$50,000 Profit Mobile Home Flip!
I haven't posted in a while, as I have been busy running my investing group and doing deals, but I wanted to start sharing more. I am a flipper, wholesaler, and wholetailer, but have never flipped a mobile home. Why? I have never thought flipping a mobile home would be worth my time. That all changed a few weeks ago, when I was asked to evaluate and possibly consider a mobile home.
The seller owned this property free and clear and it is in a park. The seller was behind a few months on park space payments and the seller also owed the park some other money. They filed for repossession, and I was called in because the seller wanted to get out quickly and move on. This is a double-wide 1510 sq ft 4/2 manufactured home built in 2003. It needs flooring, paint and a few minor repairs. It comps at about $80K if looking decent. The seller wanted $50K, but after 2 weeks of back and forth, the seller agreed to $23,500.
We are almost done with the work after about 10 days and the home is going to be listed at just over $80K, making this a $50K profit, actually about $45K after re commissions and closing costs! Not a bad deal...a 200% return in just a few weeks. So, apparently you can make some money flipping mobile homes! Maybe I need to change my marketing strategy :-).
@david Oldenburg mind sharing how you got in contact with seller please? Gave him/her call, visit, sent mail, social media?
@Erik Flores I get almost all of my flip deals from referrals from people I know. I have been in the real estate business for many years, and I also run a big real estate investing group, so I meet a lot of people. This mobile home came from someone who I know in my group, who has referred other business in the past.
@David Oldenburg Well? The suspense... it's killing me!
How'd it sell and what were the final numbers all in? Thanks!
@David S. Hi, flipping the mobile home was a great experience. The numbers worked out really well. Purchase price was $22,500...I put in $15,000 and sold for $89,000. That's a profit of $51,500 minus $2,225 in RE commissions to the buyer's agent ( I am a broker so I listed it myself) and about $800 in closing costs. I used my own cash so there were no holding costs. Total profit just under $50,000. It took about 3-4 weeks to do the work and it sold in just a couple of days to a cash buyer. The park management delayed the closing for about 2 weeks, while they did their paperwork and approved the buyer to live in the park.
It was a great experience and I would flip another mobile if the right opportunity came up again! Mobile homes are really hard to comp because their age and location in the park, etc... make a big difference in their desirability and value. I have seen several other flippers try to flip mobiles and lose money or make very little, so you have to get really good at estimating ARV. I think sometimes flippers get overly confident about making money when the purchase price is so low. It's like, "I can buy this for $20K, how could I possibly lose money?" Good luck!
David Oldenburg
Originally posted by @David Oldenburg:
@David S. Hi, flipping the mobile home was a great experience. The numbers worked out really well. Purchase price was $22,500...I put in $15,000 and sold for $89,000. That's a profit of $51,500 minus $2,225 in RE commissions to the buyer's agent ( I am a broker so I listed it myself) and about $800 in closing costs. I used my own cash so there were no holding costs. Total profit just under $50,000. It took about 3-4 weeks to do the work and it sold in just a couple of days to a cash buyer. The park management delayed the closing for about 2 weeks, while they did their paperwork and approved the buyer to live in the park.
It was a great experience and I would flip another mobile if the right opportunity came up again! Mobile homes are really hard to comp because their age and location in the park, etc... make a big difference in their desirability and value. I have seen several other flippers try to flip mobiles and lose money or make very little, so you have to get really good at estimating ARV. I think sometimes flippers get overly confident about making money when the purchase price is so low. It's like, "I can buy this for $20K, how could I possibly lose money?" Good luck!
David Oldenburg
That's outstanding David, congrats! Thanks for filling us in on the deal. You've really sparked my interest regards the mobile home community; I've always noticed there tends to be a lot more inefficiency in the market place for mobile homes. Inefficient markets are a good thing for investors, so for that reason I will start applying myself in that market place to see if it looks worthwhile.
Thanks again!
This looks like a great deal but, I would not count your chickens before they hatch! Mobile homes can come with some surprises and the holding time can be expensive if you are paying lot rent.