I’d like to share my first mobile home deal with you guys. I had started advertising for rental homes, not even thinking about mobile homes, when I got the first call from my advertising:
“Hello?”
“Do you buy trailers too?”
“Maybe…depends on the mobile home. How much do you want for it?”
“$3,500 cash if you can buy it tomorrow.”
So I drove over to meet them that night. It was a 1979 Peach State in relatively good condition. After looking around, I said, “The best I can do is $2,000.” The mother looked at her son and said, “That’s probably the best you’ll get. I’d take it.” So he said “okay.”
It was his home that he’d paid $6,500 cash for just six months earlier. He replaced all the plumbing also. So I gave him $20 and signed the contract.
The next day I called the owner of the lot and inquired about the lot rent. He said, “Well, it’s $300/month and let’s see…I think he’s five months behind.” What? He never told me about that. And he even signed the contract that said the lot rent was current. The nerve! So I said, “Okay, let me get back to you in a couple of days.”
I called the seller and said, “Look, you lied to me and told me the lot rent was current, but you’re five months behind.” He said, “I was planning on paying it off with that $2,000 you’re going to give me.” Yeah right!
So I said, “Listen, I’ll pay it off; but I can only give you $200 for the home.” He hemmed and hawed about not even being able to move on that much, but I held firm. He finally gave in and signed the title over to me. I paid the lot rent and gave him $200.
I was in the home for $1950 after all late fees were paid on the lot. I tried claiming that I don’t have to pay the late fees because they weren’t in the lot lease agreement, but the lot owner wouldn’t budge, so I paid him.
I put it up on the market for $7,000, owner financed. Only about two weeks passed and I got a call from a guy driving by who saw the sign. We met at the house, and he said he’d take it. So he gave me $500 cash and a note for $6,500, $300/month for 24 months. So now I was in the house for $1,450.
He stayed in the house for 20 months and never paid on time once, so I hit him with late fees every month, $50 + $10/day after the 5th. He decided it was too expensive to stay so he moved out and I forgave the debt. I had already made at least $6,000 not including any late fees.
When I finally made it over to the house to check it out, there was a sheriff’s notice on the door from the lot owner saying that there was $3,000 in lot rent due. $3,000! He hadn’t paid lot rent for the last eight months. Incredible! How did the lot owner even let it get that late?
Since I had to pay that before I could resell the house, I signed the title over to the lot owner and called it a day. I made $6,000 profit minimum on an investment of $1,450 in 20 months. That’s a yield of 242%. As Lonnie Scruggs says, “Good enough!”