An idea I want to run by you guys/gals.

[Jason Cotner]

Hello All,

I have mentioned before that we have a MH in a park that we want to use to get started in REI. We think we can sell it for 23-25k Which is option #1. Option #2, (and this is what I wanted to run by you good people) is to put it on it's own land, put a little money into it to get it looking very nice, and sell it.

So here is my plan, and I know it has to be full of holes so bare with me.

The home is a 1988 3bd/2ba 1269 sq ft In very good condition it is just outdated a bit.

Land= $10,000

Relocate MH= $6,000? I am having a hard time pricing this. We won't be moving it more than 3 miles.

Remodeling= 10,000

Things that have not occurred to me= 10,000

We would like to fund this with hard money. Is this feasible? If so, I am at $36,000. If we were to get the loan for 40,000 and I think 12-15% interest here in CO.....I'll just say 50k to pay back when everything is said and done.

I am probably dreaming here but I would like to sell it at 90k, but even at 75k that would be around 25k in profit (which would be close to what we could get if we just sell it) I don't know... just playing around with this.

Any thoughts or advice would be greatly appreciated!

Thank You

-Jason

[Ben Reese]

Hi Jason,

Several things about your plan jump out at me.

[b]Age: There are a lot of 25 year old MH's that can be bought for less than $23-25K which causes me to wonder if you can truly get this for yours as it sits.

[/b]Your Exit Strategy (AKA, Who is your buyer?): Let's say you move it to the new site. Now you have a 25 year old home on a piece of property. Who is your targeted buyer? Very few (if any) banks are going to touch this meaning this buyer had better be bringing cash to the closing table...And anyone with $75K plus in cash is probably not in the market for an old MH, especially considering $45K or less will buy an absolutely gorgeous single-wide these days. And that new single wide IS financeable.

[b]Hard Money: You may find some family or friend who would help you, but a HM lender is not going to touch this. HM lenders are concerned with loan-to value and will not want to be secured by a depreciated asset that could literally be hauled off in the middle of the night.

[/b]Idea: Your home is likely worth the most it is ever going to be right where it sits. (Unless it's in a hopeless park) That's because it's going to take $4-6K out of your pocket just to move it. And unless you move it to another park you are going to have expensive utility hookups to provide when you get there. So why not rent or sell it where it sits? And before you do, instead of spending $10K why not spend $1500 by cleaning it up, repairing the skirting, putting $100 worth of cheap painted shutters on the exposed side, finding some carpet remnants for the floors, and attacking the interior with a cheap airless paint sprayer and then either: 1) rent it or 2) take a down payment and sell it on terms? Google "Lonnie Dealers" for some ideas on how to do this.

Good Luck!

Ben