2 ideas... little help?

General Real Estate Investing
1

Ok i have an idea and i cant really find any info on it so im helping i can get some info from you guyz :slight_smile:

i want to do 1 of 2 things. first of all i have a friend that wants to build a house and then sell it with the cash he has on hand and the equity he has in his current house.

1- i want to find a piece of land and build a home on it. one downfall with this way is how long it will take to build the house but im guessing we could make quite a bit of profit off of it. im sure your thinking, why does this guy need me? well one thing i have is the ability to buy things tax-free. i am native american and anything that i buy on my reservation or have delivered here is tax free. we currently have a home depot here and i could buy many of the materials needed there and save alot of money.

2-i would like to find a piece of land and buy a pre-manufactured home and put that on the property. i should be able to buy this manufactured home with no tax also, and i have talked to a manager at palm harbor homes to see if i could get some kind of repo at a cheaper price. the manager set me up with guy there in charge of that department but i didnt have any cash at the time so i didnt even try to go and meet with the guy, but atleast i know now that its a possibility. i figure the turn-around time would be much less doing it this way. after crunching a few numbers and checking out some local pre-macufacutered homes being sold it looks like i could make a pretty good profit. most homes with a reasonable ammount of land sell for $200,000-$250,000, and i was told i could get a repo’d manufactured home for about $90-120,000. Plus the price of piece of property that i am looking at which is about $40,000 + septic, water, elec, etc. total i figure it should be about $175,000 which would give about $25,000-$75,000 profit. but does this sound feisable? im i missing a large point here, or would this actually be possible?

2

Where are you that a Plam Harbor costs $90-120K? Here they’re about $40-60K!

What is the sales tax rate where you are?

Keith

3

well im sure there are cheaper palm harbor homes than what i quoted, but the few that i was looking at were generally 3-4 bed 2200+sqft. with some modest upgrades. i never actually got to get a quote for a repo’d palm harbor home, but i wasnt expecting a huge difference. again, something i need some insight on. but obvisouly the cheaper i can get the home for, the more money i can make, or the faster i can make a sale at a lower price.

i live in washington state, im told the sales tax is 8.5% in my area, but about 20 miles away it is 8.9%, just a comparison.

4

any comments?

5

My very first deal was a double-wide that I put on a parcel of land. I think that I paid $29,000 for a repo that was in like-new condition and it included a new heat pump, delivery, and set-up. Yes, it can be done and be profitable.

I did learn a couple of things on this project. First, double-wides are more difficult to finance than stick-built homes. Second, insurance on double-wides are almost double that of stick build homes. Even with these two factors, they can still be quite profitable.

Good Luck,

Mike