Thursday, April 8, 2010

5 Baby Steps to Get Started in Mobile Home Investing

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After commenting on my blogging buddy's, Shae Bynes, article on Bigger Pockets"Just Do Something! 5 Baby Steps to Ease New Investor Fears" and responding to Shae's question about what baby steps I'd recommend for those interested in getting started in mobile home investing (see the "comments section" in the article if you'd like to check out my response), I decided to make a post about it.

So, I've compiled a list of 5 Baby Steps to Get Started in Mobile Home Investing. Here they are:

1. Make a plan and know what your goals are.

When first starting out, it's really important to know what your goals are. If you already have your personal finances in order, the next step would be to make a plan to get to your financial goals.

Depending on where you want to be financially will determine what your goals are. Are you short on money and need to build up cash? If so, how much cash do you need to build up? Or, do you have some money saved up for investing and are ready to buy and hold? If you're looking to go this route, what is your investment criteria and how many properties are you looking to buy? What is your timeframe to establish these goals? Before you get started in mobile home investing, you need to make a plan and know what your goals are.

(Note: I've had a lot of people ask me whether they should try to do both building up cash (aka bird dogging/looking for deals for other investors) and buying and holding at the same time. To those just starting out, I don't recommend it. Why? Personally, I feel it's better to get really good at one thing first before moving on to other things. It's better to be an expert in one area and get the experience you need (while at the same time working your plan and getting to your goals) than spreading yourself out too thin trying to learn multiple systems and being mediocre in different areas).

2. Educate Yourself

I'm a firm believer in education. If you plan on learning about mobile home investing, learn all you can about the business and the system. If you haven't done it already, the first thing you need to do is buy Lonnie's book. This is a must if you're interested in learning about this business.

(Note: I've had some people ask me whether or not I think Lonnie's stuff is too old and outdated. I say, "No." Honestly, he is the one that created the system - that is why he is called "The Godfather" of the mobile home business. Lonnie's system works. Period. I've had Lonnie's material ever since it was a manual. Believe it or not, I take the time to read it every year - his stuff never gets old. Every time I re-read his material, I learn something new because I am seeing it through different eyes. With each deal and more experience, you will too. It's amazing the knowledge I've learned just by reading, applying, and re-reading his material over and over again year after year).

3. Learn Your Market

Since I'm a film believer in education, I'm also a film believer about taking the time to learn and educate yourself about the market you are in. (aka the mobile home market). Even if you plan on working with birddogs/wholesalers to help you find deals, you still need to know your market so you can spot a deal and not have to rely on others for you to tell you what a deal is.

Believe me, I've seen a lot of investors get into some really bad situations because they've depended on someone else to find deals for them relying on their "analysis" of what a deal is. Everyone is going to have different criteria and a different perspective on what a deal is. A deal to me, may not be a deal to you. And vice versa. By taking the time to learn your market, you will feel much more confident with your investing decisions and not have to rely on someone else for information.

Some things you can do to learn your market would be to visit a lot of parks and see a lot of mobile homes, in parks, on land, visit some dealers, etc. Get to know the parks, the lot rents, the types of homes available in your area (sizes and dimensions, # of bedrooms, # of baths, average square footage, etc), what the demands are, what the values are (i.e. wholesale value, retail value, trade in value, etc). These values can vary depending on the area and a lot of times the type of park (i.e. low end, high end, etc). Knowledge is power.

4. Build Your Team

We've all heard the saying, "Two heads are better than one." Before you can even start to invest in mobile homes, you must take the time to network and build a team that can help you get to your goals. Why? You cannot do this alone. If I did not take the time to build my team and create a strong network in the beginning, I probably would not have been successful. It's essential to build up your team so that you will have a strong net of "go to" people who can help you in this business.

The first thing you want to do is figure out what team members you're going to need. Again, this will depend on your overall goals and investment strategy. (Note: I wrote an article here that will give you some insight on some key players to have on your team).

After you've figured out who you need on your team, take the time to go and seek these people out. For example, if your plan is to birddog/wholesale mobile home deals to investors then you need to go out and find investors (aka your buyers) who are looking for mobile homes to buy.

Let me be honest, it takes time to build a good team. It does not happen overnight. It's always good practice to develop more than one relationship with one type of team member (i.e. investors, contractors, park managers, etc) because it's always a matter of personality. Sometimes you may not really get along with one person, but things really click with another. From there you can pick and choose those you wish to work with and have on your team.

By taking the time to build your team and develop strong relationships, it will make this business easier and save you a lot of time and money in the end.

5. Keep Updated

Staying up to date on your market and the latest trends is a "must have" in any business. This includes mobile home investing. If you don't keep up to date, a lot of things can change. (Note: In this post, I mentioned how the economy has taken a turn and affected many of those who have bought in the lower end parks. In some markets, due to the economy there has been an increase in defaults and some Lonnie dealers have been forced to convert their "Lonnie" deals to rentals).

By staying up to date on your market and knowing the latest trends in the mobile home industry, you are better prepared to handle change and position yourself ahead of those who did not taking the time to stay updated.

Some things you can do to stay updated on your market and the latest trends is to keep in touch with your team members on a regular basis. It's so important to maintain a consistent relationship with your team members. Everyday they are in the trenches and see this business first hand. Another thing you can to to stay updated is to constantly read the news. If you're interested in keeping up to date on the latest mobile home news, I update my Facebook page on a regular basis.

By taking the time to keep updated and educate yourself on the latest news and trends in the mobile home industry, you will know and understand the mobile home business much more than the average investor.

I hope these 5 Baby Steps to Get Started in Mobile Home Investing have been helpful. The key thing is to make a plan, follow that plan, and like my pal Shae says, "Just do something!"

Happy investing!

p.s. If you've joined my Facebook Page already, I just wanted to say "thanks" for all your support. If you know anyone else who may be interested in learning about mobile home investing, feel free to send them over. Thanks again!


marilyna said...

Hi Mobile Home Gurl,
This is a great post. Thank you. What is your opinion of Lonnie's second book - Making Money with Mobile Homes (I think that's the name). Is it good? Does it add much to Deals on Wheels? I've already read DOW and am on my second reading.

Mobile Home Gurl said...

Thanks, glad you enjoyed it!

Ah, yes "Making Money with Mobile Homes" - I have that book, too. I'd say it's a good book to have, though it's more story based. Most people who could probably relate more to it are those who have gone out and done their first deal and/or couple of deals. If just starting out, I'd recommend starting with "Deals on Wheels."

I have read, "Making Money with Mobile Homes" a couple times. It's exciting to read for me as I can relate to the stories and it's given me more ideas and allowed me to see more opportunities. Though, it may not be as relatable for those who are just starting out and still have to do their first deal and/or couple of deals. With each deal comes experience, which makes the book more relatable.

Glad to hear you're on your second reading of "Deals on Wheels", it never gets old. Thanks for stopping by!

Julie Broad said...

Thank you!! What a great post. And really it applies to all real estate investing not just mobile homes.

Mobile Home Gurl said...

Thanks Julie, glad you enjoyed it! I agree, it does apply to all real estate investing. Thanks for stopping by!