Rehab success story # 2

I’m sharing a few of our rehab stories due to the fact, filling up a turn around park is really what it‘s all about, from both the increased lot rent/ cash flow and the increased value of the park you are building, this is how you build your cash cow. This story begins with an abandoned double wide in our park, 3 bedroom, 2 bath, living room, dining area, kitchen, sitting room, 9 years old. The numbers worked out as follows, $10K purchase price $6K rehab and labor which includes a new heating and cooling unit, total cost $16K. The main point of this story is how having an open mind when structuring deals as well as being a good listener can make a deal even better.

One of our residents approached me about buying the double wide we were rehabbing 10 days before completion, in talking to him I found that he owned his little 2 bedroom single wide in the park free and clear, he intended to sell the 2 bedroom so he would have the down payment on the double wide. My years of experience with Lonnie deals told me this was a great opportunity, I suggested to him he use the 2 bedroom as a trade in instead of a down payment, after discussing it he agreed to turning over the home to me and I gave him a $2500.00 credit against the double wide as a down payment.

The results, before I get to the results let me make one other very important point, the chances of this potential buyer selling his house quickly enough to take advantage of buying this double wide was slim to none. In addition to that I already have a qualified buyer standing in front of me, I already know his payment history, and what kind of people they are. Now the results, remember all I am currently receiving from these 2 homes is 1 lot rent. I sell the double wide taking the 2 bedroom trade in as the down payment, I now receive a $350.00 house payment and $175.00 a month lot rent. Within 3 weeks we paint and do some repairs to the 2 bedroom trade in and start receiving a $200.00 house payment and $150.00 in lot rent. Do you see what I accomplished, before doing this deal we had only one lot rent of $150.00 coming in, after the two homes were sold we had 2 lot rents totaling $325.00 and 2 house payments totaling $550.00 for a new total monthly income to the park of $875.00 instead of the $150.00 we received before this deal. I’m not sure if it gets much better than this, personally I would love to do one of these deals every month. And for those of you who realize that I left something out, yes we also received a $1000.00 down payment on the 2 bedroom single wide which makes the deal even a little sweeter.

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