Getting Started Investing: Transitional Vulnerability

17 Comments

October 9, 2013

Welcome back,

This week I would like to discuss Transitional Vulnerability. Do not be caught off guard when starting a new venture.

Transitional Vulnerability is one stage of learning a new business or skill-set when you are the most vulnerable to immediate failure and becoming discouraged. 

Transitional Vulnerability can last weeks, months or a lifetime on your own.

Some examples of Transitional Vulnerability:

  1. When a butterfly first hatches from its cocoon it is in a state of transitional vulnerability.
  2. When a child is being born, both mother and child are in states of transitional vulnerability.
  3. As a baby bird learns to fly it is in a state of transitional vulnerability.
  4. When you start a new job you are in a state of transitional vulnerability.
  5. As you begin a new hobby or sport you are in a state of transitional vulnerability.

Investing in real estate is no different.

However if you fail with investing you are out literally hundreds of thousands of dollars over your lifetime assuming you never returned to investing.

When you choose to begin a side business of investing in real estate and/or investing in mobile homes for profit you are in a state of Transitional Vulnerability for at least your first 5 deals. This figure is based solely on my own experience of helping others in this field.

Make sure to understand that you will be faced with many common and unique challenges to overcome. These challenges will encourage you to stumble, become delayed, be afraid, second-guess yourself, hesitate, and eventually succeed or fail. Many of these challenges, both internal and external challenges can be overcome with correct training, leadership, and accountability. 

Building a profitable portfolio is hard, but you can do it. If anyone on this planet is where you wish to be there is no reason why you cannot duplicate his or her success.

How to overcome Transitional Vulnerability?

Be prepared before you ever take action in public.

Much like a pulling off a Band-aid it is going to happen one way or another. You can either learn this business overtime and improve slowly which is called “Trial and Error” or you can choose to advance your knowledge with a seasoned investor working directly with you on your deals, this is called having a “partner”, “coach”, “mentor”, or “local expert” on your side. Make sure this person is someone others vouch for and that you like, trust, and can rely upon.

Logically speaking there are only so many steps (A, B, C, D… Z) that you should take to successfully build a profitable mobile home investing portfolio. Just to make sure you and I are on the same page I consider a successful business one that buys/sells one mobile home per 30-45 days.

Lack of clarity is what eventually hurts most amateur mobile home investors from moving forward as quickly as they can with help.

Lack of clarity for:

  • Where to advertise and market to save money and get results?
  • How to speak to sellers when screening?
  • How to construct offers?
  • An outline of every step of the process? Click here to see a more complete MHI outline.
  • How to answer seller/buyer questions to keep the deal moving forward?
  • What offers to suggest when buying and selling? This requires real-time help.
  • How to sell, what paperwork to use, and properly screening for low-risk buyers?
  • The best ways to manage properties for receiving on-time payments from your tenant-buyers.

If you ever have any specific mobile home investing questions or general real estate investing questions do not hesitate to ask me.

Love what you do daily,
John Fedro
support@mobilehomeinvesting.net

 

 

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17 Comments

  • Martha and Lan

    Reply Reply October 10, 2013

    This was a wonderful video to watch. I hope you are enjoying your trip and the fruits of your labor. Please keep the videos and help coming. My husband and I are still working on the singlewide mobile home we talked about with you last wek. The seller is coming along and we are very optimistic about purchasing this home for only $500 out of pocket. Thank you for everything you do and I can personally say out heads would be spinning if we didn’t have you to ask questions to. thank you for the help John and god bless you.

    Stay safe.
    Martha and Lan

    • John Fedro

      Reply Reply October 11, 2013

      Hi Martha and Lan,

      Thank you so much for the kind words. The trip so far is amazing. Many people all over the world are so friendly and giving. I can’t speak for everywhere but there is such beauty here from nature to the kindness of strangers.

      Concerning your business: Email me an update with regards to what you mentioned about the seller and any new developments that have been going on. Also, email me the results of your Module 2 Action assignments asap. Whether this deal happens or not you both are the ones making this business work for you. You deserve it and I am so happy to have you as a part of the group.

      Talk soon and I’ll be safe 🙂
      John

  • Dave Burfield

    Reply Reply October 12, 2013

    Do they have mobile homes in Thailand ?

    • John Fedro

      Reply Reply October 12, 2013

      Hi Dave,

      I wondered the same thing. Haven’t seen 1 since I got here. They could sure use them here in some of the remote areas I have been through.

      Thanks for asking and commenting,
      John Fedro

  • Dave

    Reply Reply October 15, 2013

    John,

    Are there areas that your system will not work in ?
    Such as, areas with a certain economic landscape ? ( if that makes any sense )
    Population, unemployment rate, median income etc. ?

    • John Fedro

      Reply Reply October 15, 2013

      Hi Dave,

      Thanks for reaching out to me on this. Please see my thoughts below. I have made your questions in italics to read easier.

      Are there areas that your system will not work in? Hawaii has a limited number of mobile homes so this can almost never be a full time business in Hawaii. In the rest of the US it is fair game. Only in areas such as ocean side cities in Ca, New York City, some Coastal towns in FL, and other hot-spot cities do I advise my members that they must start investing inland when getting started. The reason for this is because in areas with a high demand from buyers that are willing to pay outrageous prices for MHs the price of these homes goes through the roof as well as the park lot rent per month. When we move our target investing radius inland just a few miles to the next cities over we find lot rents and home prices shoot down. Now we can make the buy and hold MH business work with limited risk and minimal holding costs.

      With regards to the number of mobile homes obviously the more inventory the more opportunity you will have to capitalize on unique sellers/home owners. However if you live in the middle of nowhere you may have to drive an extra 30 minutes on average compared to someone that lives in a mobile home saturated area. Where there’s a will there’s a way.

      Such as, areas with a certain economic landscape? This question is answered a little bit in my last answer however to add on to it there is no real difference when investing in Georgia versus California as long as the lot rent is average for the area and below $650 max. Here is what I mean: a 3/2 can sell for around $1,000-$1,300 per month in many areas where the lot rent is higher towards $600. This about a $400-$500 cash flow per month. On the other side of the spectrum if lot rent is only $110 then the mobile home will only sell for $400-$500 per month because of the market. This would about equal the same cash flow. These number are hypothetical and your area should be tested before you buy anything so that you know what to pay and what you will profit. Hope this made sense?

      Population, unemployment rate, median income etc.? If the city is declining or you’re in a military area with government funds being cut you will want to make sure you purchase at the correct price and terms so that you can resell for a very attractive price/terms to attract a quality buyer quickly. Win-win-win. We never want to back ourselves into a bad deal.

      Hope this makes sense and let me know if you have any follow up questions.

      Best,
      John Fedro

  • Dave

    Reply Reply October 16, 2013

    Thanks John,
    You explained everything perfectly.

    I’ll be in contact soon.

    Dave.

    • John Fedro

      Reply Reply October 16, 2013

      Happy to help Dave.

      I’ll be here if you need any further assistance.

      All the best,
      John Fedro

  • Dave

    Reply Reply October 18, 2013

    John,

    Can you please explain the difference between rent to own and your mobile home investing program ?
    Also, I assume that the course can be done on a IPad, right ?

  • Phil Duke Jr.

    Reply Reply October 31, 2013

    John,

    I’ve been reading the site and watching the videos and I feel like this is a business that I’d like to commit to. I’m in the beginning phase of coming up with a game plan to succeed and I’ve been watching as many videos and reading as many blogs as I can. One area that I can’t seem to find an answer to, and I’m sure it’s different from state to state, is what kind of license do I need to do these deals? A retailer license? Wholesaler license? Mortgage broker license? Any input is appreciated

    Phil Duke Jr.

    • John Fedro

      Reply Reply November 3, 2013

      Hi Phil,

      Thanks for commenting and reaching out to me on this matter. Great to hear you are considering getting started. If you let me know what state you are in I would be happy to fill you in what your state’s limit per 12 month time for buying/selling mobile homes in parks is.

      A mortgage broker will allow you to originate mortgages. A retailer will allow you to sell mobile homes retail from a showroom. A dealer will allow you to own and operate a showroom and lot where you sell your own mobile homes. A broker will allow you to broker mobile homes and act as a middle man between buy and seller, but not buy homes yourself. I am not familiar with a wholesaler’s license with regards to mobile home investing.

      Hope this helps. Let me know if you need a more thorough explanation of each. Here to help.

      All the best and talk soon,
      John Fedro

  • Phil Duke Jr.

    Reply Reply November 4, 2013

    I’m in Alabama. I don’t have any desire to ever have a dealership or a lot where I set them up for sale. I want to find mobile homes on rented lots and simply purchase them cheap and then do owner financing on them. Any idea what kind of license I’d need if any to do this?

    Phil

    • John Fedro

      Reply Reply November 5, 2013

      Hi Phil,

      In your state you are asked to obtain a dealer’s license after your first mobile home you buy for the purposes of reselling for a profit in any 12 month period. With that said I have written a post and recorded a video discussing my opinions on the matter. Check it out. The article is titled, “Mobile Home License Per State – How Many Can You Buy/Sell Per 12 Month Period??”.

      Concerning your question about owner financing. The Safe Act and Dodd Frank acts (as well as other Truth in Lending Acts) have severally limited when and how you can sell a mobile home with seller held financing. It is important to understand what this law says, how it reads, and how to avoid breaking the laws. Without going into my methods and paperwork I can easily answer your question by saying that if you would simply like to create your own Notes backed by mortgages/deeds of trusts you will need to become a Safe Act approved Loan Originator. You can also hire these folks to write your secured loans, as long as this is allowed in your state. All states have their own rulings on limiting seller financing as well as the federal rules. I would suggest discussing this with an attorney in your state so you can decide if going through the Loan Originator’s certification classes is the right call for you. Example: If your state allows for multiple loans to be originated in 1 year you may wish to outsource the process. Be aware that the loan originators you work with should negotiate and handle the entire loan application process as well as the paperwork. Does this make sense? Let me know.

      Please let me know any follow up questions you may have.

      Talk soon,
      John

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