Discover how two of our students, Tiffany and Ruby, turned a small mobile home park into a cashflow gold mine! Using creative financing, a low down payment, and a simple value-add strategy, we unlocked the property’s massive potential. Watch to learn proven strategies for big returns in small mobile home parks.
In this interview, you’ll learn three key takeaways:
- How They Found the Property – Discover the steps they took to identify this hidden gem.
- The Creative Financing Used – Learn about the seller financing strategy they implemented—a technique that we’ve used successfully in countless deals.
- The Value-Add Strategy to Boost Cashflow – Find out how they increased the property’s value significantly by making targeted improvements.
This story isn’t just inspiring—it’s actionable. So, take notes as we break down the strategies that Tiffany and Ruby used to turn their vision into reality.
Mobile Home Park Deal Breakdown
When it comes to real estate, understanding the intricacies of a deal is key. Let’s dive into the details of this particular investment—a seven-unit mobile home park—and explore what made it a success. This mobile home park is small but located in a beautiful part of town, making it a prime investment opportunity. Here’s the breakdown:
- Property Details: The park consists of six mobile homes and one single-family home, all situated on the same parcel.
- Purchase Price: $450,000.
- Cap Rate: At the time of purchase, the property had an impressive 11% cap rate. After planned rent adjustments and repairs, the proforma cap rate is projected to reach 15%.
- Financing: The deal involved seller financing with a 10% down payment. This meant the buyers, Tiffany and Ruby, only needed to put down $45,000. The seller agreed to act as the bank for a four-year term.
Key Lessons from Their Deal
This deal offers valuable insights for anyone looking to break into the commercial real estate market:
1. Seller Financing Requires Relationship Building
Seller financing isn’t just about numbers—it’s about trust and rapport. Building a relationship with the seller is crucial, and this deal highlights just how important that is. Tiffany and Ruby did an excellent job of connecting with the seller in person, which helped create the trust needed for him to act as their lender.
2. Understanding the Seller’s Motivation
One of the first steps in structuring any deal is identifying the seller’s motivation. By understanding what the seller wanted to achieve, Tiffany and Ruby were able to tailor the deal to meet those needs. This approach not only secured the property but also ensured the deal worked for everyone involved.
3. Leveraging Coaching Support
Seller financing deals like this are packed with golden opportunities, but they require a thoughtful approach and solid support. As beginners, Tiffany and Ruby leaned heavily on their coaches for guidance. They relied on daily communication and collaboration to navigate the complexities of structuring seller financing. Having access to experienced mentors allowed them to handle the nuances of this deal effectively and with confidence.
Interview: Big Profit with Small Mobile Home Park
Peter: I have two very special people with me, Tiffany and Ruby. Thank you for joining us.
Tiffany: Thank you, Peter. It’s a pleasure.
Peter: Today, we’re going to dive into your inspiring story about purchasing your first mobile home park. I appreciate you taking the time to share your journey. So, let’s get started. First, let’s hear from both of you—why did you get into commercial real estate? What’s your why?
Tiffany’s Journey: From Vision to Action
Tiffany: Peter, I’m always looking to grow and challenge myself to the next level, and real estate was the next natural endeavor in my journey. I’ve enjoyed creating businesses throughout my life, and some of those even provided residual income. That said, there’s always the constant need to acquire the next client to keep growing a business. What I love about real estate, in general, is that it’s a fantastic way to create passive income. For me, commercial real estate takes that to the next level. My driving factor? It’s my true passion—volunteer ministry work. In fact, Ruby and I met and became friends through that work. It’s interesting to see how we’re now using commercial real estate to support that mission.
Creating passive income through real estate will allow me to do more of what I love, travel where I want, and go as far as I want in my ministry work. I did dabble in single-family houses, but after watching your videos and learning about commercial real estate, I realized something important: for the same amount of time it takes to find a single-family house, I could use that time to find the owner of a multifamily property and acquire five, 10, or even 20 units at once. It became a no-brainer.
As for my “aha moment,” I’d say it was learning and understanding the concept of forced appreciation. With single-family houses, the value is based on comparable sales. But in commercial real estate, the value is based on net operating income, as you’ve taught us. By increasing income and decreasing expenses, we can force appreciation on a property in a relatively short time. I found that truly amazing.
Ruby’s Perspective: Taking the Leap
Ruby: To be honest with you, Peter, I probably wouldn’t have gotten into commercial real estate on my own. But, as you know, we’ve been friends for close to two decades, and I’ve seen Tiffany start and run multiple successful businesses. So when she told me she was getting into commercial real estate, I definitely wanted in on the action. Personally, I’ve worked a traditional job most of my life and found myself at a point where I needed a change. I wanted to do something different—and it was a big change. Like Tiffany mentioned, I’m also a full-time volunteer minister, and I absolutely love it. It’s my greatest joy. I realized commercial real estate would help me support that passion even further.
My first “aha moment” came when I read Rich Dad Poor Dad. That book helped me shift my mindset and get into the mindset of investing in commercial real estate. The second huge moment was when Tiffany introduced me to the number one commercial real estate mentor on YouTube—Peter Harris. The first video she sent me was a game changer. You made something that seemed so intimidating and complex easy to understand. You broke it down into bite-sized pieces, and that gave me the confidence to believe I could do this. Having a fantastic friend and partner to work with, along with a top-notch mentor like you, made me feel this was the right path for me.
Finding and Negotiating the Deal
Peter: Awesome. Thanks for sharing both of those stories. All right, let’s dive into the fun stuff. Let’s talk about how you found the deal, the pricing, the seller—just an amazing deal on this mobile home park. Please share.
Property: 7-Unit Mobile Home Park
Ruby: As for the property, it’s a seven-unit park with six relatively new mobile homes and one single-family home. We purchased it for $450,000 at an impressive cap rate of 11.5%. The seller’s motivation was quite high—when we first reached out, he was juggling a full-time job, managing a young family, and handling several single-family properties. He and his partner were ready to cash out on their investment, and we approached them at the perfect time.
How Timing Played a Role
Tiffany: In your program, Peter, we learned various methods for finding off-market deals—and this was exactly that kind of opportunity. As Ruby mentioned, we caught the seller and his partner at just the right moment—they’d already been discussing selling the property and were beginning to put plans in place to do so. We met with the seller and toured the property, after which we made an initial offer of $500,000. It went under contract in November at that price, with the seller opting for bank financing and aiming to close by the end of the year. We talk about seller financing a lot, and while that’s always a great option, the numbers here were fantastic, and we were comfortable proceeding with bank financing.
Due Diligence and Shifting to Seller Financing
Tiffany: The due diligence process presented some challenges. There were delays in receiving certain financial documents and other materials we needed, and with the holidays approaching, it added to the stress. Despite the delays, we were committed to making this work. Eventually, I had to contact the seller and explain that the bank was unlikely to meet the original closing deadline. He was understanding about it, and before we ended the conversation, I suggested seller financing as an alternative that could expedite the process. It would eliminate much of the red tape and help us meet his desired timeline.
While he initially wanted to stick to bank financing, we respected his decision and continued forward. Then, to our surprise, he called back a few days later—he and his partner had discussed the idea and decided seller financing would be preferable if it wouldn’t complicate matters for us. We were ecstatic!
Pushing Through Last-Minute Hurdles
Tiffany: The only issue? By then, it was December 20th, the holidays were around the corner, and both Ruby and I had travel plans. How would we make it happen? Again, Peter, we consulted with you, went back to the drawing board, and devised a plan. Two days later, we flew up to see the property and conducted the inspection.
Your advice was invaluable during this time, Peter. When I suggested letting the inspector handle things and sending us a report, you insisted it was important for us to be on-site. And it truly was! We spent nine hours at the property with the inspector, examining each unit thoroughly. It gave us invaluable insight into what we were purchasing—the positives, the challenges, and everything in between. We’re so grateful for that guidance.
Negotiating the Final Price
After the inspection, we analyzed the findings and reviewed the numbers—again, with your support, Peter. This allowed us to negotiate a $50,000 price reduction. Ultimately, as Ruby mentioned, we closed at a purchase price of $450,000 with seller financing.
Financing Structure
Peter: That’s awesome. Just to recap, I think there’s a detail you left out—the original asking price was $600,000, right? When you asked the seller what they wanted, that’s the figure they shared.
Ruby: That’s correct.
Peter: So, you got them down to $500,000, then after the inspection and negotiations, settled on $450,000.
Tiffany: That’s right—$450,000 with 10% down, which amounts to $45,000.
Peter: That must’ve done wonders for your cash-on-cash return. What was that figure, by the way?
Tiffany: It was around 61%.
Peter: That’s fantastic! So, let’s review—$450,000, 10% down, and a four-year term with the balance paid at just under 6% interest. Essentially, the seller is acting as the bank. You’ve done the amazing thing of securing legal title to the property, making it just like using a bank. But in this case, the bank is the seller. No banks involved—only the seller. That’s phenomenal.
Value-Add Plan and Exit Strategy
Peter: So, what’s the exit strategy?
Ruby: Our exit strategy is to hold the property for four years while maximizing its potential. There’s so much upside to this property—it had equity from day one. Additionally, two of the mobile homes were fully remodeled, and none of the rents across the property had ever been raised. That was an immediate opportunity for us. The area is growing rapidly, Peter—it’s a fantastic location with nice homes. We’ve driven through it multiple times and really love the neighborhood. And while we normally follow your advice of falling in love with the numbers and not the deal, with this property we fell in love with both! It’s a phenomenal investment.
Forcing Appreciation and Projected Value
Tiffany: Right back to what we mentioned earlier—forced appreciation. As Ruby said, rents hadn’t been increased previously, so we immediately implemented rent increases. We also identified areas where we could reduce expenses, thereby increasing the net operating income (NOI) and forcing appreciation on the property.
Peter: So, you’re raising rents on both the mobile homes and the single-family home on-site. What’s the result of these changes on your after-repair value? What are we looking at?
Tiffany: It looks like the after-repair value will be around $784,000.
Peter: Wow—that’s incredible. From $450,000 to $784,000. And over what period of time?
Tiffany: Really, within the next few months. The property manager has already started raising rents. As Ruby mentioned, two vacant mobile homes needed remodeling, but that’s been completed, and we’ve secured new tenants for those units. The changes are already showing great results.
Overcoming Challenges
Peter: Okay, so great success there, but there are always challenges, right? Let’s talk about that. Could you share one or two challenges you faced with this deal and how you overcame them?
Tiffany: I think the biggest challenge was doing all of this at the end of the year. With the seller wanting to close by year-end. Everything was under a tight deadline, and there was definitely a rush to it. Of course, we had other things going on in life, we were both planning on traveling, and trying to meet all the deadlines was a little stressful. In fact, the closing date was changed, and it ended up being scheduled for one day after I was supposed to fly out of the country. I remember thinking, “How do we get this done?”
But, as I said, the seller was fantastic. He’s a great guy, and we had a great relationship with him. Plus, Peter, your guidance and direction really helped us navigate everything in a pinch. In the end, it all worked out.
Peter: Anything to add to that, Ruby?
Ruby: I think the inspection was a challenge—just getting it scheduled and crunching everything into that two-week timeframe was tough. But, after working through everything, we were able to close and meet the deadlines.
Working with a Mentor: The Key to Success
Peter: Next, could you share with us a couple of highlights of working with us as your coaches? You were wonderful to work with—ideal students. Could you share a little about how it was working with us and how we helped you?
Ruby: Yeah, Peter. What I love the most about working with you is the one-on-one time we got to spend with you. You’ve truly proved to be more than just a mentor—you’ve acted like a partner to us. We had access to multiple weekly calls, and the one-on-one calls were invaluable. The patience you showed in answering every single question—responding to every email we sent, often within minutes—was remarkable. It’s been a five-star experience, really.
I remember two days after closing on this deal, we got a call about a burst pipe on the property. We called you frantically, and you walked us through every step of the process. You were there for us, and we truly appreciated that. I’m sure we couldn’t have done it without you.
Tiffany: I feel exactly the same. What I’ll add, Peter, is that most programs—of which I’ve done several—offer education, but they don’t provide someone to walk you through the deal. With you, we’ve had access to decades of experience and an entire team behind us. That really equips us to be true professionals as we carry out our business.
Every deal, every seller, and every property manager is unique. Not all title companies are the same, and not all of them are experienced in handling creative deals. There are always moving parts, and you’ve been there, walking us through contract wording to keep us safe, helping with property management agreements, and navigating the unique aspects of each deal. I truly believe there’s nothing we could face that you, our coaches, and your team wouldn’t have the experience to help us handle.
Advice for Beginners
Peter: Now, our audience is mainly beginners—people just starting out, and a few intermediate investors. What would you share to encourage them to get started?
Ruby: Well, I have three words for them: join Peter Harris.
Tiffany: Yeah, it’s as simple as that. But also, Peter, I know it’s daunting for people to get into something new—something different than what they’ve ever done before. Investing in their education and having a mentor can seem intimidating. But I love the saying, “If you know where the gold is, it doesn’t matter how much the shovel costs.”
Commercial real estate is full of golden deals out there. We’re talking to sellers every day. Why wouldn’t you want a mentor to dig in with you, help you save time, save money, and navigate these deals? Because we’re talking hundreds of thousands of dollars here, and one mistake can cost you dearly. If you’re going to do this—and you should—find a great mentor. We couldn’t recommend anyone other than Peter and his team.
Cultivating Seller Relationships
Peter: I appreciate that. One thing that you both did exceptionally well was working with the seller. How important is it to be successful in this business, to deal directly with the seller, and to create the rapport and trust needed for them to act as the bank for you?
Ruby: I think that’s key to taking a deal to the next level. We’ve experienced this multiple times. Sometimes, when you’re first talking to a seller, they may seem hesitant or uninterested. But once you meet in person, maybe the first or second time, and spend a few hours getting to know them, everything changes. Building that rapport, establishing a relationship, and having good communication—it’s transformative.
Tiffany: Exactly, Peter. When talking to sellers, I’ve found that they’re often very concerned about the future of the property. They want to ensure it goes to the right person—someone who will protect the tenants, expand on their legacy, and maintain the same level of integrity they’ve upheld. It’s not just about money for many sellers. So, it’s crucial to show them who we are, build that trust, and express genuine care for their goals and the future of their property. When they feel confident in you, it makes them more likely to trust you with something like seller financing.
Peter: That’s great. So, getting seller financing done isn’t about how much money you have, how wealthy you are, or what school you went to. It’s about understanding that this is a relationship-based business.
Ruby and Tiffany: Absolutely.
Future Plans
Peter: And both of you have done an amazing job in that area. Here’s the last question. Again, thank you for your time. What does the future hold for both Tiffany and Ruby? What’s the plan?
Ruby: We’re going to rinse and repeat—continue to learn, grow, and expand our portfolio.
Tiffany: Absolutely, Peter. We’re actively talking to multiple sellers and exploring deals. Our focus is to keep finding the next one with great numbers, just like this deal. We’re also planning to spend more time with investors. There are so many people out there who want to participate in commercial real estate but don’t have the time, knowledge, or interest to hunt for off-market sellers like we do. That’s what we love, and we’re excited to pair up with investors to meet their financial goals with incredible deals like this one.
Peter, it’s really a win-win across the board. For sellers, we help find the right buyer for their property. For tenants, we provide affordable housing, which is desperately needed in our country. And for investors, it’s a win too. With great deals, strong numbers, and your fantastic team guiding us, everyone comes out ahead.
Every Successful Commercial Real Estate Investor Has a Mentor
If you have any comments or questions, text PETER to 833-942-4516.
Every successful multifamily investor has a mentor. Get your mentor here: Commercial Property Advisors Protege Program
Leave a Reply