Posted by Steve W (WA) on December 17, 2002 at 13:49:48:
I use that strategy myself, when it works. I can often sell for (a little) below assessed value, and still come out mucho aheado.
I like it - congrats on the success.
Just completed first deal! - Posted by Josh (OR)
Posted by Josh (OR) on December 10, 2002 at 23:30:46:
Hi all!
I just wanted to post and say “thank you” to all the folks who regularly post on this board- your wisdom really helped me get my first deal done! I am amazed, actually, at how quickly I was able to pull a deal together. I bought DOW five weeks ago, and completed my first deal today! Here’s what I did…
I found a vacant 1972 Bon Prix 14 X 65 mobile home that I arranged to buy from a motivated seller. She bought it from an aquaintance, put new carpet, paint and appliances in it, and then couldn’t find a buyer for almost a year. Asking price was $7500, I got her to take $3750, and told her I would buy it from her when I found a buyer. This allowed me to find a buyer before I had to commit to anything. She agreed to leave a key w/ the PM, and let me show it as often as I wanted, so long as she didn’t have to be there. I put an ad in the Sunday paper for two consecutive weeks, but only got about 7 calls. I then put an ad in the thrifty paper for one week, and got 30 calls! I found a buyer, and closed the deal today:
bought for $3750
sold for $12,000 at 9.99%
$1500 down
$350/mo for 40 months
For a first deal, this feels “good enough!”
Thanks again for everyone who contributes to this board and makes it such a great learning tool!
-Josh (OR)
Re: Just completed first deal! - Posted by Lin
Posted by Lin on December 16, 2002 at 23:53:29:
Josh,
Where are you? A 1972 14X65 gets you $12000?? Nice work. I’m giving up SFR’s for mobiles,
'cause maybe I’ve been thinking too small!!
Lin (Corvallis)
Re: Just completed first deal! - Posted by Dan’l from MO
Posted by Dan’l from MO on December 11, 2002 at 22:49:28:
What a ROI! I’m curious as to how you arrived at your $12k price. Did you pull that from air (PFA)? Or how did you arrive at it?
Congrats, btw–
Re: Just completed first deal! - Posted by Don-NY
Posted by Don-NY on December 11, 2002 at 09:23:29:
COOL! Dude you are on your way!
Re: Just completed first deal! - Posted by Josh -OR
Posted by Josh -OR on December 17, 2002 at 01:15:55:
I’m in Portland- this deal was in a park in the Clackamas area. I just tried to sell for 3X what I paid, that’s all. Actually, it comes out to over $14k when you factor in interest at 9.99%. My buyer was more than happy to pay whatever I wanted, so long as she could afford the payment. I didn’t want to go completely ridiculous on the price, I just wanted my 3X spread. I think it’s a good margin to shoot for, especially if you decide to sell part of the note later, you can get all your initial investment back, and still have enough cashflow left over each month to keep a smile on your face.
Re: Just completed first deal! - Posted by Josh -OR
Posted by Josh -OR on December 17, 2002 at 01:35:17:
I wanted to get 3X what I paid for it, in case I decide to sell part of the note later. For example, if I buy for $4k, and I sell for $8k, if I want to get back my initial investment of $4k, I would probably need to sell about $6k worth of payments to do it (give or take,) leaving me with just $2k worth of payments coming to me over the course of the next 40 months (in this particular case.) Whereas if I sell the MH at 3X my initial investment and cash out part of the note to recoup that $4k, I still have over $6k worth of payments coming to me over the same period, and I have all my money back. (more than $6k when you figure in interest.) It also just happens that according to the county where the MHP is located, the MH has a market value of just a little over $12k. Not that I would price it according to what the county says it’s worth, but it sure makes it easy to justify the price to the buyer with the county tax assessor acting as my 3rd party authority on what the MH is worth. So that’s my formula- buy low, sell for 3 times as much. Or, buy for 1/3 of market. Either way, it’s simple. This is a great buisiness!