Things are very interesting right now in sunny Florida. A home builder friend of mine is no longer building 135 homes a year with an average price tag of 155K and instead has 7 homes being built with an average price tag of 785K! Wow!
On Thursday we close on a 1/4 acre lot with a 1975 singlewide for 3K! Home is lived in now and they place pots and pans under the leaks from the roof! Home needs a roof (1400) and flooring (900) and cabinets and counters (2K) but rents now for 500 and fixed up will rent for 650. Put another way 100% return of investment in under a year and a half.
To folks outside of Florida a typical well, septic, power pole costs approx 8,800 and impact fees in Marion county is 9,240. so a person developing raw land for mobile placement is looking at 18K before buying land or mobile home. We have opted to rehab( approx 6K) and rent. There are many deals like this going on here now…the problem is local people can’t or won’t buy this property because of the free fall in home prices. I don’t see how prices can get much lower and we will close next week.
I’ve had three sets of forum readers visit me this month. We are in the process of shutting down our retail lot for a year and even after explaining this fact they opted to visit and one person said it was almost sinful to shut down a fully licensed, viable business. We have a nice small office, faxes, computers, paved parking and 9 acres of zoned commercial retail lot. This got me thinking (I know a real shocker LOL) and maybe there is a teaching/learning opportunity here. My partner Tj has this year before his oldest daughter begins school and he wants to travel, scuba, cruise etc for an entire year. He’s not comfortable me working harder than him so we decided in Jan to sell as much inventory as possible (it’s all paid for) and shut down until next Fall, our busy season. Pay just electric, phone, mowing, and pick up where we left off in 2010. I can’t run the retail operation by myself…it took almost 5 months to rehab the last three repos we bought and this makes no sense. Once rehabbed they sold at double cost basis in 4 weeks each! With 60+ rentals these homes were put to back burner and we lived comfortably off rental income. I’m thinking there is at least one investor or investing family that could benefit from this operation. How many times have I heard on this Board that they wished they could try this for a while and see if this mobile home investing is for them? Plenty!
I have discussed this with 4 other folks from this board and I think I’ve got a workable game plan for the right person/people. Even not advertising, answering machine, and no new inventory we sold eleven homes and net/netted 102K for the first 6 months! One of my visitors stated people worked real jobs for a year 10 hours a day for my half (51K) of half a year of sales. WOW! I know he’s right but that statement caught my attention. We still have about 100K in inventory on the lot unsold and obviously this would need to be kept seperate but this is what I came up with
Buy 6-8 repos to stock the lot.
IMMEDIATELY rehab and sell these home retail.
Use these sales to buy 10-12 more homes and look for l/h deals
Possibly turn over homes one or two more times retail.
At 10 th month purchase no more homes and sell down inventory.
Finish the 3-4 l/h deals we have cooking.
We would end up at years end with 100K apiece after expenses from retail sales and at least two possibly 4 l/h packs fully paid for and rented or sold (if market improves). This would be an absolutely priceless education for the right person. At years end we could continue another year or this person may decide to go it alone. Permitting, title work, inspections, vendors scheduling all learned and explained.
The person choosing to do this would need to make a one year committment. Living here for that year would be ideal. Would need to bring at least 60K to the deal for purchase of new homes and would be secured with inventory in their name. I have never had a problem selling a 1999 Fleetwood 28X66 3/2 for what I bought it for $4,500 average.
This person needs to work at least 32 hours a week. This is what I commit to do. I have had several hard money offers and I don’t want that…I can’t or won’t do this by myself! The person will have these qualities:
Must be honest…we will have 6 figures in our account at times.
Love this business.
Help with all phases of ther business (paperwork included)
be prepared to post weekly about the business model.
Have computer skill working with photos and Excel
This is a great chance for the right person…learn ALL phases of the business and make some decent money as you learn. Land Homes, retail,repos, MHP management, MHP purchase (maybe)
There are still gaps in my plan but this is the bare bones…we can make thie thing as complicated or as simple as we want. I’m excited either way. A year of training and learning or a year of managing rentals and taking gaps of time off…they both have advantages.
I love this business and I love to teach others about this business. Any suggestions? Questions?