So your interested in flipping real estate. You have a trade background, so fixing up that handy-man special won’t be that difficult. Now funding the purchase of the first home is a problem. With new home prices rising into the hundreds of thousands, it just isn’t in your budget to do this. Even if you could get the property, there wouldn’t be enough money left over for the improvements that boost price on resale. Are there any other options? Yes. This is not a guaranteed resale, at least in a timely manner, but the profit can reach over 400% on return. This may surprise you but the answer is to begin with the purchase of a mobile home in your area.
Start by searching your local papers for mobile homes for sale. You are looking for a real handyman special, as cheap as possible. If you can have a start up cost under fifteen thousand dollars, then you are off to a great start. Look past the repairs, and improvements needed. Remember, this will not be costly to improve, as mobile homes are small in size, and materials tend to be cheaper. The reason is the need to use lighter weighted material, as opposed to the heavy duty material needed in most houses. The square space in mobile homes is far less than that of a normal home. This also means quicker completion of each individual improvement.
An example: Installing a new kitchen floor in a house can take about a week or two. Materials are more expensive due to the extra square footage involved. Now, in a mobile home, the floor should be completed in one to two days. The material is lighter, therefore, cheaper. The square footage is less, which means less material will need to be purchased.
Most financial institutions will finance only fifty percent of the loan on a mobile home. So if you must use a bank, again keep your purchase price low. If the mobile home sells for fifteen thousand, offer thirteen thousand. Then you will need to fund six thousand five hundred dollars, to receive a loan on the other six thousand five hundred dollars. Closing costs are usually low, or none at all. Stick to “Fore Sale by Owner” property.
Once you have the mobile then the real work begins. It may take a good few months to update it completely. The more of the work you can do on your own, the better cost wise. Between vinyl siding, a few windows, and some flooring, the place should be fabulous by the time you re-sell.
The flip is the best part of all, check out these profits. Say you bought for thirteen thousand, and put another seven thousand in home improvements into the place. add closing costs, if any, and you are at around twenty thousand dollars. Depending on your location, you can make up to a 400% profit. That’s right, if you re-sell at
say, eighty thousand dollars or so, which is the general mobile home sale price in my area, you have just made yourself four times what you spent!
Then what, you ask? Do it again, and again. Now sit back and watch your financial situation soar.
