New Mobile Home Investing

[Andrew Barrett]

Investment Info:

Mobile home other investment.

Purchase price: $27,500
Cash invested: $127,500
Sale price: $185,000

Bought the land and put a brand new mobile home on the lot. It was a burnt down home that the owner had to sell (Owner moved in 2014 when it burned - decided to sell it quick in 2020 - I just had to re-grade it, clear a couple trees that grew up since it burned down, permits, permanent foundation so it would meet fha/usda, etc.
Note: I am a mobile home dealer, a realtor, and i have contractors that i work closely with. (how i made enough profit for it to be worth it!+I got the land for cheap!)

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

Mobile Homes fill a void in the market. Avg starter home in my market is $250k-350k for something decent. so $165k-200k helps so many people. Hard to find the land but do-able.

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

It was a coming soon listing and i was searching for land actively for this. I couldn't believe it. The best deal I've seen since then was for $30k and it needed 15k of improvements to the land. But on this deal it was listed for $30k and i offered $25k and we met in the middle at $27,500 because i knew it was a steal either way.

How did you finance this deal?

Cash for the land and then borrowed the rest from an investor I've sold rentals to, I was suppose to be a 4 month project max but it went under contract and fell through 4 times so took closer to 6 months but he didn't ask for much- just to cover the interest he had from taking it from a line of credit for >6months.

How did you add value to the deal?

I am a realtor so i saved 3% on both sides of the deal (3% of 185k) I am also a mobile home dealer so i got the home for 10k-15k less than most people can buy for, and it was a hot time of the year (19 offers) I took the highest fha one first but 3 more fell through before i finally took a really solid offer.

What was the outcome?

I made $45k and then did a 1031 for my first rental.

Lessons learned? Challenges?

I trusted a few people to do multiple jobs that semi overlapped and they pointed fingers when a mistake was made. Now i have a couple people doing most of the work and i actually get a better price for doing it this way and they fix mistakes immediately. I am now on my 3rd deal and hoping to do 5-6 in 2021 and 1031 2-3 of them for rentals.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

I am a realtor and I look for these kinds of deals all the time. I can only do 2 at a time because my personal cash and lender opportunities so i end up selling 3-4 to friends and family and 1 other investor if i am in the middle of 2 deals already.
Andrew Barrett
Pinnacle Real Estate Services Inc (Georgia)