In July 2013 I found an ad on Craigslist for a 3/2 16×80 that was setup in a park for $15,000. The lady was motivated to sell because she wanted to buy an RV to go travel the country and visit her brother in Washington. I would say the park was a little above average, rural, but safe. Gravel roads, nothing fancy. It did have a very “hands on” park manager. The lot rent was $200 a month. I had an A/C guy inspect the central A/C unit and we couldn’t get it to come on. The carpets in the bedrooms needed replacing, and a few more cosmetic repairs (doors had holes, shower heads needed to be reinstalled, painting). I offered her $10,000. At first she was extremely firm on her price. I kept following up with her and eventually we settled on $11,000.
Over the next week I had $5500 in repairs done to the mobile home, $2600 of that going to the new central A/C unit. I originally put bandit signs advertising $1500 down and $595 a month for 60 months. I also put a craigslist ad up. Within 3 days I had 26 calls. I scheduled a showing on that 3rd day to an elderly couple who were reaching retirement. They saw it and wanted it right away. They told me they wanted to put $15,000 down and make payments of $325 a month for 48 months. I was pretty much in shock that they had this amount of money. The next day they gave me a personal check (which I didn’t believe was real until it cleared the bank). All said and done it took 5 days to actually sell the property. And about 2.5 weeks from purchasing to selling.
The funny thing is we signed the paperwork in the mobile home, then went and sat down with the park owner so the tenant buyer could pay the lot rent (which they paid in full through December 2013). As I was leaving the park driving 40 minutes back home..I get a call stating that there was water leaking around the guest bedroom light fixture. There was an extremely heavy rain that day. The tenant buyer told me she wasn’t so sure about buying the property if the roof was leaking (after we had already signed all the paperwork and I had a $15,000 personal check in my hand!). I assured her that it must have been the rain and wind. The next day I sent a guy out there and it turned out to be a $150 fix. He trimmed back some branches that were near the roof, replaced a couple of shingles and sealed around some area. The tenant buyer was very happy. And I was very happy the check ended up clearing lol!
The very first payment I got from her actually paid me up through December 2013. I expect she will continue to pay through the term.
Total Cost: $16,500 ; Total Profit: $30,600 – $16,500 = $14,100 over 4 years.
Considering I got $15,000 down, I look at it as if I only had $1,500 principle invested. Take $14,100 / $1,500 = 9,400% Return! Divided by 4 years and I calculate a 2,350% return a year!!
Not bad for bumbling along reading a few books and having a healthy dose of good luck on the first deal! To anyone else new, I remember being extremely nervous during the entire process, but pushed through it anyway and pulled the trigger. So if you are reading and this make sense to you, remember..it is truly up to you to take action!
For those interested, here are a few book options that I read to get started:
Also here is a great resource to get bandit signs: