MH #3: Sold

December 15, 2009 · 10 comments

We sold mobile home #3 today…

The home was in pretty good shape, so we choose not to do any work to it before trying to find a buyer. We put up a sign on the home and another in a central part of the park, and received about a half dozen calls in just the first couple days.

The first buyer we spoke with couldn’t qualify to live in the park, so we kept looking. The most interested buyer quickly filled out a park application, had very good credit and was ready to put down some money and sign the contracts. So we went with her…

Our total purchase price for this home was $1220 — $500 for the purchase and $720 to cover back lot rent to the mobile home park. We sold the home for about $3700, with about $250 down and $3450 seller financed over the next 16 months.

Ultimately, we’ll make about $3000 on this home ($2500 on the mark-up and about $500 in interest over the life of the loan), assuming the buyer ultimately pays it off.

10 responses to “MH #3: Sold”

  1. Chris Ranney says:

    Very Cool. There are alot of people who lost their home but still have a credit score high enough for everything else such as credit cards and car loans. Owner financing is definitely a win-win as long as you screen them well. I met someone in Florida who was setting up the deed on her owner financed homes with an attorney as a trust. The contract gave the “buyer”, first option on the trust. The only way they could not exercise it was by defaulting on the payments. I believe its called a Intervivos land trust.
    I got a great(free) way to check credit also if you need it. Email me some time. BTW-I may have told you I am moving to Sarasota from Binghamton @ Jan 15. If you’re free, I’d love to buy you lunch.

  2. J Scott says:

    Thanks Chris! I’m going to take you up on that offer for the credit resource…

    As for lunch, that would be great. Unfortunately, Sarasota is about 8 hours from here, so I’m not sure if that will work for you, but if you happen to be passing through, definitely let me know…

  3. Bilgefisher says:

    Please correct me if I am wrong, but these deals sound like a much better way to obtain positive cashflow the a SFR. Although you lack appreciation on the property, it certainly seems like a way to provide extra income with less headache.

  4. J Scott says:

    Hey Bilge –

    So far, it’s been very easy to acquire and resell these properties (though my two partners have done the bulk of the work and deserve most of the credit). The downside of these deals vs SFH rentals is that these will be paid off within about 16-24 months, so the cashflow is good for that period of time, but then it disappears.

    So, it’s not a long-term passive investment…just short-term.

    For long-term passive income, you need to own the mobile home park!

  5. Rob says:

    Is owning a MHP something you’ve started to think about or do you still want to and plan to invest in apartment building?

  6. J Scott says:

    Hey Rob –

    I’m open to any good real estate investment, so if a MHP were to come along that provided a good value, I’d definitely consider it.

    That said, I still very much want to start buying apartment buildings…I’m just waiting for the commercial market to bottom out…

  7. Hakrjak says:

    Also take a look at raw land sales. Sometimes you can buy raw land at distress sales for a couple K, and resell for $20k financed at a high rate for 20 yrs. You can make a lot more than $3k a deal on those types of deals, you can make $50-80k


    – Hakrjak

  8. Rob says:

    Good to hear, I’d like to invest in apartment buildings eventually also as I think this is true investing and long term passive income.
    As of now, I am trying to build my capital by flipping and just got two properties under contract within the last month, one to live in and sell in 1.5-2 years and one to rehab and flip. I should be closing on one today!

    I want to thank you for this blog as I’ve been trying to follow the way you setup your business and copy it. I’ve been reading and the first few months of posts and it really helps me out, so THANKS!

  9. J Scott says:

    Rob –

    Congrats! Let me know how it goes…and if you need any help, shoot me an email…

  10. Bilgefisher says:

    Its interesting you mention MHP. I talked at length to a local gentleman who does value plays with MHP. He buys 34-85 unit parks and will not go into a park unless he can double his investment or appreciate the property 400k within the first 100 days. He has every single MHP (within his range) in the country on a mailer and sends them frequent letters. Its an untapped market that many are afraid to tread into.

    Either way, I enjoy the updates on the lonnie deals. I am interested in even short term cashflow if it provides a way towards investing fulltime.

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