In Real-Life Real Estate Investing, It Is About Whether You Win or Lose
Have you ever played Monopoly and through well-played strategy ended up with expensive, money-making properties? Did you always win the game when you played?
I will admit to being competitive when I play games. And I will admit that many of our ideas as adults are probably shaped by childhood games. Yet the properties in which I now invest as an adult are the kind you’ll never see on a Monopoly game board. Who would choose “Trailer Park Way” when you have the option of “Park Place”?
It would be nice if someone just handed me cash and said, “Invest this in real estate for me, please, and keep all the money and profit for yourself.” In a game, this can happen, but in real life, it does not. Still, that doesn’t mean I can’t win the game. It simply calls for some creativity in your thinking and in your investing.
Having taught aspiring real estate investors for more than 14 years, I am often asked, “How did you get started investing in mobile homes?” For me, it was a necessity.
When I started investing, the real estate market was volatile. I could tell that the local market would change quite a bit in the six months as the 2002 Olympic build-up in Utah finally subsided. (Guess what? I was right!)
At the time, the Days On Market (DOM) was longer than 90 days, with an increasing inventory and some drops in the appreciation rate for entry-level houses. The unemployment rate was low, as there had been a couple years’ build-up for hosting the Olympics. But I knew joblessness was going to increase due to the inevitable loss of jobs post-Olympics.
I was terrified to think of getting into a property for $200,000, only to see the market shifting before I could get it rehabbed and back on the market. Plus, I wanted more than an 8 percent return, but the rentals in the same area were just offering that amount.
I wanted a low-cost investment with a high cash-on-cash return that would generate a nice ongoing income. For me, that meant creating a business out of investing in mobile homes on leased land.
So how do you get started in a mobile home investing business? First, ask yourself some core questions. It is important to know whether you are able to make hard decisions, take chances, stretch yourself and what you already know, and get dirty by doing some work yourself. If you believe you have this entrepreneurial spirit but not a millionaire budget, you may want to consider a mobile home investing business, too.
Let me give you a head start on some other things you also need to consider. See how you measure up to the following questions:
No. 1: Is there a future investment opportunity in your area? Identify where the mobile homes are located in your area of interest, whether you’re investing locally or in another region or state.
No. 2: Once you find these gems in disguise, are you willing to invest in that community? Do you feel comfortable in that area? Does the community seem well-maintained?
No. 3: Can you look past the stigmas and stereotypes of mobile homes and mobile home parks?
No. 4: Can you invest in that community? Are there obstacles to buying mobile homes there (such as cost of entry, desirability of community, DOM of mobile homes and willingness of the landowner to let you invest there)?
No. 5: How much money do you have with which to invest in mobile homes? Does the local market offer opportunities at that level? Can you afford to risk that amount in an investment? If not, do you have other sources you can tap into for investment funds?
Did you feel comfortable after that barrage of questions? Don’t be overwhelmed. Just realize that once you do the appropriate amount of due diligence, you will be on your way to making your first deal. Then, you will be on your way to understanding how to make a nice profit and income from mobile home investing.
It is a safe playground if you don’t have ample disposable money but are seeking a nice return and limited competition. If you don’t have the time or energy to invest in starting a business in mobile home investing, you might be better suited to finding someone who is already investing in mobile homes and with whom you can form a joint venture. Instead of giving up on the opportunity, consider being an investor in mobile home investment properties. There are many ways to play the mobile home investing game. Play to win.
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