Investor Spotlight
Issue #8:
Featuring Sam B. – Virginia
Wholesaling & Flipping to cash flow
Sam Barr is a man of all trades. He flips, he wholesales, and he buys and holds cash flow. The only reason why he wholesales/flips, is so he can buy more multi-family units, mobile home parks, and self-storage.
In this particular deal, we’ll talk about his 16 pad mobile home park; which he found off-market like most of his deals.
Here’s a little info about Sam:
He has 5 employees devoted entirely to property management. For acquisition, he’s solo. He’s been flipping for a number of years now. 90% of his deals he finds off-market using direct mail.
The Deal
The entire package came with:
- 16-pad mobile home park
- 2 empty lots
- 30×40 metal building (for storage/maintaince)
- 1 old single-family house
- 8 Mobile homes (1990’s), owned & rented by the park
- Each home worth an average of $20,000
- Gravel roads and utilities paid by the tenants
The seller:
Tired landlord
Value-add strategy:
- Converted the 2 extra lots into usable MH pads
- Conducted survey which added 2 extra MH lots.
- Increased lots from 16 to 20 spaces
- Paved the gravel roads
- Filled empty MH lots with new mobile homes
- New evaluation a year later: $400,000
Cash-out strategy
- Sold the single-family for $32,000.
- Sold two mobile home for total of $35,000
- Refinanced and cashed-out $110,000
- $$ left in the deal: $53,000
The Numbers
- Purchase price: $230,000
- Gross Rents at time of purchase: $3,050
- Gross rents after value add: $4,300
- New stabilized value: $600,000
- Purchase vehicle: cash
- Marketing ROI: 3,800%
- Equity after value-add: $547,000
- 20-year cash flow yield: 97%
The Marketing
- The list: All mobile home parks with 15 pads or more, within 2 hour radius of his residence
- Mailing piece: BPM Template Letter
