$50,000 Profit Mobile Home Flip!

Real Estate Deal Analysis & Advice
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$50,000 Profit Mobile Home Flip!

David Oldenburg
Lender · Granite Bay, CA · Member since 2014 · 456 posts · 454 votes

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 :-).

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Daniel Derrick
Investor · Tigard, OR · Member since 2016 · 16 posts · 14 votes
8y
Wow! That deal sounds very familiar. I’m in Portland and I found a 2/2 1991 mobile home in a park on sale for $35k. I negotiated down to $20k with comps in the park going for $120k. I estimate the rehab to be $33k and that includes a roof and an added bedroom to make it a 3/2. Even after holding costs and expenses, I’m looking at a profit of $60k. We’re a month into the rehab and so far no budget busters. On the west coast with prices so high, even for mobile homes, there is money to be made on mobile homes. I’m already looking at if this is an anomaly or a system that can be expounded upon. Congrats on your success!
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  • Erik Flores
    Sacramento, CA · Member since 2018 · 3 posts · 0 votes
    8y
    @david Oldenburg mind sharing how you got in contact with seller please? Gave him/her call, visit, sent mail, social media?
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  • David Oldenburg
    OP
    Lender · Granite Bay, CA · Member since 2014 · 456 posts · 454 votes
    8y

    @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.  

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  • David S.
    Rental Property Investor · Larkspur, CO · Member since 2018 · 198 posts · 179 votes
    8y

    @David Oldenburg Well? The suspense... it's killing me! 

    How'd it sell and what were the final numbers all in? Thanks! 

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  • David Oldenburg
    OP
    Lender · Granite Bay, CA · Member since 2014 · 456 posts · 454 votes
    8y

    @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

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  • David S.
    Rental Property Investor · Larkspur, CO · Member since 2018 · 198 posts · 179 votes
    8y
    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! 

    1Reply
  • Marc Faulkner
    Investor · Kalamazoo, MI · Member since 2009 · 1k+ posts · 495 votes
    8y

    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. 

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