Ok this took about as long as expected, about 3 months to sell... Which is about what I read, but mind wrenching non the less.
But I finally got it sold, papers were signed yesterday and I should receive my first payment check by mail in a few days.
This was by no means a slam dunk, this one was a few lessons learned the hard way. Or maybe I had to high of expectations going into this. However, I'm thrilled to have generated cashflow from this deal :)
Here are some final numbers,
Purchase price: $3,100
Remodel Costs: $1,155
Title Transfer: $100
Lot Rent(4 months): $1,400
Power: $300
Total Cost: $6,055
Sold the home for $6,500 with a 5 year term @ 10% interest. The payments are $138 per month so break even is a few years out. There is a good chance I will get cashed out on this deal in 2 months since the buyers are supposed to be receiving some kind of settlement money. If that happens great, I can go find a better deal. If not, great I will continue to collect the checks.
The numbers dont look great for a lonnie deal, but when you look at the alternatives its not to bad. You could take $90k loan, spend $10,000 on a down payment for a $100k house, then spend a few thousand to remodel. Then collect $650 per month and after loan payments and expenses end up with only $100 per month in cashflow. Plus you would have to manage the tenant and deal with that crap. Of course you might get more value later when the price of the home goes up... Could be awhile in this market though.
I learned a few really important lessons with this deal that will make the next one better. This first one I kind of jumped right, but I did it and I didnt loose my shirt.
-If you live in a cold climate, not having central heating is a huge roadblock for buyers. A wood or pellet stove is not enough.(I lost a few potential buyers on this one)
-If you live in an area with high speed internet everywhere and you cant get it at the trailer its another big roadblock(I lost a deal on this one)
-Wait for the killer deals, this one was ok... but I could have bought a doublewide in better condition a few weeks after purchasing this one for $1500. That would have made an awesome deal!
-Try to negotiate lower monthly payments on the lot. I didnt do this and it could have shaved a few hundred off my expenses. The guy that just moved in got $50 less.
-Replace old carpet, especially in the entry way. This is about as important as curb appeal. Doing this could have sold the place a few months ago, instead it cost more in lot rent. It would have been $100 to replace the living room carpet.
-I dont think I will buy another mobile home here in Spokane during the winter, the cost of heating can really ad up when we regularly get down around 0*F. Plus it slows down the glue and paint from drying, floor glue for vinyl wont even set up below 60*F or so.
-If I were to do the first over again I would have paid for a property manager to walk the property with me and help me decide where to spend my money on the remodel. They have priceless experience.
-Oh and I should have listened to a few people and put the home on market right away. I waited until I was done with the remodel, I could have saved a month of paying rent.
