Manufactured Home Investing Walk Through, Purchase, and Acquisition Strategy

Welcome back,

In this article I want to share with you a recent manufactured home investment that is now added to our investing portfolio of properties. This deal is not unique or special, likewise I am not a special or an above-average investor. This home is another example of the type of good quality mobile homes you too can invest in with daily effort and correct focused action.

The bold words below are some of the most popular questions/comments we receive about how we find, purchase, and invest in individual mobile homes. The video below walks you through the closing, purchase, and home tour.

Describe the home and land?

This is a 2001 3/2 single-wide manufactured home located on private land in central Texas. The property sits on 1/2 an acre with an average-sized shed and is surrounded by other comparable mobile homes on similar sized lots. We purchased both lots owned by this seller. The front lot is the one with the mobile home sitting on it. The back lot is build-able with the utilities and concrete pad already in place, it is just waiting for another mobile home. Coming soon 🙂

Describe the seller’s situation? 

When the originally contacted us in early June 2013 soon after receive one of our mail pieces. After speaking to this seller over the phone an appointment was set to come see her and see her property. After meeting her, her family, and her home we quickly created offers were made and presented strategically to the seller and family. The time spent at the first meeting with the seller was over 2 hours; we all sat around the kitchen table having drinks and discussing life, family, old memories, and finally the property for sale and the seller’s options.

At this time [June 2013] the seller had just started the process to try and sell her home. The seller wanted to move out of state and really wanted to move, but did not need to move. Her and her family had lived in the home for only 3 years prior to this point. No one in the family was working however family members were receiving military benefits as income.

Although the seller was receptive to some of our terms a compromises was not reached. Based on our figures and due diligence the seller was asking too high of a selling price and wanted too much money to sell. We parted as friends, advised the seller to contact a local Realtor we suggested, and told her to call us should anything change. We began following up and checking in with this seller every few weeks for the next few months.

The seller did list the property with a Realtor for 3 months with no success. Buyers were interested in the home but little financing and poor credit was blamed on these purchasers falling through.

In December 2013, 6 months after originally contacting our company the seller called us back to inform us that she was now ready to sell for our price and terms. We agreed to catch up her 1 month back payment to the loan servicing company and purchase her mobile home subject to the underlying loan. By catching up the seller’s past due payment her credit was kept from harm and we agreed to pay all closing costs. The seller and family were relieved to be selling.

Investor’s Tip: Know your purchase numbers are fair. Know your maximum allowable offer to purchase the seller’s home and stay below this number. Help the seller by giving suggestions of other methods to sell. This seller took 6 months to go from a “No” to a “Yes”. In the mean time stay active with other leads and deals.

How was this property found?

We found the seller by mailing postcards. In our mobile home investing training program we teach about 12 effective methods to attracting motivated sellers. One of these methods is called the Every Door Direct Mail program offered by the United State Postal Service. In short this service mails postcards or letters to every door in a specified mail carriers route. When you know exactly which neighborhoods you would like to target and the exact message you would like the home owners to see this program can be both extremely effective and cheaper than traditional mailings.

What was the out-of-pocket cost to purchase the home?

The lien will continued to be paid on by our company while the Deed was immediately placed in a Trust under our control. The existing loan payoff at the time of sale was $28,018.62, with monthly debt service payments of $516.00 P.I.T.I. (principle, interest, taxes, insurance) with a 9% interest rate.

Closing cost totaled $1,423.00 plus 1 month back payment of $516.00 (paid outside of closing) totaling $1,939.00 to close and own this beautiful mobile home with a half acre of land. No bank qualification was needed.

What were the repair costs?

Minor cleaning and a fresh new carpet came to just under $1,000.

What were the holding cost?

We turned on electric in the home for showings and will pay a neighbor to mow the lawn every 2 weeks. The cost for this monthly is roughly $50 or less, including the minimal electric used.

What is your exit strategy? 

Our exit strategy for this mobile home will be to either:

1. Rent it out for passive monthly income
2. Sell via owner financing with $10,000-$20,000 down at the time of closing. The amount down will determine the monthly payment on the underlying wrapped note. The monthly cash flow to us will be approximately $300-$450 per month for the next 20 plus years unless the new buyer pays us off completely prior to this maturity date.

Investor Remark: We typically do not rent out mobile homes however this manufactured home is a nice area and we may want to hold onto this property as land values increase in the area.

Conclusion:

There are a lot of moving parts to this transaction. Ultimately the fact that less than $2,000 was needed to close this property was beautiful. The seller is very happy with the sale. Since she has moved we have spoken a few times and she is loving her new life across the country.

Investor Remark: What a great business it is to help educate sellers and help them sell their headaches, help provide buyers new homes to live and raise their families, and create better lives for our own families in the meantime.

What about the back empty parcel?

Additionally I want to share with you a video of a mobile home that I looked at that I was hoping would be placed on the back parcel of the property we purchased. Remember we purchased 2 lots in the transaction. Both owned by this same seller. The mobile home in the video below needed to be moved and is for sale for $1,000. This lead was found on Craigslist. This mobile home below is definitely a PASS.

Please forgive the shaky view and mismatched sound. The video was captured with my cell phone and my professional camera and lav microphone were not available.

Love what you do daily,
John Fedro
support@mobilehomeinvesting.net

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