Welcome back,
In today’s Mobile Home Investing Podcast episode #26, I’m very happy to welcome active mobile home investor Ryan to the co-hosting microphone. In today’s 54-minute podcast episode we dive into example after example when it comes to rushing into mobile home investing opportunities and deals too quickly. Learn from our mistakes rushing into working with shady mobile home sellers, handymen, high-risk tenant-buyers, purchase offers, closings, and unseen repairs.
I am super proud of everything Ryan has accomplished in such a short period of time. Ryan has already been able to help multiple mobile home buyers, park owners, and mobile home sellers. This is only the beginning. Special thank you to Ryan for opening up his business for this podcast to help other investors he’ll likely never meet.
Rushing into mobile home deals, purchase offers, and closings.
At first thought this may be what most investors think of when rushing into deals. In reality it may not be until days or weeks after you purchase an investment property that you realize the mistakes, oversights, or errors that were made. Perhaps there is an unseen ownership/titling issue, overpaid purchase price or terms, unseen repairs/damages, park location or management issue, state issue, etc. Rushing into a real estate deal and closing too quickly may develop from an investor…
- Investing mainly with emotions instead of logic.
- Not truly understanding your local numbers and/or local supply and demand.
- Having an exit strategy not based in reality.
- Having uncertainty with regards to your purchase and sales process/paperwork.
- Not completing a checklist or due diligence process that ensures you know what you are buying, making proper repairs, understanding the park criteria or land, location, and your very realistic exit strategy.
Pro Tip: It may be helpful to seek out the experience and help from other more experienced investors. Look for local or nationwide experienced investors to ask questions and get real-time advice from. Remember trial and error may be an expensive teacher.
In the mobile home investing podcast episode below John and Ryan cover:
✔ 1:05 Ryan’s quick mobile home investing bio.
✔ 1:50 Which mobile homes did Ryan buy too quickly and why?
✔ 3:20 Different due diligence checklists depending on which type of mobile homes and/or if land is included.
✔ 4:23 Analysis of paralysis.
✔ 5:39 Purchasing a mobile home on private land creatively with a hidden lien.
✔ 8:30 The penalty for being cheap.
✔ 11:29 Investing with too many emotions.
✔ 12:40 Buying a $4,000 3/2 mobile home inside a park and overpaying. (Deal #1)
✔ 15:30 Making repairs and becoming stressed.
✔ 16:33 Selling to high-risk buyers in a hurry.
✔ 18:30 Reselling to a low-risk buyer for long-term cash flow.
✔ 20:28 What would Ryan say to the past version of himself to slow down?
✔ 24:12 What reasons did the first buyers fail?
✔ 26:30 Who’s responsible for defaulted tenants or tenant-buyers?
✔ 27:40 100% default rates for first 4 years.
✔ 28:10 What traits help make a low-risk qualified tenant-buyer?
✔ 31:39 Taking time to screen tenants and tenant-buyers.
✔ 35:07 Rushing into paying sellers for their mobile homes. (Deal #3 and #5)
✔ 39:00 What steps Ryan will do differently moving forward?
✔ 42:51 A crash course in human nature.
✔ 44:05 The best ways to learn and avoid mistakes moving forward?
✔ 46:33 When sellers mislead and lie, we investors typically lose money.
✔ 49:47 Each day brings new things and opportunities when you stay very active.
✔ 51:32 Following checklists and policies help keep emotions out of your investing business decisions.
✔ 53:02 What are Ryan’s mobile home investing goals for the next few months?
Rushing into selling to unqualified tenants and/or tenant-buyers.
In today’s podcast Ryan mentions this type of rushing (selling to unqualified tenant-buyers) may be the most painful and longest lasting common mistake. One or two unforeseen repairs may be corrected and typically overcome quickly; however a problem resident or tenant-buyer may be a consistent headache for months or years to come.
Related video: Calling Past Landlords To Verify Rental History + Recorded Calls
There are so many things to consider while aim to avoid unqualified tenants that this article and podcast will not discuss when it comes to rushing into selling and dealing with potential high-risk applicants. We mention these topics and questions below to help make sure you have clarity in these areas moving forward. If you are unsure, ask question. When selling and/or renting mobile homes consider…
- Thoroughly vetting and screening all adult applicants for your investment property. (This should be the first three bullet points it is this important.)
- Selling for the appropriately profitable win-win price and terms.
- Eventually outsourcing repetitive tasks while buying and selling.
- Proper legal paperwork while selling.
- What paperwork is needed from/to the mobile home park if applicable?
- The ability to explain things clearly to all parties.
- Choosing a closing location.
- Additional instructions for the tenants moving forward.
- Collecting payments and management
Rushing into working with handymen.
As an active mobile home investor it is only matter of time before a contractor and/or handyman will aim to take financial advantage of you. This may happen by stealing your time, materials, money, tools, credibility and/or respect from your company. This coming attempted theft is not something to fear, it is only something to prepare for with confidence, a plan, checklists for handymen/contractors, and paperwork for handymen/contractors.
✔ Confidence: The confidence to stand up for your must-have criteria requirements when it comes to successfully working with a handyman or contractor must be meet 100% or you’ll gladly walk away. Confidence comes from remembering you are in a position of power to always walk away.
✔ A Plan: Understanding which repairs will be corrected and which will not. Understanding your needed repairs, handyman criteria, handyman funnel, sales process, the buyers you are looking for, paperwork moving forward and a management plan.
✔ Checklists for handymen/contractors: Understand what requirements, paperwork, experience, licenses, referrals, proof, insurances, etc. are wanted and/or needed by you and your company when screening handymen. These requirements will vary from investor to investor. For more questions about your specific situation please feel free to comment below or email support@mobilehomeinvesting.net.
✔ Paperwork for handymen/contractors: If you ask 10 different investors what paperwork they require their handymen and/or contractors fill out and sign prior to making repairs you will likely receive 10 different responses. Some paperwork that may be prudent to have filled out and signed by your handymen include a Scope of work agreement, Contractor’s agreement with deadlines/penalties, Project tasks list, Lien releases, etc.
Related video: 50 tips while working with mobile home handymen and contractors
In conclusion every mobile home opportunity is a unique property. Every mobile home seller and buyer is typically in a unique situation. There are usually no cookie-cutter approaches or purchase offers to make with mobile home sellers. It is best to fully understand exactly what you are making an offer on, buying, who you are working with, and the correct steps needed to safely move forward in any win-win transactions.
Listen to John and Ryan’s Podcast Here
Podcast: Play in new window | Download
Subscribe: RSS
8 Comments
mark pierce
August 18, 2018Excellent! Very timely podcast episode guys! Ive made a bunch of the same mistakes when it comes to stick homes but dont want to repeat them in this niche. I can admit when I need help so Ill be listening more and may have more questions to come. For now Im mainly curious about making money with more expensive mobile homes. I have a bigger budget than most and want to know my choices for the more expensive parks and trailers around my area. Ill be investing in the DFW soon after we relocate from the east coast. Thanks for any help!
John Fedro
August 20, 2018Hi Mark,
Thank you for reaching out and connecting. Additionally, thanks for the kind words about the podcast and website. I do hope that these videos and articles have been somewhat helpful to you thus far. Great job with regards to your previous real estate experience. Additionally, great job pushing through these negative experiences and not letting your goals get be not by some negative experiences. With that said I definitely agree with your attitude of, measure twice and cut once, with regards to not making the same mistakes as before. Please feel free to check out this website and if you have any follow-up questions now or moving forward never hesitate to reach out anytime. With regards to your question about making money with more expensive mobile homes definitely check out the link below to a video we created a few months ago. https://youtu.be/mEvPFSOCCBY All three of these deal levels are definitely available in and around your area. Moving forward if you ever have any follow-up questions now or moving forward never hesitate to reach out anytime. All the best.
Talk soon,
John
Jim Jones
August 22, 2018Great information, and love the real-life experience sharing 🙂
We have made every “rushing into” error in the book, so we laughed and grimaced along with each example.
Still, we make money. Mobile home investing is the bomb.
We are finishing our 12th, in a little over 4 years, so about 3 per year. 6 are currently cash-flowing, and one that is non-performing will be our first “what do we do about this?” experience.
Thanks so much for these podcasts.
Jim
John Fedro
August 23, 2018Hi Jim,
Great to hear from you! Thank you for reaching out and connecting. I do hope that this podcast has been somewhat helpful to you thus far. Glad to hear you can laugh at the previously painful lessons from your investing past. Excellent job about your 12th deal! Keep up the great consistent daily work. The credit goes to you. As always, if you ever have any follow-up questions or concerns now or moving forward never hesitate to reach out anytime. Keep in touch.
Talk soon,
John
Lenard Perkins
August 31, 2018Love it! This is a perfectly timed podcast! I’ve been feeling like I have been rushing myself and pushing myself too hard to get my first deal done by the end of August. I am doing things alone so there is a lot I am unsure of and do not want to make a mistakes. Thanks again for this podcast.
Blessings to you.
John Fedro
September 5, 2018Hi Lenard,
Thank you for reaching out and connecting. Very glad to hear that this article and podcast has been somewhat helpful to thus far. Moving forward if you have any follow-up questions or concerns never hesitate to reach out anytime. Great job being proactive and ready to pull the trigger in order to help others in your local area. You are absolutely right that there are a lot of mistakes and errors that are possible moving forward within this niche of investing. However if you have any questions never hesitate to email me anytime and I’d be happy to help if possible. Definitely do not put any pressure on yourself to get things done sooner rather than later. In my opinion you are looking for quality over quantity in the beginning of your business. This is definitely a business with there will be more and more sellers in the future that need help. Make sure to get educated and definitely ask questions if/when you have them. Once you’re ready to take action there are definitely daily strategic actions to be taken towards your goal. Hope this all helps and makes sense moving forward. Feel free to keep in touch. All the best.
Talk soon,
John
Sam Weston
September 10, 2018Me and my wife are thinking about purchasing a mobile home to put next to our house. Our plan is to rent this out for extra money. I’m trying to convince my wife that it is a safe investment. We live in an area of the country where tornadoes are common and she is afraid of the trailer blowing away or damaging our house. Have you had this experience before? Thank you for this website. Any extra help is appreciated.
John Fedro
September 11, 2018Hi Sam,
Thank you so much for reaching out and connecting. First things first, great job being proactive enough to consider purchasing a mobile home to add to your property for extra rental income. I assume that you have Artie contacted the local code and zoning department to make sure that adding this property is legal in your area. You may have to get a survey done however this may or may not be needed depending on your area before adding this home. With that said let me know if you have any more questions with regards to specifically adding the home to your property.
Assuming that you have looked through all the legalities of adding this home to your land I would absolutely encourage you to do so if you both feel comfortable. Remember that the type of buyer or renter you put in this mobile home is up to you so take your time and make sure you thoroughly vet any resident living in your property and on your land. They should be more than willing to submit to any background checks and be proactive in getting you everything you need to verify who they are, their income, and their ability to pay moving forward.
With regards to the home blowing away, safety standards have improved dramatically over the last few decades. In many areas codes require these mobile homes to be strapped down to the earth to prevent them from being tipped over or blowing away when it comes to tornadoes, hurricanes, and earthquakes. If possible, I would encourage you to visit a local mobile home dealer to talk with them about the safety standards new and used mobile homes have. I would not necessarily encourage you to purchase a new or used mobile home from these dealers, however simply go there with questions about safety in specific questions you or your wife may have about the home blowing away in a storm. I hope this all helps and starts to point you in the right direction. As always, if you ever have any follow-up questions or concerns never hesitate to reach out anytime. All the best.
Talk soon,
John
Leave A Response