New Manufactured Home on Land/flip

[William Bratrud]

Investment Info:

Mobile home fix & flip investment in Wildomar.

Purchase price: $75,000
Cash invested: $140,000
Sale price: $299,000

We purchased a piece of vacant land that previously had a mobile home on it but it had since been removed. The upside is that all utilities were in place which made development much easier and shortened the development time and cost.

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

We had done a few of these in the past and knew that they had potential to make a profit. This was a fairly hands off investment strategy as most of the heavy lifting would be completed by other contractors and the new home manufacturer. We had another fix and flip going at the same time but wanted to continue to invest our money without needing to invest our time.

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

I found the deal on Zillow and contacted the listing agent directly. We asked her to represent us and she gladly accepted since this meant a double commission for her. The asking price was $87K but we offered $75K cash using the astronomical city fees as our bargaining power to try and get the purchase price down. Initially the seller rejected our offer so we walked away. 3 days later the agent called us and said the seller would agree to $75K.

How did you finance this deal?

Cash from private investors. We offered them a 10% return in 6 months

How did you add value to the deal?

We redeveloped the vacant property with a new 4 bed 2 bath manufactured home. After a ton of back and forth negotiations with the city, they waived over $22K in development impact fees which really helped our bottom line.

What was the outcome?

The home sold in two weeks for $5K more than our original estimate and due to the city fees that were waived we saved an additional $20K from our original budget.

Lessons learned? Challenges?

Everything is negotiable, dont give up the first time someone tells you no. Try again, and again, and again until the door is absolutely shut in your face or you get what your seeking. Persistence is key, sometimes standing your ground is the best option, you never know how things may turn in your favor.