Investment Info:
Mobile home buy & hold investment in Marengo.
Purchase price: $37,000
Cash invested: $20,000
This property was my family's primary residence for 1.5 years. We just relocated 3 months ago. We are currently renovating this 2 bedroom, 1 bathroom single-wide trailer on 11 acres. Once renovation is complete, the plan is to rent the unit. Estimated rental income $650/month. Total estimated expenses $450/month. Estimated cash flow of $200/month. I will update the numbers and add before/after pictures once renovation is complete, and we get it rented.
What made you interested in investing in this type of deal?
Episode 301 brought up the "Just Move" strategy. Just kidding. I intended on renting this property for months before that episode came out.
How did you find this deal and how did you negotiate it?
A friend of mine approached me with this property. He had moved out of the property, and I had just gotten out of the Navy, and needed a place to live. He let me view the property, but I wasn't that interested because the trailer only came with 1 acre. He then told me that the 10 acres behind his property were also for sale, and he put me into contact with the farmer who owned it. I negotiated $15,000 for the 1 acre, and $22,000 for the 10 acres, for a total of $37,000.
How did you finance this deal?
I had issues getting financing initially, partly because it was a trailer, and partly because there were 2 plots of land. For the first year, I carried a personal unsecured loan at 14.75% interest. That hurt. A lot. During that year, I did everything that was required to obtain a mortgage, including merging the 2 properties together. Once I was able to obtain a mortgage, I got an FHA loan with a 3.5% down payment.
How did you add value to the deal?
My friend that owned the property before me added Pergo wood flooring. I have added a water well, painted the cabinets, all of the walls, renovated the bathroom, put down baseboards, replaced trim where it had fallen off, and cleaned up the outside of the property.
What was the outcome?
TBD.
Lessons learned? Challenges?
Getting financing for trailers is tough. There are so many rules for trailers that don't apply to regular homes. Renovating trailers is tough, because the parts for trailers are not the standard sizes for a regular home. A lot of the renovations in this property ended up being custom.
Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?
I worked with Roxane Acup (agent) to buy my new house in Indianapolis, and Eric Kemerer of Milestone Lending to obtain the mortgage for this new house. We closed in 23 days with a VA loan thanks to Eric and Roxane. They are both rockstars.
