Monday, April 28, 2008

Knowledge is Power

"Knowledge is power."

This phrase rings so true. I feel the need to comment on it because I had a situation with a prospective buyer where I had to use my knowledge to help them make an informed decision. Basically, this buyer really liked the home but was a bit concerned about the structure of mobile homes with regards to rain and moisture.

So, I educated the buyer on what I knew about mobile homes - how you need to make sure the gutters around the home near the roof are working properly and re-routing the water away from the home and not damaging the side of the home. I pointed out the gutters on the home to the buyer and then pointed across the street to another home that did not have any gutters around the side of the home. Clearly, the water on that home is not being re-routed and could be a problem in the future.

Additionally, the buyer asked about siding and the possibility of water and moisture seaping in. I informed the buyer based on what I knew that usually happens with hardiplank (wood) siding if the gutters are not working properly, or even worse - no gutters at all. If water runs off the side of the home onto the hardiplank board, then yes - it will cause moisture on the boards and possibly even into the home. If this happens, I informed the buyer it's just a matter of replacing the boards with moisture and making sure the gutters are working properly to re-route any rain or water.

Then, I took it a step further to educate them about aluminum siding and it not having this issue as water just runs off the side since it is made out of aluminum. Though, it is always a good idea to make sure the gutters are in place, working properly, and water is being re-routed away from the home.

After educating the buyer and being there to answer any questions and concerns, the buyer appreciated me taking the time to inform, educate and share my knowledge.

So, what happened? The buyer felt comfortable with the home and decided to proceed with the application process.

Education is so important. I make it a point to continually educate myself and be a lifelong student. If I do not know the answer to a question or unfamiliar with a particular area of expertise, then I go out and find someone who does. I am always learning from the experiences of others as well as my own experiences.

Knowledge is power and that power is leverage. Leverage allows you to accelerate and move ahead faster than people who do not have the knowledge.

Wednesday, April 23, 2008

Mobile Home Conference

I recently attended my 2nd mobile home conference. It was pretty neat to see some familiar faces and meet some new people in the business. I did learn a few things the second time around.

Looking back a year ago when I attended my first conference, it was very overwhelming and exciting with the amount of information I had learned. This year, I felt more relaxed and found it easier to understand concepts that were above my head the first time around.

What I've learned after talking to people who are actively investing and learning various investing avenues, is to keep the big picture in mind. In reality, the whole point of investing and creating a passive income for me is to free up my time to be able to do other things. I definitely do not want another J.O.B.

So, in talking with a couple fellow investors I have come to find an investment vehicle that will allow me to have a life without much involvement from my end - mobile homes. When I first started investing in real estate, I think my goals were so big that it was so hard to attain and keep my involvement at at minimum.

Honestly, I like keeping my operation small. It gives me complete control. I know a fellow investor who runs a pretty big operation with a portfolio of a couple 100 unit apt buildings, mobile home and RV parks. Every time I see this investor, he's always so stressed out and seems to never have time to do anything except work. Managing larger portfolios involves managing more units and more people. I really do not want to have that kind of life where I am working all the time and have no time to do other things. Its just not for me.

At the conference, I saw another fellow investor who started out doing these small mobile home deals. He did 45 of them until he finally quit his job. Recently, he just finished a turn around mobile home park project - 185 spaces. He had to move his family out of state, live near the park, and it took 3 years of his life. After talking with him again this year, he told me what he missed about doing the small mobile home deals was the time he had once after he put the deal together. He could move on to the next deal and the passive income came in without him being there.

He gave me some good advice and told me if I'm happy doing the small mobile home deals and they are allowing me to free up my time to do other things, just to continue with that and build up passive income with each deal.

Another one of my fellow investors told me that he went back to investing in single family homes in nice areas because he just did not enjoy managing apt units. He told me the biggest issue for him when he owned his apt building was not having the time to do other things. He was constantly receiving calls about the units needing this and that - it was a headache.

All in all, I've decided to continue investing in mobile homes and just building up passive income. Maybe someday I will look into other investment vehicles. Or, maybe I will just sit back, relax, and enjoy the time I have created by investing in mobile homes.

Saturday, April 12, 2008

Finding Buyers

When it comes to finding buyers, its more of an art than a science - aka "trial and error."

There are 2 types of buyers out there - the serious ones and the not so serious ones.

Serious buyers are more concerned with the area they are looking in than the price of the home. Location, location, location. Sure, they do want a home that is affordable - that is your job to provide affordable financing. Though, the emphasis when they speak is on the location and not the price of the home.

Not so serious buyers will just ask about the price of the home without any or minor mention about the area. With the not so serious buyers, my recommendation is just to answer their questions and try to move on to the next call asap. Don't waste too much time on these people. These buyers are more interested in price and are looking for a good deal. If you spend time with them, they will try to get as much as they can out of the deal and you will feel exhausted. Even worse, you may end up with a buyer who wlll default.

It is a waste of time to spend all your time and energy on one buyer. When people call, you'll get a feel for the right type of buyer by listening to their words and the types of questions they ask.

But, talking on the phone is merely the first step. DO NOT, I repeat DO NOT meet with anyone who has not first driven by the home. Instruct everyone that you speak to drive by the home first before you set up an appointment to see the inside. Why?

Remember, actions speak louder than words. Serious buyers will drive to the home and check out the area. Matter of fact, most serious buyers who call have found you through the sign in the yard - not your marketing elsewhere. Serious buyers are already scouting the areas they are interested in. Not so serious buyers do not.

So, how do you figure out who the serious buyers are and the not so serious? Experience.

As in business, there's a difference between theory and what really works in the real world. To really learn, you must learn by doing. So, what does this mean? It means taking calls personally even though your phone is ringing every 5 seconds. Yes, this will happen. Be prepared. It means driving to the home to show it to the people who sound serious on the phone and have taken the extra step of driving by the home. Even if this means doing this repeatedly until the home is sold.

Once you have showed the home, instruct the buyers who seem serious the next step - filling out the application. Now, this is where you can weed out the real serious buyers from the not so serious ones. How? The really serious buyers will take the time to fill out the application and PAY the application fee ASAP. I give them two applications - one for the park and one for me. They have to pay the park's application fee but not mine. If they fill out both applications ASAP and pay the park's application fee, then I know I have a serious buyer. I tell everyone who fills out the application that they have to go through the application process. Based on the applications received, I pick the one I feel most qualified and most comfortable working with.

Believe me, it takes time to learn how to read people - it's a skill in itself. I've been through it both on the buying and selling end. Every deal will involve the same steps but I learn something new every time. This business works but with all things you gotta do the work to get where you want to be.

Monday, April 7, 2008

Taking Action

"If you want to get things done, sometimes you've got to do it yourself."

This rings so true in running a business. Either you do it yourself or you get someone else to do it for you. But, what happens when over and over and over again, things do not get done by the very people who you count on to get things done? Well, then you either do it yourself or get someone else to do it.

What really gets to me is when people say they are going to do something but never end up doing it. Now, I can go on and on and lay blame on people. But, in the end it's not going to help achieve the end result - getting the task at hand done.

I'm going through this right now with a minor rehab. It's a case where the park manager has offered to help with many aspects of the rehab. Problem is promises get made and things do not get done. I think the park manager has good intentions of helping but at the same time - time is money. And, I've got a lot of money riding on this project.

Instead of laying blame I had to go out and take action. One of the things that needed to get done was replacing the flooring in the master bathroom around the toilet. The flooring was old and very unstable, not safe to use.

So, I called my handyman and he said he'd be able to replace the floor but could not take out the toilet as that is a job that requires more skill for someone such as a plumber. The great thing about my handyman is that he knows what he can do and knows what he cannot. That is one thing that I've learned about hiring people - the good ones know their capabilities and stay away from things that are foreign to them.

In turn, I called my plumber and he agreed to remove the toilet so that my handyman could start work on replacing the floor. After my handyman finished the job, my plumber said he'd be able to put the toilet back.

Well, my handyman finished the job as scheduled. So, I called my plumber but he was well on his way to Mexico to go out of town. I had no way of reaching him as his cell phone coverage did not pick up.

What to do? I was stuck with a new floor in the bathroom and a toilet needing to be put back in its place. Well, I had to do something as people were anxious to see the house and I had not made it available to show due to the rehab work.

So, I bring this issue up with the park manager. She offers to call her plumber and tells me if he can't do it, then her husband who does fix-up work can. Well, to make a long story short the plumber never gets back to her and her husband got sick. This dragged on for a week.

So, I had to make a decision and I had to act fast. With one last attempt, I called my plumber and guess what? He just got back. I told him the problem - he apologized. And, now he is going to put back the toilet where it belongs.

What is the moral of this story?

I guess what I'm trying to say is not to depend too much on one person for all your contacts. I've tended to do that especially with the park managers. I think they have all the right contacts because they deal with fix up work and issues in the park all the time. Yes, that's good. But, I also have to have my own team and be able to make decisions when the issue arises.

So, I've began to make contractor contacts by residents of the parks in addition to park managers. And, a lot of times the residents of the park do contract work for a living - go figure! So, I've made it a habit to talk to the residents in the parks I work with and ask them who they've used for contract work on their own houses. Also, I scout the bulletin boards at the parks I work with for contractor cards. I spend time calling these contacts. I get a feel for what they do and their experience because I never know when I may need someone quick when one of my other contacts cannot perform work I need to get done. I've learned it's always good to have backup people lined up just in case so you don't rely on one person to provide you with all the contacts as I have with the park managers.

By taking action, I have avoided inaction. It is better to take action than not to act at all.