Manufactured home -> SFR -> 80k in profits in less than 2 years
At the end of March 2017, we closed on a property that was selling for 112k. It was a manufactured home on 2 acres in San Tan Valley, Arizona. The manufactured home had been built onto until it was more of a structure built home that a manufactured home. We went to the city to see if we rehabbed it if we could get it reclassified as a regular single family home rather than a manufactured home. They said yes.
We bought the home, and spent about 9 months completely rehabbing the home. The hard money lender lent us the whole purchase price, plus about 100k for the rehab. After it was finished the appraisal came in low because the appraiser didn't do a very good job appraising the property. Good thing my business partner was an appraiser for 6 years and he was able to rebuttal the appraisal and got it increased by around 20k until it came in at around 275k.
Our assistant brought a friend of hers to look at the house. This friend owns his own tile laying company and he lease optioned the property from us for 295k. We gave him a discount of 6k for the option fee for doing the tile work on the floors and the bathrooms. After 2 years, our tenant buyer decided that he wanted to move to a little smaller of a home and he wanted to sell it because the market has gone up so much that he would be able to make some money by selling it. Here is the listing: https://www.zillow.com/homes/for_sale/fsba,fsbo_lt...
After he moved in and started the lease option with us, we long term financing for around 200k and we created a second position note for around 20k that a passive investor wanted to lend to get completely passive income on his money. So ultimately we were no money of our own out of pocket on this deal and we were cash flowing about $100 a month (not a lot but it worked out well enough to do the deal because of the equity).
We are now under contract to sell the home for 315k and our tenant stands to make around 7-8k and we will be cashing out around 80k in profits in just under 2 years.
