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!



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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!)



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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!)



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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!



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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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How To Get Started Investing In Mobile Homes

I've had a lot of people ask me how to get started investing in mobile homes. Thought I'd make a post to address this question.

Before you even start investing, the first thing to do is get your personal finances in order and understand how money works.

There have been countless people who go out and invest without even having their own finances in order first. By having your financial house in order, you will know how much money is going in and how much is going out, and what areas you need to work on - this is basic stuff most people don't even know. It's very important so you will be able to see your overall goals.

To help you understand the subject of personal finance and money, I highly recommend putting the time to educate yourself. I made a post awhile back on my Top 10 Personal Finance Books. It's a good starting point.

Once you have your personal finances in order, then you can start looking into investing. As an investor, you need to have a plan. Think about your investing goals - what are they? Also, one of the things you'll need to think about is exactly how much time and how much money you want to dedicate to investing - there are many forms of investing.

How involved do you want to be? Is your time limited - would it be better for you to be a passive investor? Or, do you have more time - maybe you can be more involved?

Some people have more time than money, and vise versa. I highly recommend you taking the time to learn about the types of investments you choose.

Personally, I am more involved with my investing activities - I can put deals together because I'm very good at networking and working with people. On the other hand, I know other investors who want to be more "hands off" and would rather work with someone who can find deals for them and lend out the funds for the deals.

It all boils down to personality. What are you good at? What do you enjoy doing? What skills do you have? What are your strengths? What are your weaknesses? Take the time to assess yourself and your skills.

If you are further interested in learning about investing in mobile homes, check out this post I made awhile back.

I will continue to address the questions I receive in future posts. Feel free to contact me with your questions.

Happy investing!