Making an Executive Decision

Just recently, I had to make an executive decision on the issue of possession. As real estate investors, we all have heard the age old rule never to make a purchase without getting possession first. However, there are times when sometimes we have to bend the rules a bit and make things work because we are paid to solve problems. Easy as that.

I had a situation come up on a deal where the sellers needed a portion of the funds from the sale to move into their new place. However, in order to get the funds we needed to close on the property first. So, I was left in a bind and a major dilemma. The sellers could not move into their new place until they received the funds from the sale on my deal. Problem was if we closed on the deal they would still have possession until they moved out.

So, I circulated this around to my fellow investors on the boards. I received a lot of feedback. In fact, most of the feedback I received told me ABSOLUTELY NOT to close until I get possession. Many of these investors were seasoned and told me it was the sellers' problem and not mine. Only a few (I think about 2), told me they've done this in the past and sometimes it's gone smoothly but other times the deal has blown up and it took them FOREVER to get the people out.

At this point, I was faced with a major problem. In fact, the seasoned investors on the board took it so far as to scold me to even think of closing without receiving possession. One investor went as far as saying and I quote, "Boy did you screw up."

In any case, I listened to everyone's advice and considered each one carefully. I know people speak from experience and a lot of times history tends to repeat itself. No, I did not want to make the same mistakes as my fellow investors did in the past.

After thoughtful consideration, I came up with a solution. I decided to go ahead and close on the home but hold back 1/2 of the funds until I received possession. In addition, I noted specific dates for move out and a final inspection to be done to my satisfaction along with a liability waiver stating the sellers would not hold me accountable for liability issues on the home from the time of sale to the possession date. (I got this idea from my insurance agent who warned me about liability issues I would have when I closed on the home). Lastly, I included a $100 per day penalty if the sellers did not move out by the possession date. All of this was done in writing. The sellers signed the document and we had it notarized the day of the sale.

So, what happened? Did I get possession by the possession date? Did the deal blow up? I'm sure you all are wondering...

Well, things went smoothly. On the possession date, the sellers did everything they said they would do. I was very happy to see all of the "junk" out of the home and off the front porch. In addition, the home was cleaned as they promised as well as the oven. I was very pleased. I gave the sellers the other 1/2 of the funds, they signed off on my Acknowledgement of Payment Received Form with a notary to make it official. They handed me the keys and were off on their merry way!

Now, could this deal have blown up in my face? Could the sellers have stayed in the home after we closed and not moved out by the possession date? You bet! As with all business ventures, there is always risk. But, you can't let that stop you. The important thing is that you must measure your degree of risk and weigh the consequences.

In this case, the worst thing that could have happened was if the sellers did not move out of the home by the possession date. Then, I would be faced with an eviction situation. Luckily, in my state the laws are very "landlord friendly." Their motto here is, "If you don't pay, you don't stay." So, an eviction would only take 45 days. On the other hand, if I were in a more "tenant friendly" state an eviction could be a nightmare - it's taken at least 4+ months in some states to do a full eviction.

My point is it's good to get advice from others who have had experience. Listen to others and take in account their words of wisdom. However, it is YOU who makes the final decision and YOU must weigh all the risks, benefits and consequences. In the end, it is YOU who must take control of your actions and your future.

Rooting for the Underdog

When I'm not working, I like to watch movies - a lot of movies. There are certain themes that can be found in a lot of movies which seem to work well with larger audiences. One of those themes is rooting for the underdog. We've all heard of the movie "Rocky." He fights, he loses, he fights again....But, in the end he wins. Why? He never gives up.

A lot of people ask, "What makes someone successful?" When I tell them the answer, people are baffled. They think success is measured by brain power and how book smart someone can be. In a way, it does involve brain power. But, what makes someone truly successful is persistance and belief in what they do.

Though I may not have as many years of experience in the mobile home biz as some of my competitors, for some reason the people in my network including the park managers, dealers, other investors, etc. all want to see my succeed. There's just something about the "underdog" we all like naturally. They want to see me working deals and continue to send stuff my way.

Why? I think part of it has to deal with the "people" aspect in this business. People want to work with people they know, like and trust. Since I keep in contact with my network on a consistent basis, they remember me. Not only do they remember me, but they like me as well because I go the extra effort to learn more about them and what else is going on with their lives.

To be honest, most investors are not very "people oriented." So, they do not take the extra efforts that I have made to get to know other people. Yes, they can be successful finding deals and closing on them. But, if they are only interested in those deals and not the people who help them it can only last so long.

I have met many other investors who just do not take the time to incorprate the "people aspect" in their business. This is why some of them can no longer find deals anymore. People always say, "I can't find any deals. Where are they?" They are there. It just requires skill and effort to learn how to incorporate the "people aspect" into their business.

This is why I have taken the time to improve my communication skills. I have studied the areas of sales and marketing and public speaking very closely for almost a decade. I have read many books. Listened to a lot of CDs. Been on many teleseminar calls. Attended many conferences. At time, it can be repetitive. But, sometimes I learn something new.

A friend of mine recently said to me, "Why do you continue to study communication and public speaking? You're already good at it. You don't need it."

I told my friend, "There is always room for improvement. Those who are successful are always learning, no matter how successful they are."

Constant learning is the mark of a truly successful person. That is why we like to root for the underdog. Yes, we will make mistakes in our conquests. But, we will get up and learn from them. Be wary of those who have stopped learning and think they know it all. These are the ones that dominate conversations and like to give advice out to others. In the end, there is always room to learn and improve - no matter how successful one may be.

Fear

Thought I'd post about the topic of "fear." We all fear the unknown, it's natural. The best way to combat "fear" is to get the knowledge and go out and face "fear" head on. Lately, a lot of people have contacted me wanting to get into the mobile home biz. People ask a lot of questions but don't take any action b/c they "fear" the unknown. I hear so many excuses not to get into the business that most people end up not doing anything. Why? Most people fear they will make a mistake, a big mistake. The reality is it's ok to make mistakes. When I first got into the real estate biz, I made so many mistakes. Seriously. I made every mistake in the book and then some. But, you know what? That's how I learned. With the advent of the Internet, we now have access to so much information and resources are out there for people to get the knowledge they need. For me, I used those resources and met a lot of people from all different parts of the country investing in real estate. Though I had those resources, I still had to go out there and take action. Though I made mistakes, I learned and that is the most important thing to get out of the experience. It's hard to explain but you learn by "doing." You really do. After looking at so many homes, I've been able to learn my market and know now what a home can sell for. As a backup, I have resources in place such as other investors in the biz, dealers, park managers, movers, etc. who I can turn to for a second opinion. But, this did not happen overnight. It only happened as a result of the ACTION I took to learn my market, go out and look at homes and eventually start making offers. In the end, my actions have helped me better learn this business and really learn from the mistakes I've made. I'm willing to do whatever it takes to make this business work and to get to my goal of achieving financial freedom. Are you? The choice is yours.

Negotiating and Making Offers

So, I made a few offers this weekend. It's funny as I didn't even think these sellers would even consider my offer. Know what I learned? Most times, the most important thing is not always price but TRUST. People want to work with people they like and know they can TRUST. With my knowledge that I gained from my network, I laid it out there with these sellers this weekend. Told them how it is, what's going to be involved, and gave them options. I played it like I don't really need to buy which is true because last thing I want to be is a motivated buyer. I will only buy at the right price, I don't need to buy. They may need to sell or not sell. It's up to them. But, I can only offer my best price and stick to that price as long as it makes financial sense. Well, guess what? These sellers appreciated my honesty. They actually WANTED to work with me. One seller, I even told him he may be able to get a higher price with someone else than with me. But, he actually accepted my verbal offer. Now, I'm just waiting for him to find a new home to replace the old home with. Wow, I guess reverse psychology really works! In any case, I learned that not everything has to be hard. It's all very simple. The harder I work and more effort I put on a deal, the harder it is. On the other hand, when I put less effort into trying to make a deal work, the easier things get. Now, I've got something to compare to with some of these other sellers calling me. All of a sudden, I'm calling the shots - not the other way around. One thing I've learned being in the business world, you gotta learn to play on your own court and call the shots. Truly, that's how people become successful and make those killer deals we all hear about.

The Ball is Rolling

Well, I've gotta say. This business is all about surprises. So, I've been focusing my efforts on what I do best - networking. The leads are getting better as I pass on leads I can't work. Today, I got a lead from a dealer after I gave him a lead on a family needing to buy a new mobile home. What's even more better is the lead is for a mobile home already in a park in my area. Awesome! Then, the phone has been ringing more with leads from my network and sellers calling. Now, they are calling ME! A week ago, it was more buyer leads calling and today it was more seller leads. Funny how things work out, eh?

So, I'll be pretty busy this weekend viewing homes and making offers. This business definitely makes you work but in the end it's worth it if it helps me get to my goal of achieving financial freedom.

Leads, Leads and More Leads

Let me tell you - This business is very PEOPLE intensive. So, I've been doing a lot of networking with park managers, movers, dealers, park owners, etc. Put a few more signs out last week. Got an ad in the paper. My phone is ringing like gangbusters at all hours of the day.

Here's the problem. I've got too many phone calls and not enough time to field all the calls. The majority of my calls are from buyers and surprisingly from the dealers. I get a few calls from the park managers but mostly to help them fill their lots. The leads coming in from the dealers are mostly for homes that need to be moved off land. Most of these deals the sellers need a chunk of $ to buy a newer mobile home. So, we are looking roughly at 8k-13k for a singlewide, usually in the 80s. Plus, these things have to be moved. So, I haven't found a deal yet with the dealers. However, I'll continue to keep in touch with them. They continue to call like crazy.

However, the majority of my time is spent in the parks and with the park managers. Missed out on a deal last week. Saw a home for sale in a park. No phone number. Just said "For Sale - $5500." I called the park manager but she was out of town. So, I called the park manager of another park who so happens to be a good friend of the park manager of the park with the home for sale. She told me that park manager is out of town but tried to reach her. I kept going back to the park asking the neighbors who owned the home. They told me it was park owned. I finally got in touch with the park manager today who is still out of town. She told me that home has been sold. But, told me to definitely keep in touch as there's another home on the lot they do not know who owns it. It's been vacant for years. I don't even want to think about what the back taxes are on that home. But, when the time comes I'll check it out. I'm thinking it's already been taken back either by the bank (if there's a lien) or by the city and/or county for taxes owed.

In any case, still searching the parks. Out of all the sources of leads out there, every investor I've talked to in this biz has told me the best source of leads have been the park managers. So, I will continue to cruise the parks and strengthen my relationship with the park managers. My next step will be to start bidding on the REOs, once I take the class and get licensed.

This business can be done. It takes a lot of work but the payoffs are tremendous.

This is gross!

Well, I finally decided to get on the bandwagon and share my mobile home adventures via the WWW. Today, I went to see yet another mobile home. (I've seen over 100 already!) The inside needed a little bit of work. Problem was the electric and water was shut off so I couldn't test it out. But, the MAJOR problem was the outside. All of the wood on the outside of the home was rotting really bad. So, it needed a COMPLETE overhaul of wood replacement all around the house. In addition, it was totally cracking. It would be very risky for a mover to move this home. Here are a few pics:

Here you can see the moisture seeping thru the rotted wood.



So, I consulted w/a few of my fellow investors. People who have replaced rotted wood in the past say it's a PAIN to do and ends up costing more $ and time. PLUS, this thing needs to be moved which costs more $ and needs A/C recycled, not to mention plumbing and electrical hookups. Eeeek! Looks like it's going to cost more $ and time. I'm going to pass and move on to the next one. Thing is about this business, there are SO many! So far, I've got a few pieces of the puzzle. I've got parks to work with and lots to fill. Now, I just need to find a descent home to place them on. Off to the next one...