I'm looking at buying a cheap property in Florida. It's an old 3/2 mobile home on over a quarter acre in a decent area. It needs quite a bit of rehab and is currently in an unlivable condition. I'm wondering if anyone has had success buying a property really cheaply (for say $15,000) and reselling it as is for say $30,000 using owner financing (without doing any rehab). Basically you're able to mark up the price because you're offering the service of providing the loan.
Yes, we have sold handy man special/ owner financing deals. Couple things to think about with mobile homes that are unlivable. When was the last time it was lived in? when is the last time the power was on? Talk to the city to make sure it is still zoned and able to have a mobile home on the property. Talk to the power company to make sure power can be turned back on, if it has been off for awhile. Each cities rules and regulations on them is different so make sure to call and verify exactly what it will take to get everything functioning first. Then you can think about selling it handyman special to someone. I would actually try and structure the deal to sell just the mobile home owner financing and do a lot rent on the land ( keeping the land). Get 3-5k downpayment and work off payments on the rest.
Thank you so much @Anthony Conway for these valuable tips! I really appreciate you sharing your knowledge with me. Do you have any special formula or method to determine your owner-financed resale price?
Great advice! I am still looking for similar deals in SW Virginia!
@Michelle Robbins I usually come up with a number in my head but don’t tell the buyer that number. Then when you find a buyer with the down payment you kinda car sales man it and ask them what monthly payment would work for them. Take there monthly payment they can handle and figure out the terms that would work best for you/ them. I spread it over 60 months and put anywhere from 5-10% apr on it. APR depends on job/credit history, amount of down payment, any risk you feel the need to cover more or less. Just like when you purchase a home they advertise it for $100k but then when you go to sign the final papers you see the amortization schedule and overall payments of $320 k with apr. so you can advertise a lower number in the same manner as that house $100k but really with terms involved you with get the $320k. Hope this makes Sense. We will advertise a cash price so people can see close to what the purchase price will be but but then tell them the owner financing term and payment are different for each applicant due to credit job history.
Make sure that you're buying the home as well as the land. Home likely has title unless its actually been designated as real property with the land. You should be able to tell whether on the assessors website if the home is taxed separately or with the land as well. I don't know the FL market well except that prices can go higher - that being said, my guess is that an older home and unlivable the 30k seems high but again I don't know the value of land out there. Keep in mind, I see plenty of homes that are in unlivable condition and many of the times wouldn't even take them for free. Multiple holes in floors and ceilings are a big turn off. And if its been stripped to studs and interior needs to be completely redone it has to be really a right deal.
I just love this community of investors! Thank you @Anthony Conway and @Steven J. for sharing your most valuable of insights. I so appreciate it! Yes, it definitely makes sense and it was similar to the strategy I was thinking of using.
What are your recommendations for selling a property like this? I'm assuming you are listing them yourselves on craigslist, eBay, zillow, Facebook, etc.? Any other marketing or selling tips you'd be willing to share?
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