Wednesday, March 18, 2009

The Most Important Deal

"You're not in the game until you do your first deal."

In the beginning, I did not understand this statement - they were just words. Though, after I completed my first deal I understood exactly what this statement meant. It was like I was seeing things from a different set of eyes - I no longer was seeing things from the outside, I was inside playing the game. No longer was I on the sidelines.

There are books out there to teach you how the game of investing is played. Though, you will not be in the game until you actually experience it first hand.

A lot of people end up reading a lot of books but never take action - analysis paralysis. Taking action will help you achieve your goals. (If you need some motivation, here's a previous post I made that can help).

If I never took action beyond what I read, I probably would not have come so far. I would be in the same place that I was before - right back where I started. If you continue to do the same thing you did last year as this year, where will you be today?

That's the million dollar question - the question that can get you to your goals or can keep you where you are. It's all about taking action and taking action takes courage.

I remember my first mobile home deal. Though I've had experience investing in real estate in the past, I was extremely terrified. I had already received the "ok" from the park manager to be able to do deals in the park. The sellers called me wanting to bring someone in who would be serious about buying their mobile home so they could move asap.

They told me they wanted to work with someone they can trust and someone serious about really buying their mobile home so they could move on. The sellers informed me that they've talked to investors in the past who just didn't do what they said they were going to do and really did not want to spend the time working with these types of people. Additionally, they did not want to take the time to screen a bunch of buyers and have them go through their home as they were in a time crunch - they needed to sell their home fast so they could move on.

So, I decided to make the appointment to go and see their mobile home. I asked them the basic questions to determine their motivation (I will be writing about this in the future to address how to determine the motivation of sellers).

I also asked them how much they were looking to sell their mobile home for - they told me they did not want to discuss that over the phone until they met me. Ok, seemed fair (Note: Some real estate investors say they do not go out to the home until they discuss price over the phone. I beg to differ. I feel that you should go out and visit every prospect that you feel may be a motivated seller. Just my experience).

Now, before I go on I'd like to tell you upfront that I had already researched the market. I knew exactly what mobile homes could go for in the park the sellers called me on. In addition, I already had the "ok" from the park manager to do deals in the park. This is very important. Knowing the market is very important.

Upon arriving at the mobile home, I introduced myself to the sellers. I found out more about them and they found out more about me - this is very important. People will do business with people they like and trust. It's very important to build rapport and establish a relationship. (I will have a list of books in the future that can help with this concept).

In any case, after talking with the sellers for awhile I let them lead me through the mobile home - I began the inspection process. Everything seemed to be in working order structurally and mechanically. There was an issue with the wood board panels outside as they were wearing down. However, I had a couple contractors look at them and it was just a matter of having them replaced. (I will go into detail with this part of the story in another post).

Since the mobile home seemed to be in good, solid, shape, I decided to go through with the deal. We signed a contract and I left a small deposit to show good faith. It was a 1984 mobile home - 2 bedroom, 1 bath. I paid $3600 for the home. Sold it in 2 weeks with financing - $1000 down, $250 per month for 4.5 years. This deal is here in this video:

Video Link

I went on to do more deals - some much bigger deals, and continued my journey investing in mobile homes. Though, the deal that taught me the most and really has changed my life has been my first mobile home deal - the most important deal of all.


Jamie said...

Hi Rachel,

This is a dynamite article. I love your blog... please keep on writing.

I am looking forward to read more about how to determine the motivation of a seller and how to KNOW the market.


Mobile Home Gurl said...

Thanks Nikki, I'm glad you enjoyed it. Thanks for the note and for stopping by!