Mobile Home Rental with Great Returns

[Ryan MacDonald]

Investment Info:

Mobile home buy & hold investment in Schertz.

Purchase price: $6,200
Cash invested: $1

Contributors:
Logan Fullmer

This is a Mobile home on .5 acre lot. The sellers want to stay in the property for an unspecified time and will pay $450/month in rent and will cover any an all repairs with everything on the property. They will also work to clean up the property remove/tear down the existing shed structures that are unsafe.

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

Land value is about $40K for an unrestricted lot with all utilities. Based on our purchase price, even if we remove all items from the property including the existing mobile home, we would still be safe based on lot value and could sell it as is via cash, seller finance or even place another repo mobile home on the property and rent or seller finance for significantly more than we have in it. It also has a secondary septic which I think we can use to place a second mobile to rent for $1K/mo more

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

This was a tax delinquent property. It was in such poor shape (which the seller understood) that if they moved we would have to demo/trash the mobile home and place a new one there along with other cleanup on the property. Overall we agreed to pay off their back taxes and let them stay in the property for an unspecified period of time (we estimate 2-3 years at least) for $450 /month and they cover all repairs and improvements to the property along with their own utilities.

How did you finance this deal?

We used our own private cash.

How did you add value to the deal?

They didn't have the funds to catch up the property so I added value to them by solving their problem of losing the home to tax sale and allowing them to stay put without forcing them to leave.

What was the outcome?

We closed on the purchase and have started the first months lease on the property.

Lessons learned? Challenges?

Learning that not everyone is looking for cash when selling. You just need to focus on solving their problem and we did just that.