Monday, August 31, 2009

Hiatus

The blog will be on hiatus for the next few weeks. Will be back soon. Stay tuned!

Friday, August 28, 2009

Mobile Home Park Maintenance Inspections

(Note: Inspections and regulations for mobile home parks will vary and depend on your local area laws. Check with your local government housing authority with any questions regarding inspections and local regualations).

Very informative video on mobile home park maintenance inspections. For those interested in working in and/or buying a mobile home park, it definitely has some good information. Check it out!

(p.s. If you're interested in reading more about the pros and cons of buying a mobile home park, check out this article).

"This video is designed to assist mobilehome park residents and owners prepare for a Mobilehome Park Maintenance Inspection (MPM) and points out common violations discovered."



Video Link

Thursday, August 27, 2009

Investing 101: Learning the Market

By far, knowing the market is the most important key to success in investing in mobile homes. If you do not know your market, you will not be able to find a good deal. Why?

It's simple. If you do not know your market, you will not be able to see a deal if it comes across your desk because you do not know the values and prices of what people are willing to pay for that particular home in that particular area. Not knowing the market is dangerous and can lead to bad deals and/or missed opportunities.

So many times, I get folks telling me they can't find any mobile homes for $3,000. They tell me they've been looking in the newspaper, been driving around their area looking in parks and surrounding neighborhoods, online websites, etc. But, for some reason they still can't find a deal.

The reason they can't find a deal is because they do not know their market. How do I know this?

As soon as I hear they are looking for a mobile home for $3,000, I know they are not familiar with their market. If you knew the market, you would be able to spot that there may be different ways and different price points to make things work.

For example, what if a lead came across your desk for a mobile home and the seller wanted $10,000? Well, if you are looking for mobile homes for $3,000 you might just pass on that lead. Then, someone like me (who is knowledgeable with the market) knows that a $10,000 home in that area could sell for $25,000 owner financed. Or, I may have a cash buyer who is looking to spend $15,000 for a mobile home to put on their land.

So, you see the person looking for $3,000 mobile homes lost out. If that person knew the market and the demands of the market, they may have been able to put together a deal. Instead, it passed them by.

This is one of the reasons why I believe a lot of folks tell me they can't find any deals. They just do not take the time to learn the market.

In my experience, I find a lot of people just starting out are very impatient. They want to find a "deal" right away. They rush out looking for mobile homes at a certain price point, say $3,000, and spend all their time and effort doing this. Then, they say that they can't find any deals and say mobile home investing does not work.

I'm going to be honest with you, this business takes time. Success does not happen overnight. But, it can happen with enough persistance and belief that you can achieve your goals.

When I first started out, it took me 6 months to learn my market. Then, it was another 2 months until I did my first deal. In total, it took me 8 months to learn my market and accomplish my first deal.

To a lot of people, that seems like a long time. But, it paid off because I know my market very well now. The time I took to learn it has made me better aware of the types of deals I can put together based on the demands of the market.

If you are interested in investing in mobile homes, take the time to learn your market. Do not be impatient. It's an investment in you and your future.

By learning your market, you will obtain the knowledge to help you spot a deal. Kiyosaki once said, "You do not see with your eyes, you see with your mind."

If you have the knowledge in your mind (by knowing your market), that knowledge is power. And, the power of knowledge will lead to your success.

I'm going to leave you here with a video from John C. Maxwell that inspired this post.

Happy Investing!



Video Link

Tuesday, August 25, 2009

Terminology Tuesday - Cinder Block



(A stack of rectangular concrete blocks). Source: Wikipedia


(Note: I think it's important to know the terminology and words used when learning any new business including mobile home investing. I came up with 'Terminology Tuesday' as a day to go over the terminology used in the mobile home business. It's important to know the terminology when talking to people in the business so you're all on the same page).

As defined in Wikipedia:

"Cinder block may refer to:

In the United States, a concrete masonry unit (CMU) — also called concrete block, cement block or foundation block — is a large rectangular brick used in construction. Concrete blocks are made from cast concrete, i.e. Portland cement and aggregate, usually sand and fine gravel for high-density blocks.

Sizes and Structure

Concrete blocks may be produced with hollow centres to reduce weight or improve insulation. The use of blockwork allows structures to be built in the traditional masonry style with layers (or courses) of overlapping blocks. Blocks come in many sizes. In the US, the most common size is 8 in × 8 in × 16 in (20 cm × 20 cm × 41 cm); the actual size is usually about 3/8 in (1 cm) smaller to allow for mortar joints."


Definition Link

Cinder blocks (aka concrete blocks) are used to support a mobile home. Concrete blocks are placed underneath a mobile home for support.

When moving a mobile home, the mobile home mover will attempt to remove the concrete blocks from underneath the home to prepare for the move. Once the mobile home has been transported to its new location, the concrete blocks will need to be placed underneath the mobile home again for support.

One thing you want to be sure when negotiating a move with a mobile home mover, is to see if the price quoted includes removing and replacing the concrete blocks. Some mobile home movers will only quote you a price to move a home, but may not include the removing and replacing of the concrete blocks for the move and the new location of the mobile home once transported.

Here's a video showing a mobile home move in preparation. In the video, you'll see the concrete blocks being removed from underneath the mobile home to get ready for the move. Check it out!



Video Link

Friday, August 21, 2009

The Realities of Real Estate

With the changing market of real estate, I thought I'd post up this very entertaining yet informative video on how different people view the value of real estate. This is definitely worth a watch. Enjoy!

"Everyone in the real estate transaction sees the home differently."



Video Link

Thursday, August 20, 2009

Investing 101: Finding Buyers

I thought I'd address the age old question a lot of folks have been asking me lately, "How do I find buyers?"

If you are investing in mobile homes and plan to buy and hold the paper, the question is not, "How do you find buyers," but "How do you find the right buyers?" There's a big difference. Why, you ask?

The difference is that if you find the right buyers, you are working with people who are in it for the long haul. You are working with people who really do want an affordable place to live and call their own. By having a place to call their own, they will take care of it because it is theirs. Why would they ruin something that they own? You are working with homeowners.

Real homeowners
are people who love their home so much that they are willing to do anything to save it. If something happens to them financially, they will do all they can to either try to work with their lender and/or get another source of income to help pay for their home. The mindset is that they do not want to lose their home.

On the other hand, if you are just out there to fill your homes and find buyers just for the sake of it - you are not working with people who are in it for the long term. You are working with people who may not really want a place to call their own. Actually, they may be running away from someone or something, and may just need a place temporarily.

They may tell you they really need a place and may even suggest they want a place to call their own. However, in reality they just need shelter for the time being. Are they looking for a long term situation? Maybe. Maybe not. And, that "maybe not" can be the start of a headache for you.

For example, I had a buyer who applied recently. Basically, he told me he really needs a place to call his own and wants to get into something asap. He told me he's living with relatives, going month to month right now. Told me that he's got a good job - been working at the same job for 10 years. But, his credit is not so good.

Ok. So, I wonder if he's got such a great job then why is his credit shot? Why has he had trouble paying his bills to make his credit not so good? I wonder.

So, he applied for the home - filled out the application and submitted all the required paperwork. The park did a credit check on this individual and yes, his credit was not so good. He had a very low credit score.

From the credit report, what I found out was that this potential buyer was 90 days past due on a home mortgage. He failed to mention this to me. In turn, the park manager called him up and told him what we found. It all came out over the phone.

The potential buyer told the park manager that he was currently in default for the home that him and his wife own - they are in the process of getting divorced. He told the park manager that he needs a place asap as the bank is going to be foreclosing on them soon and he's afraid he may be locked out of his house.

So, the park manager asks him straight out, "Are you planning to walk away from the home?" The potential buyer says "yes."

That's all I needed to know to make my decision. This was not someone I wanted to work with. Why? If this person walks away from an obligation, especially his home, what makes me think he won't do the same thing to me? Enough said.

So many times, I hear investors say how they just need to find a buyer(s) for their homes and just want to get them filled. They tell me they don't care and as long as they are getting paid, they're happy. Then, they tell me it's ok because if the buyer(s) defaults, then they can go ahead and take back the home and do it all over again. Simple as that, right? Not in reality.

In real life, if someone defaults and you put the wrong buyer in there with the wrong mentality (by wrong mentality, I mean someone who is not willing to cooperate and/or work with you), it could turn out to be your worst nightmare. And, by nightmare I mean those nightmares that haunt you for the rest of your life.

Have you ever heard the saying, "It's better to have a vacant house than it is to have a problem tenant?"

According to Murphy's Law, "Anything that can go wrong will go wrong." So, it's better to do things right the first time - find a buyer(s) who will take care of the home and really wants a place to call their own.

This is a long term investment - your investment. If you gamble by putting the wrong buyer(s) in the home, you are putting your investment at risk as well as your sanity. It's better to be safe than sorry.

I'm going to leave you here with a video from John C. Maxwell that inspired this post.

Happy Investing!



Video Link

Tuesday, August 18, 2009

Terminology Tuesday - Polybutylene Pipe (Aka "Grey Pipe")




(Note: I think it's important to know the terminology and words used when learning any new business including mobile home investing. I came up with 'Terminology Tuesday' as a day to go over the terminology used in the mobile home business. It's important to know the terminology when talking to people in the business so you're all on the same page).

As defined in Wikipedia:

"Polybutylene is a thermoplastic Polyolefin. It is created by polymerizing butylene. It is a semi-crystalline thermoplastic, and is also known as polybutene-1. It should not be confused with polybutene, a low molecular weight oligomer with a different repeat unit.

Controversy

The suitability of polybutylene for use in plumbing is controversial. Polybutylene plumbing was used in 6 to 10 million homes built in the United States from 1970 to the mid-1990s. Problems with leaks led to a class action lawsuit, Cox vs. Shell Oil, that was settled for one billion dollars. Polybutylene plumbing is still widely used in Europe and Asia.

The material oxidised when used in hot water systems, developing longitudinal cracks which eventually punctured the walls leading to floods and damage to properties. Many acetal resin fittings also cracked, a problem caused by chlorine attack. Even the low concentration (ppm) of chlorine used in most potable water supplies for purification was enough to initiate cracking."

Definition Link

Polybutylene pipe is usually referred to as "grey pipe" because it is grey in color. The majority of mobile homes built before the year 2000 will usually tend to have it.

In my experience, most sellers I have dealt with have taken out the old grey pipe and replaced it with PVC pipe - usually white in color. However, there will be cases where "grey pipe" still exists in the mobile home.

When you go to inspect a mobile home, be sure to look under the sink - see what kind of piping they have for each room with a water supply. Run the water from the sink and test it out. Look under the sink to see if there is any leaking.

Be on the lookout for a bucket under the sink near the piping - this will signal you that there has been prior leaking. If you see "grey pipe," chances are there will be cracking and/or future cracking down the road. These are issues that will need to be addressed in negotiations.

Happy Investing!

(If you enjoyed this post and would like to read more about mobile home repair, check out these books. Enjoy!)

Friday, August 14, 2009

This Is What Happens When Lot Rent Isn't Paid

I thought I'd post up this video on what happens when lot rent isn't paid. Check it out!

"This is a video of a guy who hadn't paid his pad rent."




Video Link

Thursday, August 13, 2009

Investing 101: Real Estate Is A People Business

(Note: Image courtesy of LumaxArt)

"Everyone always wants some new things. Everyone likes new inventions, new technology. People will never be replaced by machines. In the end, life and business are about human connections."

Michael Scott, The Office

With the evolution of technology today, it's very easy to get lost in all the "noise" of the Internet superhighway. Right now, there is a lot of hype out there about social media and its usage regarding platforms such as Twitter, Facebook, MySpace, LinkedIn, etc.

With all the hype and talk about social media, it's very easy to get confused and "lost" in what its true value can bring. Social media is a tool that can help build your business. Notice I said "tool," not substitute.

A lot of people are under the impression that social media is a substitute for doing business - it's not. There is no substitute for good old fashioned networking - human interaction face to face and/or via the telephone.

Sure, you can network with people online and build a great Twitter, Facebook, MySpace, etc. following. However, when it comes down to doing business you have to ask yourself the question - Is this really helping you and your business get to your goals? If it's not, then you have to change gears.

So many times, I get folks telling me they can't find any deals. They tell me they've been looking and looking and can't find any mobile homes for $3,000. They tell me they've been looking in the newspaper, been driving around their area looking in parks and surrounding neighborhoods, online websites, etc. But, for some reason they still can't find a deal.

Well, I'm here to tell you - you won't find a deal advertised in the local paper and/or online. It just doesen't work that way. Deals are made through negotiating - not through advertisements. Probably every single one of my deals, the seller started at full retail price. Let's face it - most people start there because no one wants to get ripped off. It's just human nature.

Where the deals come in through negotiations is really getting to the root of the problem(s) of the seller and getting to know each other by creating win/win situations. When I meet a seller, I have a very casual approach. I do not do any hard selling at all. I let the seller talk. I listen and see what exactly the seller wants to do and why they want to do it. It's that simple.

Ok, so if it's that simple - how come it's so hard for people to make deals? The reason it's hard for people to make deals is because they come across to the sellers like they just don't care. How is this?

Well, most investors come off as "vultures" because they try to do all the talking and tell the seller what they should do - tell the seller what their home is worth and what they can expect them to sell it for. Then they go on and try to scare the seller saying that no one's going to buy their house for that price. This is a big turn off for sellers.

Let's face it - no one likes to be bossed around. If someone pushes, we push back. It's just human nature. This is why it's hard for most investors to make deals - it seems like they just don't care. So, what happens is the few who do make the deals come out the winners because they are the ones who demonstrate to the seller that they do care. And, if someone shows that they care for you - they will in turn care for you back. It's just human nature.

Right now, I'm working with a park - the park manager is basically kicking out all of the investors who bring bad business to the park. What's happening is these investors just let anyone into their mobile homes and don't really take into any consideration of the park and the obligation to pay lot rent.

Their attitude is they really don't care if their buyers and/or tenants don't pay lot rent - all they care about is getting their own payment and/or rent. I was actually in the office hanging out with the manager one day when a tenant came into the office. She told the manager that she just couldn't pay the lot rent and that the investor who owner financed her home told her she doesen't have to pay lot rent as long as she pays the mobile home payment she's ok. The park manager blew up and got really mad.

So, now the park manager is asking these investors to leave her park. They will have the option of either moving their homes (with their buyers and/or tenants) or they will have to sell their homes. (Note: This has been a concern for many people wanting to get into mobile home investing. Yes, I have heard of other investors who have been kicked out of parks and it's a possibility if you bring bad business to the park. For me, I bring good business to the parks and find quality, long term tenants. In fact, the park manager and owners want me to keep doing business in their parks. As long as their lot rents are getting paid, they are happy).

In addition, I'm also working with the park manager for some of the park owned homes as well as some of the bank owned homes in the park. For most parks, they just want their lot rent paid. Doing owner finance mobile home deals is not their forte. So, what happens is they may have to do them because they get stuck with some of these homes and they end up going bad. They would rather work with someone who knows how to fill homes with good quality buyers and/or tenants than have to fill them themselves.

So, you see - it's all about human interaction and creating win/win situations for all. Most investors out there are out to create win/lose situations. Sure, they may be able to snag a deal or two but they won't last for long.

As Seth Godin points out, the only way you can get people to do business with you is to have them talk about you. No amount of advertising and marketing can change the way people see you. If you build your business with an honest reputation of helping people and creating win/win situations, people will spread the word and refer others to you. It's as simple as that.

The reality is most investors put dollars before people. When you put money before anything else, you will lose. You will lose out on deals, long term relationships and you will lose out on business. Money is just short term.

Building relationships and a reputation for being honest and helping people is long term. In the end, business involves people. And, people never go out of business.

I'm going to leave you here with a video from Gary Vaynerchuk that inspired this post.

Happy Investing!

(If you enjoyed this post and would like to read more about negotiating, check out these books. Enjoy!)



Video Link

Tuesday, August 11, 2009

Terminology Tuesday - Mobile Home Skirting

Mobile Home Skirting is material used to cover up the exposed area of a mobile home which usually goes around the lower bottom portion of the home.

There are many different types of materials you can use to "skirt" a mobile home including vinyl, wood, cinder block, brick, fiberglass, etc. The most common material used is vinyl skirting which is usually white in color.

Most mobile home parks will require mobile homes to be fully skirted. When moving a mobile home, one of the cost considerations is purchasing new material to re-skirt the mobile home once in a new location. (If you're interested in getting an idea of what's involved when moving a mobile home, check out this video).

If you're a handy person, you could always connect with a mobile home mover in your area and purchase and/or ask for used skirting from their mobile home moves. In most cases, mobile home movers will just rip out the skirting and throw it away when getting ready to do a mobile home moving job. If you're handy with tools, you could always learn how to remove the skirting and do that part of the job for the mover in exchange for the used skirting.

Here's a video so you can see what mobile home skirting looks like and the process to keep it in tact.

(p.s. Warning: The music is a little hokey but it's a good video overall on the subject).

Happy Investing!



Video Link

Friday, August 7, 2009

Trailer Park Life

Thought I'd post up this very informative video from Jolene Sugarbaker, "The Trailer Park Queen", as she fills you in on the trailer park lifestyle. Check it out!


Video Link

Thursday, August 6, 2009

Investing 101: The Importance of Learning A System

"How do I get started?"

This is probably the most frequently asked question I receive from folks looking to get started investing in mobile homes and/or real estate. It's a pretty common question.

Many people want to get started investing in mobile homes and/or real estate but just don't know which direction to go. There are many ways to make money in mobile homes and/or real estate. Though, I'd like to point out that what you do will depend on your overall financial and personal goals for yourself.

I've received many different types of feedback from folks who tell me this investor told them to do this and/or this investor told them to do that. In fact, there seems to be an ongoing discussion among many real estate investors regarding which is the best way and/or method to invest in real estate.

My answer would be - it doesen't matter. What matters is what's best for you and your goals. If you're happy with your life and plan to work until you're 55 and are just looking for a place to park your money for retirement, that's ok. On the other hand, if you're unhappy with your 9-5 job and looking to quit and want to build up a stream(s) of income to replace your current income - that's ok too.

You have to do what's best for you. There will be a lot of people out there who will try to convince you to invest in this and/or invest in that, or tell you to do this and/or to do that. But, you need to keep in mind what your own goals are in life. They may be similar or different from others. That's ok.

Once you have your goals down, then you will be ready to start working towards them. Take action and make things happen.

When I first started out in real estate, I knew what my financial goals were and I made a plan to achieve them. For me, the problem was choosing a system and sticking with it. As many people know, there are many ways to make money in real estate.

With all the different systems out there, I tried to learn all the systems. Why? I figured it would be best to know them all because I didn't want to miss out on a deal if it came across my desk. Big mistake. Ever heard of the saying,"Jack of all trades, master of none?" That was me.

I ended up doing a couple deals here and there. I found some deals for investors using every single technique out there - subject-to, lease options, seller financing, etc. Then, I got into wholesaling REOs. And, eventually landlording. What happened was that I was burnt out - big time.

I didn't feel fulfilled in what I was doing. I was burnt out from all the marketing, taking calls, driving, networking with other investors, etc. At one point, I was working with 30 bird dogs. It ended up being way too management intensive - talk about burn out! I felt like I had no life. Literally. I had no energy to do anything else. Everything was about real estate - I felt like I was chasing every deal possible out there and had no time for anything else. I wasn't living life anymore - I was just working too hard.

Finally, I had enough of it. I took some time off to reflect and think about the kind of life I really wanted. I realized that I was no longer doing things that I enjoyed anymore. Ironically, the whole point of entering into real estate investing was for me to have time to do the kinds of things that I enjoyed. This was not it.

So, I did some more reading and soul searching. And, I stumbled upon mobile home investing. What I really liked about mobile home investing, was the philsophy behind it - having the time to do the things you like doing. Also, I felt like I could relate to Lonnie Scruggs, "The Godfather" of mobile homes, because he was a burned out landlord when he started as well.

Upon spending more time reading about mobile home investing, I soon realized this is exactly the type of system that would give me more time to do the things I enjoy. For me, it was all about lifestyle. I did not want to be a landlord anymore, and I didn't want to spend hours upon hours constantly looking for deals for other investors and/or in a rehab project. That just wasn't me.

Mobile home investing was perfect. So, I dove into the wacky world of mobile home investing. And, here I am. It's much more fun. I can truly say that I enjoy what I do now. I think it's mainly because it allows me to have more free time which allows me to do the things I like doing and above all - enjoy life.

I think what really motivated me was the whole lifestyle mobile home investing supports. Once I made up my mind to pursue mobile home investing, it was very important for me to learn the system and stick with it. This is a very important key to success.

What I've learned is that it's better to do one thing very well rather than a lot of things and be mediocre. Most successful people out there are successful because they do one thing very well. For example, when we think of Johnny Depp - we think of him as an actor. He's very good at acting. Also, when we thing of Tim Burton - we think of him a a director. Both of them do one thing very well.

This can be applied when learning a system and investing in real estate. Many successful real estate investors I know are successful because they know a system very well. The reason they know it very well is because they stick with the system and do the same thing over and over again.

Many times new investors just starting out tell me they want to do so many things (i.e. mobile home investing, wholesale REOs, rehab, landlording, etc). These are all different systems which involve different skill sets and knowledge. Each system requires both time and money invested to do the work. If you split up your time trying to learn many systems, you won't have the same amount of time to devote your attention and energy as if you just tried to learn one system.

By learning one system and applying your knowledge to real life situations, you get better at what you do. I know what you're thinking, but how about the other deals that come my way? My answer is: I pass on them. Why? It's a much more efficient use of my time to focus on mobile home investing since I know it very well, than to go out and chase every type of deal that comes my way. Also, I always keep in mind why I decided to focus on mobile home investing above all the other real estate systems out there - it's the lifestyle. If I were to switch gears and learn a new system(s), I may not have the same lifestyle that I enjoy now with mobile home investing.

The great thing about America is that we have choices. I made my choice to learn mobile home investing and stick with it. I chose it because it fit my personality and the kind of lifestyle I want to live. Everyone is different and may have different goals. But, we all have a choice. Now, you can make your choice too.

I'm going to leave you here with a video from Seth Godin that inspired this post.

Happy Investing!

(If you enjoyed this post and would like to read more about the importance of business systems, I highly recommend this book. Great read!)



Video Link

Tuesday, August 4, 2009

Terminology Tuesday - Mold Growth, Assessment and Remediation



(Although this home suffered only minor exterior damage from Hurricane Katrina, small leaks and inadequate air flow permitted this mold infestation). Source: Wikipedia

As defined in Wikipedia:

"Causes and Growing Conditions
Molds and fungi are found everywhere inside and outside, and can grow on almost any substance when moisture is present. Molds when they reproduce make spores, which can be carried by air currents. When these spores land on a moist surface that is suitable for life, they begin to grow.

Assessment
The first step in an assessment is to determine if mold is present. This is done by visually examining the premises. If mold is growing and visible this helps determine the level of remediation that is necessary. If mold is actively growing and is visibly confirmed the need for sampling for specific species of mold is unnecessary.

Remediation
The first step in solving an indoor mold problem is stopping the source of moisture. Next is to remove the mold growth. Common remedies for small occurrences of mold include:
-Sunlight
-Ventilation
-Non-porous building materials
-Household cleansers"

Definition Link

When going out to inspect mobile homes, mold is very common in damp areas. The key is to assess the problem - stop the moisture from the affected area(s) and remove and kill the mold. Here is a short video:

(Note: If you're ever unsure about a particular mold issue, it's best to always seek out assistance and get an opinion from a professional mold remediation company).




Video Link

(If you're undecided about going out to do mobile home inspections yourself, check out this post).

Happy Investing!

Friday, July 31, 2009

Words of Wisdom From Lonnie Scruggs

Here are some words of wisdom from Lonnie Scruggs, "The Godfather" of mobile home investing. (I highly recommend reading his book). Enjoy!



Video Link

Wednesday, July 29, 2009

Passion Vs. Money: Which Road Are You Following?


Thought I'd touch on these two subjects today - passion vs. money. Which road are you following?

Time and time again, I see a lot of people get into real estate investing and say they just want to make a lot of money. People get drawn into the "hype" and illusion that real estate is a "get rich quick" plan. In reality, it's not.

It takes work, hard work to run a real estate business. It takes skills and continuous learning and education. It takes time. Success does not happen over night. Those that have said they have made a lot of money in real estate over night, either got lucky and/or they are not telling the entire story.

Moreover, it's about dedication to the business and to yourself. Too many times I've heard real estate investors ask, "What's the best technique to make the most amount of money?" Or, "How can I make the most money with the least amount of work?" When I hear and meet these people, I know they are only doing it for one reason - money. And, you know what?

Those that work for money will let money control them. Money is their God. They do not know how to create money, manage money, and take care of money. In turn, they will always lose money and will be a slave to money for the rest of their life.

I've known a lot of real estate investors, including many rehabbers and real estate agents, who have made a lot of money in real estate. Every year, they make their six figure income and by the end of the year they are broke wondering how they will ever pay their income taxes. The money they have made is lost and spent.

As each year passes, I hear the same stories over and over again. And, at the end of the year they are scrambling to find one or many real estate properties to buy and hold (despite negative cash flow and/or breaking even) just to offset their tax situation. This is a never ending game - it's a losing battle.

I'm here to say that the best return on your investment is the investment you put in yourself. Life is short - we only have one life to live. So, why not live a life of happiness and pursue your passion?

Money is not everything without having anyone to share it with. Remember Ebenezer Scrooge? He had all the money in the world yet had no one to share it with.

Too many people I know have pursued money over their passion. Many of these people have ended up divorced, broke, and unhappy. They have neglected everyone who has truly cared about them including their friends and family because they value money over everything and anyone else - they are truly alone. Is this really the kind of life you want to live?

You have to really sit down and assess your goals and what you really want in life. Get to the "why." One of the most frequently asked questions I get is, "How do I get started?" It all starts with you and what YOU want. Not what everyone else wants for you.

Most new people who get into real estate investing want to do big things. They want to buy a large apartment building, a mobile home park, and/or commercial real estate building. Though, many of them have never done a real estate deal in their life and/or do not have much experience in the real estate niche of their choice. This is dangerous.

It's better to start out small and grow slowly getting a taste of the business to see if it's for you, than to get stuck with a large deal only to find out this is not what you wanted to get into. Trust me, it happens.

That is why when people ask, "Why even do a small mobile home deal? I'd rather buy a mobile home park," I know they are entering dangerous territory. Without the experience, a person can get really hit hard taking on things that are in over their head.

In the end, passion will always win over money. If a person is more passionate about something, then that person will always beat the one who is working just for the money. Always.

I'm going to leave you here with a video by Gary Vaynerchuk that inspired this post.

Happy Investing!



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Tuesday, July 28, 2009

Terminology Tuesday - Mobile Home Park



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(Note: I think it's important to know the terminology and words used when learning any new business including mobile home investing. I came up with 'Terminology Tuesday' as a day to go over the terminology used in the mobile home business. It's important to know the terminology when talking to people in the business so you're all on the same page).

As defined in Wikipedia:

"A trailer park is a neighborhood consisting of an area of land where travel trailers rest. The term may also be used to refer to mobile home parks or manufactured home communities.

In the United States, tornadoes and hurricanes often inflict their worst damage on trailer parks, usually because the structures are not secured to the ground and their construction is significantly less able to withstand high wind forces than regular houses. However, most modern manufactured homes are built to withstand high winds as well as a mainstream home, using hurricane straps and proper foundations."


Definition Link

Generally, the park will charge lot rent to occupy each lot in the park. There are many pros and cons to investing in mobile home parks. For more info, check out this post.

Happy Investing!

Friday, July 24, 2009

Top 10 Time Management Books

In order to run a business, it's very important to be a good manager of time, money, and people. Time management is very important as it allows you to manage your time more efficiently and prioritize.

In order to make better use of my time, I read time management books on a regular basis. Then, I use what I learn in the books and apply to real life situations.

Here's my Top 10 Time Management Books that have helped me. I hope it will help you too!

1. The 4-Hour Work Week
2. Getting Things Done
3. The 7 Habits of Highly Effective People
4. The 80/20 Principle
5. Get Everything Done: And Still Have Time to Play
6. The Time Trap: The Classic Book on Time Management
7. The 25 Best Time Management Tools & Techniques
8. Never Check E-mail In the Morning
9. Time Management From the Inside Out
10. Successful Time Management For Dummies

Wednesday, July 22, 2009

Investing 101: Mobile Homes Vs. Mobile Home Parks

Recently, I've been getting a lot of mail from people who are new to the mobile home business asking me if it's a good idea to buy a mobile home park. They've told me they've heard that mobile home parks are great investments - they have read articles and have gone to real estate forums.

Folks, the only way to learn a business is to experience it first hand. If you're not familiar with the mobile home business, the best way to get involved is to start small - do a deal or two and see if you like it. I say this over and over again. A lot of times, people get excited about the dollars and the returns they hear about when they don't think about the big picture and what's involved.

By doing a small deal, you will learn the basics of mobile home investing. From there, if you enjoy the business and truly want to pursue it in the future then you can go on to do bigger deals. But, if you start by getting into a big deal from the get-go and have no idea how to run a park, manage a park, hire people, buy and sell homes, market knowledge, etc. - then you will find yourself "stuck" and a good investment can easily turn into a bad investment if not properly managed.

I'll give you an example. I knew an investor who owned a few single family homes. He never did a "Lonnie" deal in his life. Though, he was convinced that mobile home parks was one of the best investments. So, he took a mobile home park bootcamp and went through the training. After the training, he bought his first park - a 60 space mobile home park.

After a few months, things were going well until one day he had a problem - a big problem. Some waterlines (including the main waterline) broke in the park. He had it looked at and found out it would cost him $60,000 to get it fixed. Well, he didn't have $60,000 cash laying around in his bank account. So, he ended up refinancing some of this single family homes and pulled out the cash from there. So, a few more months roll by and he gets a problem with his septic tank - this time it would cost him another $25,000. This time he has to take a home equity loan against his own house.

Turns out, this investor had so many issues come up that he ended up selling the park for a loss - it cost him too much time and money since he did not know the mobile home business first hand. When he bought the park, he did not have a team in place and was not prepared for the issues that came up. He also had a hard time filling his park and finding homes since his market knowledge was limited.

Here's what can happen when these infrastructure issues come up:



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Another investor I knew bought an 80 space park, again after taking a mobile home park bootcamp. The park was half full - this was a turn around project. She had never done a "Lonnie" deal either. Her experience was in rehabbing single family homes. Turns out, the spaces could only fit very small 12 feet by 50 feet homes - they do not make them this small anymore. She tried to find homes that would fit the spaces and was unsuccessful. Instead of re-spacing the lots as she did not want to do this as it would involve an entire infrastructure electrical upgrade, she decided to get mobile homes to fit the spaces custom made. Each home would be $12,000. Ok, problem solved right?

Turns out, these custom made mobile homes were only 1 bedroom. She tried marketing the homes for buyers but it was very difficult. She tried targeting the senior citizen market but soon found they too were picky and/or could not afford her prices as they were on a very fixed income. Like the first investor, she was not prepared for these issues that came up.

These stories are not meant to scare but to inform and increase awareness. It's much better and less risker to start off with a small deal than it is to get stuck with a big deal. If you make mistakes with a small deal, at least they are small mistakes. On the other hand, if you make mistakes with a big deal they can be big - huge and can possibly bankrupt you if you are not prepared.

I'll leave you with a story about The King, the Pawn and the Peon. I hope it will help you to see the importance of starting small and learning through your experiences. It is the small successes that will determine the large ones. And it is the small successes where I have learned the most.

Happy Investing!

Tuesday, July 21, 2009

Terminology Tuesday - Hitch



(Note: I think it's important to know the terminology and words used when learning any new business including mobile home investing. I came up with 'Terminology Tuesday' as a day to go over the terminology used in the mobile home business. It's important to know the terminology when talking to people in the business so you're all on the same page).

As defined in Wikipedia:

"A tow hitch (or tow bar) is a device attached to the chassis of a vehicle for towing or a towbar to an aircraft nose gear, or paired main gears. It can take the form of a tow-ball to allow swiveling and articulation of a trailer, or a tow pin and jaw with a trailer loop - often used for large or agricultural vehicles where slack in the pivot pin allows the same movements. Another category is the towing pintle used on military vehicles worldwide.

In the U.S. the vehicle attachment is known as the trailer hitch. Trailer hitches come in two main configurations: receiver type and fixed-drawbar type. Receiver-type hitches consist of a portion that mounts to the frame of the vehicle that has a rearward facing opening that accepts removable ball mounts, hitch bike racks, cargo carriers, or other hitch mounted accessories. Fixed-drawbar hitches are typically built as one piece, have an integrated hole for the trailer ball, and are generally not compatible with aftermarket hitch accessories."


Definition Link

Basically, the hitch (aka "tongue") is attached to the front of the mobile home and used to transport the home from one place to another.

If you plan on buying mobile homes and moving them, it's best to see if the hitch is in place. Otherwise, you will need to get a hitch welded on by a professional welder. Without a hitch, a mobile home cannot be moved.

Also, the hitch will typically add 4 feet to the length of the mobile home. For example, if you have a 16x70 foot trailer the length of the trailer itself will be 16x66 (70 feet minus 4 feet for the hitch = 66 feet). It's important to know this kind of information especially when moving the home to a new location to make sure you have enough space for the new lot/area.

Here's a video on a mobile home being moved - you can see the truck is pulling the home which is connected to the hitch. Check it out!



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Thursday, July 16, 2009

Entrepreneurs Can Change the World

Very inspiring video, check it out!



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Wednesday, July 15, 2009

Lot Rent Fees


I've had a lot of people ask me about lot rent fees and how much they should be in the parks and/or areas they choose to work. People have told me different prices of lot rents in their areas ranging from $75 per month on the low end, to $400, $500, and $650 per month respectively on the high end. Most recently, I've heard $1000 per month (per one of my "tweeps" @pmjohnson99).

So, what should be the target range of the lot rent for the parks you decide to work in?

The short answer - it doesen't really matter. Honestly, the amount of lot rent a park charges should not have a large effect on your decision whether or not to work in a particular park. Why not?

It's more important that you work in a park where you know the demand is there and you can find a buyer. I've said this before, it's very important to know your market. Each area is different - knowing your market and knowing who and what your buyers want, including where they want to live, is extremely important.

On my first deal, I was also concerned about lot rent. It was pretty high - almost $400 per month, this park had one of the highest lot rents in the area. Though, once I researched the market I got a feel for the demand in the area.

Driving around the area around the park, I could tell this was an area that was growing and had a lot of demand. I found out this park was in high demand - a lot of people wanted to live in this particular park. It was a nice park in an extremely good location. People wanted to live there and there was not much affordable housing in the area. There were apartments up the street that were almost at full capacity and the rents were steadily increasing.

So, I decided to move forward with the deal based on my market research and knowledge. Had I not done my research and known the area, it could have been a very risky deal as I would not know what I am getting myself into. If I did not know the market, I may not know what people are willing to pay for a home in that area and/or what types of features they are looking for.

Common mistakes people make who are not familiar with the market include overpricing and/or underpricing a home, asking for too high or too low of a monthly payment, not knowing what features people are looking for in a home in that particular area, selling "as-is" when most people in that area want things fixed up or vice-versa, etc.

All of these mistakes cost both time and money. And let's face it, time is money. That is why it's extremely important to know your market before you go into a deal. It's very dangerous to start investing without knowing your market.

Knowing your market is extremely important - I cannot stress it enough. Knowledge is power.

(If you would like to read more about getting started in mobile home investing, check out these tips).

Happy Investing!

Tuesday, July 14, 2009

Terminology Tuesday - Carpet Remnants



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In one of my last posts, I mentioned the importance of comparison shopping - becoming a more informed and educated buyer.

Lately, I've been dealing with contractors regarding some recent fix-up issues. One of the things I had done recently was replace new carpet in the living room of one of the trailers. The old carpet had some really tough stains - it just didn't all come out with the carpet cleaning crew. As a result, the home didn't show well as flooring, especially when someone first walks into a home, is one of the first things people notice.

Since I was just replacing the carpet in the living room, which is a very small area, my carpet guy suggested looking for a "remnant" (aka "carpet leftovers") for the job. Usually, carpet installers and places that sell carpet will have "remnants" or carpet leftovers, after completing big jobs - these "remnants" or pieces of carpet are too small for regular carpet installation jobs. So, they will sell them (or if you're lucky - give them away) to people just looking for a piece for a smaller carpet job. Usually, they will need to sell the "remnants" quickly as to free up space - this is where you can get a pretty good deal instead of paying for a brand new piece and/or roll of carpet.

Learning where to find and spot these deals will take some time. Though, it will save you money in the end. And, the money saved will quickly add up.

Here's a video on how you can make your own carpets/rugs and where you can find carpet remnants. Check it out!



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Sunday, July 12, 2009

Twitter Shout Outs Via TweetTube

For all the Twitter users out there, I just found out about Tweetube through one of my "tweeps", @entrepreneurHI, who has continually given me "Follow Friday" shoutouts.

Thanks @entrepreneurHI for your continued support. (For those of you interested, @entrepreneurHI specializes in teaching and training private money lending nationally). Other "tweeps" mentioned @ShaeBynes - my fellow blogging buddy, @rjsellscheap, @HarrisonPainter, and @BiggerPockets. Check them out!

Here's the latest clip. Enjoy!



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p.s. I almost forgot, if you're on Twitter and would like to follow my "tweets" I'm @mobilehomegurl. Have a great week!

Thursday, July 9, 2009

Mobile Home Rap

I just had to post this up - this is a very entertaining video using mobile home terminology. Check out Jerry here (he's a mobile home mover) and his mobile home rap!



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Wednesday, July 8, 2009

Mobile Home Repair - Subfloor Repair

I've received a lot of questions regarding how to go about replacing flooring in mobile homes. Usually, most of the floors in mobile homes are made out of particle board, which usually wears down and breaks easily over time. In most cases, it's better to have a more solid type of wood as your flooring such as plywood.

As for replacing flooring in mobile homes, if there are only a few soft spots in the floor - you don't have to replace the whole thing. What you can do is pinpoint the soft spots by cutting out the damaged area(s) and replacing them with plywood - this is what's referred to as subfloor repair.

To help see how this is done, check out this video.

(If you're interested in reading and learning more about mobile home repair, I highly recommend these books).

Happy Investing!



Video Link

Tuesday, July 7, 2009

Comparison Shopping

Hi everyone! Sorry I haven't posted in awhile - I've been really tied up lately. Though, I wanted to make a quick post here regarding comparison shopping.

It's very important to shop around and do some comparison shopping for things you buy - over time it does add up. Remember, you're not being cheap - you're being frugal. There is a difference. And, why should you pay more for the exact same thing?

By learning to bargain hunt and by becoming a more informed shopper, you will save a lot of money over time. And, the money saved can quickly add up and be used towards other things for your business and/or your personal life.

So, let me give you an example of one of my most recent comparison shopping experiences.

For instance, take this simple bath mat I bought for one of the trailers recently.



As you can see from the pic, this cost $4 - I purchased it locally from the Family Dollar Store. Before making my purchase, I did some research and visited a couple places for similar bath mats. Wal-Mart came at $5.96 - it came close. By purchasing the bath mat at the Family Dollar Store, I saved almost $2.

Now, I know saving $2 may seem very mundane and not that big of a deal. But, imagine if I had to purchase 20, 30, 40, or even 50 bath mats? As you can tell, the costs add up.

When running a business and even personally, I think it's very important to have a frugal mindset. So much money is wasted everyday - most people don't even realize it. By learning to become more frugal, it forces you to be more resourceful and in turn save your hard earned money for other things.

(If you're interested in reading more about having a frugal mindset, I highly recommend this book. It really opened up my eyes and reiterated some things for me).

Happy Investing!

Tuesday, June 2, 2009

Hiatus

The blog will be on hiatus for the next few weeks. Will be back soon. Stay tuned!

Friday, May 29, 2009

Redrum Realty

Thought I'd post this short video up based on the film since it's real estate related. Enjoy!

"The twins from the Shining quit haunting and seek a future in real estate."



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Thursday, May 28, 2009

Top 10 Home Repair Books

If you're going to get into mobile home and/or real estate investing, it's very important to know the basics of home repair. There will be times when repairs will need to be made. Even if you decide not to do the repairs yourself and decide to hire a contractor(s), it's important to know home repair basics so you know exactly what's involved for each project. (Note: One thing about contractors, you will always want to get at least 3 opinions for each project. This way, you can get a feel for rates in your area. Also, you can always negotiate whether or not you want to provide materials and just pay for labor, or both. The choice is up to you).

Here's a list of my Top 10 Home Repair Books that have helped me. I hope it will help you, too!

1. The Manual For Manufactured/Mobile Home Repair and Upgrade
2. Energy and Repair Guide For Manufactured Housing
3. Mobile Home Repair: An Inexpensive Metal Roof You Can Install
4. Black & Decker Complete Photo Guide to Home Repair
5. Home Improvement 1-2-3: Expert Advice from The Home Depot
6. The Complete Idiot's Guide to Simple Home Repair
7. Better Homes and Gardens Big Book of Home How-To
8. Home Improvement for Dummies
9. Dare to Repair
10. How to Fix Everything For Dummies

Tuesday, May 26, 2009

Terminology Tuesday - Seller (Owner) Financing

(Note: I think it's important to know the terminology and words used when learning any new business including mobile home investing. I came up with 'Terminology Tuesday' as a day to go over the terminology used in the mobile home business. It's important to know the terminology when talking to people in the business so you're all on the same page).

As defined in Wikipedia:

"Seller financing is a loan provided by the seller of a property to the buyer, to cover part or all of the sale price. This process, also known as owner carry back or owner financing, is used in a variety of situations as a creative financing option. An owner carry back can be used as a vehicle to sell a home if the potential buyer does not qualify for a loan that will cover the full cost of the property.

Example: John and Linda would like to buy a home. However, this time when they visit ABC Bank they are told, due to their high amount of debt, they do not qualify for conventional financing at all. Once again, they go to their realtor who suggests that the owner may be willing to carry back the loan. The owner agrees and finances the couple for $350,000, terms are agreed upon, and the owner starts collecting payments from John and Linda.

If an owner decides they no longer want to collect the payments the owner can sell the note on the house, a process called note buying, to a company that provides such a service. In such cases, the owner will be paid a certain amount of cents on the dollar and get a lump sum instead of collecting payments over the life of the loan. The buyer of the note then assumes control of the deed, and John and Linda will begin paying the bank instead of the owner.

Another way an owner carry back would benefit an owner is, after the sale of the home, s/he would be receiving a steady monthly income. In some cases, owners can avoid paying capital gains tax on the sale of their property by carrying back the loan."


Definition Link

There are many ways to make money investing in mobile homes - this is why I enjoy investing in mobile homes.

Happy investing!

Friday, May 22, 2009

Money As Debt

In order to be a wise investor, it's very important to understand money and how it works. Knowledge is power. In the past, I've talked about the importance of getting personal finances in order. It's very important to learn how to control money and not let money control you. Here's a video that has helped me to understand more about money and how it works. Enjoy!

"Money as Debt' tells in very simple and effective graphic terms what money is and how it is being created."

Part 1



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Part 2



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Part 3



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Part 4



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Part 5



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Thursday, May 21, 2009

5 Reasons Why I Enjoy Mobile Home Investing

Many people have asked, "Why invest in mobile homes?" So, I've decided to answer the question here with 5 Reasons Why I Enjoy Mobile Home Investing. Here they are:

1. No Late Night Phone Calls

For all the landlords out there, you may be able to relate. As a landlord, you still have to take care of all the repair issues for your tenants since they are renters. Either you can take care of them or you can hire someone to take care of them for you. Either way, it will require time on your part whether or not you are physically doing the work and/or managing someone to do it for you.

With mobile home investing (if you decide to sell on owner financing), then you are dealing with homeowners - not renters. There's a big difference. Homeowners are responsible for taking care of their home since they have an interest. Renters do not. Most times, since renters do not have an interest in the home they will expect certain repairs to be made which is the responsibility of the landlord. More responsibility = more calls.

2. No Repair Issues

Again, if you are a landlord - you will need to take care of all repair issues for your tenants. With mobile home investing (f you decide to sell on owner financing), you deal with homeowners not renters. Homeowners will be responsible to take care of all the repairs on the home which means more money in your pocket and less time involved.

3. No Middlemen

In most cases, there is less people to deal with when investing in mobile homes. When you are buying a mobile home (in most cases as personal property), you will be dealing directly with the seller in most cases. Rarely have I seen a real estate agent involved unless you are buying the mobile home and the land. Usually, it will be too much money to sell using a real estate agent to sell a mobile home. Also, when you are going to close on the home you usually just deal with your local government authority in your area. Some people have asked whether they need a title company. In most cases, "no" but it also does depend on the comfort level of all parties involved. If you and/or the seller feel more comfortable, you can use a title company to close.

Likewise, there will be less people involved in terms of property management since there's nothing to manage if your dealing with homeowners. (Remember, homeowners are responsible for taking care of the home). Probably the only management you will have to deal with is the park management (if you decide to buy in parks) though usually they will only call you if there's a problem. Less people involved=less stress.

4. Lower Costs

Let's face it - it takes less money to buy a mobile home than a single family home (most of the time). What does this mean? It means lower costs in all areas including closing costs, insurance, taxes, etc. Since you have less money into it, it frees up more of your money to go out and do more deals. More money=more deals.

5. Less Time Involved

This is probably my favorite reason to invest in mobile homes. Since you are dealing with homeowners who are responsible for taking care of the home, it frees up your time to do other things. Most of the time, you are just there to collect payments - that's it. Sure, you may have to deal with the park management (if you are buying in parks) but that's only when issues come up. Once you complete a deal, that's it - no more maintenance issues and/or dealing with calls from renters. Think about it. If you are a homeowner, when was the last time you called your bank for a repair issue? Never. That's not your job - it's the homeowner's job.

Less time involved means freeing up time to go out and do other things like looking for other deals. With mobile home investing, once you've established yourself and have a few deals going then you don't have to work as hard scurrying around looking for other deals. Again, it's all about cash flow. Plus, the cash flow coming in from your current deals will help to fund new deals. More time + more money = more deals. And, more deals=more cash flow=more time to enjoy life and do the things you want to do, not the things you have to do.

So, there you have it 5 Reasons Why I Enjoy Mobile Home Investing.

Happy Investing!