Wholesaling, Mobile Homes, Options and a Roth

I was recently contacted by an investor in the mid-west who was working on putting together an interesting transaction involving a mobile on land that he is wholesaling, but he wanted pick up some future equity after the sale and do the entire transaction in his Roth IRA.

He had a contract on a mobile home/land for $15,000 purchase price (only used a couple hundred dollars to tie up the contract).

This particular property had sold in prior years for $80,000. Sound familiar?? You bet! These deals are everywhere.

His plan was to simply take this good deal, fix it up and create long-term cash flow and upside profits.

However, another investor offered him $10K to assign the deal wholesale- a quick $10K profit for his Roth IRA simply for finding and negotiating the deal.

The question was: “If I give a good deal to this second investor, can I keep an option position of 25% of future profits when the second investor later sells the property.

Answer: “Yes!” It’s all what you negotiate!

And the best part is that all of the profit – the $10K now plus the 25% of the future upside all goes into the Roth IRA and comes out 100% TAX FREE!  The 25% upside future equity is accomplished using a real estate option that gets recorded at the courthouse and paid out when the mobile is sold in the future.

What’s the return on that deal??? Good enough!!

Don’t let these opportunities pass you by!! The deal-making window is open right now, but it won’t last forever!!

 

This is an interesting and creative way to put a mobile on land under contract, wholesale it to another investor for $10k profit now and then retain 25% of the future upside for your Roth IRA which will distribute tax-free.

Jim Ingersoll

Author, "Investing Now"