Why you always need multiple exit strategies

[Jennifer Turner]

Investment Info:

Mobile home fix & flip investment.

Purchase price: $6,000
Cash invested: $8,116
Sale price: $65,900

We initially planned to wholesale this deal, but there were existing tenants who had nowhere to go, so we closed on it and allowed them to sign a month-to-month lease w/us until they could find a new place. We intended to either flip it or sell it to a flipper once the tenants vacated, but ended up seller financing the home as-is to end buyers who wanted to fix it up for their own family.

What made you interested in investing in this type of deal?

Low entry cost and a new asset class to try

How did you find this deal and how did you negotiate it?

Seller found us online

How did you finance this deal?

Cash

How did you add value to the deal?

Cleared the land and hired junk removal company to clean out the house

What was the outcome?

$765/month cash flow and 113.11% CoC return for year one . The existing tenants ended up signing a month-to-month lease with us and stayed for 10 months. When they vacated, we cleaned out the house and sold it seller-financed for 10x what we paid for it. We now have monthly income in the form of mortgage payments for the next several years, without the hassle of maintaining the property.

Lessons learned? Challenges?

The only real challenge we faced (aside from the cat odor and fleas in the house) was the fact that the mobile home contractor we were planning to work with to renovate this property passed away unexpectedly before we were able to get started.

[Darnell Lockett]

Hi @Jennifer Turner. Yes its always important to have multiple exit strategies in place. It's great you allowed the existing tenants to do a month to month. Goodwill can go a long way.