I purchased two mobile homes for $3,200. One seller gave me the mobile home, but I had to pay $1,200 in back rent to the park. I purchased the other for $2,000. I did some minor cosmetic work and advertised the two mobile homes as “owner financing with $1,500 down.” Within two weeks, I got the full down payment ($1,500) for one and $900 from the other.
At this point, I had only about $800 invested. It didn’t take me but two months to recoup the remainder of my initial investment! I created two notes: One for $7,900 and the other for $6,000. Total of $13,900 – $3,200 = $10,700 net profit (with only $800 invested).
Not only did the profit of $10,700 at maturity look good, but it also provided a nice $440 monthly cash flow for about 2 years.
About five months later, I saw a house advertised as a “lease purchase” with $10,000 down. The house looked like a “flip” property. It was offered at $87,500 with $10,000 down @ 9% simple interest. I knew that it would bring about $106,000 on the market! I didn’t have the $10,000 in cash, so I offered my two mobile home notes as collateral.
The seller quickly accepted the notes as collateral and created a promissory note for the full amount of the $10,000 down payment. I assumed the first and paid a minimal amount on the second for two months. I sold the property for $105,800!
I made a profit of $8,300 on the house and $10,700 on the mobile home deals in less than eight months into my real estate investing career!