About 4 weeks ago an Agent told me a seller had a double wide mobile home for sale. The agent and I meet a at a nearby place and I followed her to the property. We got to the property and looked at it inside and out. I negotiated it and we agreed on $20,000 cash because the shingle roofing was older that 14 years so it needed to be replaced entirely. I calculated it would take $3000 in repair.
The agent typed the agreement and seller and I signed it. When I got to the closing, I brought the check and I got the documents. When I got home for some reason I wanted to look at the property on google maps, and to my surprise it did not showed the same property that the agent had shown me. I immediately called the agent and told about it. The addresses of both property are very similar and are three blocks from each other. The addresses were: 15 Ridgeview Way and the other was 15 Ridgeview Cir.
The agent did some research and called me to say that I was right. I asked her if we could go and look at the property I bought right away, and she agreed. I was hoping that the property I had bought was nicer, newer... and not uglier and in need of more repairs...
Unfortunately, it needed more repairs. I roughly calculated that It would take around $5 grants compared to the $3000 the other was going to take. I was disappointed, but tried not to act that way. I calmly asked the agent what would happen If I did not like this property because it is in a bad shape and I wanted my money back? She said that the seller would refund me 100% because it was not my fault. She said they could not sell the other property that she had shown to me because it belonged to a different owner...(what a situation there...) Before telling her that I wanted my money back I told her that I two hours to make my decision. I did that because I wanted to find a way to fix this deal...
A month earlier, she had shown me a different double wide mobile home. This one was in a very bad shape. It would need around $10,000 in repair, but once fixed I could sell it for around $40K or rent for $650 a month. I called the agent and told her that I was going to give them two option.
I told them that the property that I bought needs a lot more repair that the one I had seen. If I wanted to buy this property I would not offer more than $15k for it. What I suggested is that they include the other mobile home located at 11 Striplin Trail. I said that property is beyond repairs, so I am only interested in the lot. Even though the lot is worth $9k (according to the county records), it will take about $3000 to get rid of it. So I would not offer more than $5k for it. So combining the two properties, the one that I legally bought by mistake and this lot it would even up the $20k that I had paid for the wrong property.
The seller did not accept the offer but asked an addition $25 hundreds for it and that I would not pay any closing costs. After failing to get the seller accept less than the 25 hundreds I decided to go ahed and buy the other lot and not to ask for my refund. Now I have 2 properties. One for 20k and the other for 25 hundreds.
The nicer mobile home that I bought by mistake needs about $3000 in new roofing and is already occupied, generating $650 a month. The total investment in the mobile home was $23000.
After looking at the second property more closely, It can be repaired and it will take around $8k. Mostly it needs new roof and new flooring. All in all, this property is going to cost around 13,000 and once rented it will generate another $650 a month or sell for $35k.
So for $36,000 I was able to get two mobile homes. One already incremented my cash flow in $650/mo and the other one will do the same in 3 months. Once fixed up, combined they will be worth at least $70,000.
When I thought I had made a terrible mistake, I ended up turning it around for a good deal.
And I have also learned the lesson. Always ask for the correct address of the property before you go and look at it and make sure it is the same address described in the settlement documents.
I'd like to know what other people would have done or what they think about this deal.
Quite honestly my mind is a bit blown. The agent showed you a house, wrote up the paperwork for a completely different place, and you closed on it?!
I'm glad you were able to turn that around because the way I read it you missed one of the most important steps which is to check the paperwork before you sign it!
The next thing is that what that agent did is borderline illegal (if not outright). They could lose their license for misrepresentation. I find it highly suspicious that the agent showed you the property at 15 Ridgeview Way but was then able to sell you 15 Ridgeview Ct. It was the same owner??
Hi Neal. Yes I made a big mistake there. No it belonged to a different seller.
Remember a mobile home is not like a regular house and is a devaluing asset like a car. So the land is really where the value is in that situation. Personally I would not dump that kind of money into fixing trailers for those rent levels but that is just me. I have friends that own a lot of them and have been in the business over 40 years.
Count on purely cash flow and not hardly any aprpeciation. If you can buy up over time the lots around it and accumulate land then you might have a development play down the road when things build up around the area.
I am trying to figure out how the agent gained entry to a house not listed for sale and owned by someone else. No lock box, obviously. Was the door unlocked and you guys just kind of let yourself in @Abad Marroquin ?
Hi Joel. These double wide mobile homes with half a lot are being sold around $40k in this area. These two include the lots. Yes I am not planing on selling them, but to hold and have a decent cash flow. prior to this situation I had already bought 3 and they are currently generating $600 each. But I am nos sure I am getting good deals here or not since I am a newbie. I bought all these properties this year. Thank you for your input.
Steve. She knew it was ocupied. She had a key, but did not use it. She knocked on the door and there were 2 people inside. The agent told them that the management had call to let them know that she and a buyer were going to look at the property and if it was ok if we could come in and look at it. One of the people said he didn't know anything but said maybe my Mom or Dad know but they are not home right now. "But you can come on in," they said. One of them was an adult, so that's why we went in, but this was obviously wrong.
Not sure I'd work with that realtor if that had occurred. Definitely could have walked and gotten money back. I agree that you may be putting more money in than needed or wise.
Gotcha @Abad Marroquin . Thought it was just a random house the realtor had no affiliation with!