removing (and moving!) several walls for [...]

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MH #5: Bought & Sold

February 22, 2010

I’m a couple weeks behind on posting the details of some Mobile Home transactions, but wanted to get this one in here…
We purchased our fifth mobile home about 2 weeks ago. It was a private sale from a woman who was moving out, and she was only asking $500. We paid her full [...]

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