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


Shae said...

Rachel, I really like this post. Sooo true!

Mobile Home Gurl said...

I'm glad you enjoyed the post, Shae! Thanks for stopping by! :)

Steph said...

Hey Girl!

Great article! I think we must be on the same wavelength- I just posted an article on Bigger Pockets today aong the same lines.

I think learning your market is one of the most important ingredients to become a successful investor. It's a pain in the butt to do, but definitely well worth the effort.

Take care!


Mobile Home Gurl said...

Hey Steph!

Thanks, I'm glad you enjoyed the article! I'll definitely have to check out yours on BP.

It definitely does take up a lot of time, I saw so many homes before I did my first deal just to get a feel for the values of different homes in different areas. After awhile, it wasn't so bad going through them - I got faster and could spot any issues right away. (like if there is a bucket underneath the sink - leaks, even though they may say they've had no plumbing issues, lol!)

Thanks for stopping by!

Larry said...

I was wondering..."know your market"? It's been spoken of many times, but not a lot of detail. Could you explain, give some steps of what you mean by that? Maybe you've already posted it and I just haven't found it yet.

Mobile Home Gurl said...

Sure, Larry. I've had several folks ask the same question as well. I've covered that in this post here (see item #3):

Hope that helps, thanks for the note and for stopping by!