I bought my first deal of 2009 back in March. I've bought 9 since then, but here are the details and a few things I learned on the first one.
HUD foreclosure--3-2 singlewide mobile home on nearly 4 acres.
The Good:
--Pretty wooded property with a creek and a pond.
--360 feet of frontage on a state highway, a half mile from a US highway.
--Home built in 2005, didn't need much work
--Paid $21K, cost for the buyer in 2005 was @ $80K
The Bad:
--Singlewides don't rent for too much
--55 miles from my home
--some of the property is subject to flooding
The Ugly:
Some older uglier homes nearby including a very rough home behind mine with lots of junk (dead cars) around it.
Overall, because of the location and highway frontage, this is probably a good deal. However, I made a mistake that cost a fair amount. Even though it has plenty of road frontage, the driveway access came across 2 other properties. I had a survey done and it did not show an easement. The existing driveway was rough, so I got pricing on putting in my own new 530 foot driveway. A contractor L liked told me he could do it for $5800. That would include raising the ground 12†before he put down the rock/gravel.
He put the new drive in and it looked fine, but he neglected to raise it 12â€. I asked him about it. “No problem†he said, “It’s solid ground, you will be fine.†Then it rained. I wasn’t fine. My Suburban sank to the axles when I used the drive after the first rain. Fortunately, I had a AAA membership and got winched out.
The driveway guy put some more rock on for “freeâ€. Not enough. He put more on and charged me his “costâ€. Not enough. He put even more on (my expense). †That will definitely fix it.†Then it REALLY rained. 4-5 inches in one morning. I went out to see, and there was 6†of water moving across the drive in a stream. I took a bunch of pictures and did my own engineering design. I got the driveway guy back out and he agreed with me as where another culvert was needed. He put it in (only $1000!) and dozed logical paths for runoff on both sides of the drive.
Driveway—DONE! At a cost of $12k+, 60% of what I paid for the place. During the process, I talked to the guy who owned the property before it was developed and foreclosed on. He said there was an easement for the original driveway. I wish I’d known that and the problems with the new driveway. I would have bladed and rocked the original drive and saved $10K plus.
The house itself just needed floor coverings and cosmetics. I went with 8mm wood laminate and it looks great.
The junk on the other property did discourage prospective tenants. I talked to the people who owned that place and came close to buying it. Cheap. The home is really a teardown but that’s not what I want to do now.
So, purchase was, $21K, improvements and repairs, $16K. $37K total. Rented for $615. Not great. The upside is that I did take my lessons to heart and am doing better on each deal since then.
