In the same theme as the bestseller “The 7 Habits of Highly Successful People” we would like to present our list of the habits of successful mobile home community buyers, along with thoughts on how to create these attributes and what the impact will be.
#1 A hunger for knowledge
There is a general rule that you can never know too much about your industry, and that quest for endless knowledge is an important part of being a successful mobile home park investor. In addition to all relevant mobile home park publications and writings, we also read and attend books and events of parallel industries, such as the apartment sector. Personally, I like to read biographies of military and business leaders to look for new ways to approach problems and opportunities. The bottom line is that you should attempt to always be open to and searching for new, relevant ideas.
#2 A sensible plan on what to buy and why
You should be able to write on a single sheet of paper exactly what the mobile home park you are looking for would look like in terms of size, infrastructure and geographic location. You should memorize what the minimum targets are on financial performance, as well as what your near and long-term goals are. And this plan should be based on reasonable optics and not just best-case scenarios – don’t cheerlead yourself into unreasonable expectations.
#3 A huge volume of deals to review
Volume is key in finding a good mobile home park to buy, as well as in finding a good mobile home to fill a vacant lot and a good manager candidate. With that assumption, commit to using volume to your advantage in everything you do. Volume takes effort and is never the easy way out, but it is the best way to proceed. Make a tone of calls, look at a ton of emails, see creating volume as a big part of your job. Don’t just call 5 brokers, call 50. Don’t just direct mail 100 park owners, mail 1,000.
#4 Making a ton of offers
Everything above is of no value unless you can establish an agreement with a seller, and that requires making a ton of offers. Every deal that comes your way (that has the raw material to be profitable) should be worthy of making an offer, even if it’s for far less than asking price. Saying to the seller “here’s where I’m coming from as far as pricing…” is not something to dread. We once called a guy on a listing that said “$2 million FIRM” and offered him $1 million and he took it. You never know until you ask.
#5 Focusing on being a “deal maker” and not a “deal killer”
Anyone can be a “deal killer” – you can fault in every mobile home park on earth. There’s no perfect park. Newer ones have lesser locations and older ones have faulty infrastructure and density. A successful park buyer focuses on figuring out how to make any deal into a winner with the thought “under what conditions would this deal work for me”. Even difficult deals can be cured with zero down/seller financing and other creative techniques. Be a “deal maker” and you will be ahead of 90% of other buyers
#6 Knowing their (and the property’s) limitations
Do you remember the scene in “Saving Private Ryan” where they have to come up with a plan to break through the German defenses and get off Omaha beach? They gather their weapons and ammo and come up with a plan based on available resources. Park buyers do the same every day: they must make a constant assessment of the tools at hand and what can realistically be done. If you have $100,000 in capital, you should be looking for $500,000 deals and not $5 million deals (unless your plan is to sell an assignment). If you don’t have big capital for emergencies, then don’t look at a park with a packaging plant (unless it’s new). Don’t let optimism impact your performance by giving you false goals. Work with what you have in a smart fashion.
Probably the most important trait of any successful mobile home park investor is simply persistence and determination. That’s an old, worn-out line that you hear from everyone including health clubs and stockbrokers. Teddy Roosevelt once gave the famous meaningless expression “endeavor to persevere” which is not much of a message. Let me instead give you an illustration of the not-cheesy actual meaning of the concept. I once owned a 1940 Cadillac that I bought for $7,500 in Iowa in non-running condition. I had it towed to an old car mechanic in Dallas. When I went to pick it up, out front of this little rundown garage was a $500,000 1930 Cadillac V-16. I asked the mechanic “who owns that car?” and he told me “I do”. That puzzled me, as this was a two-bay shop on the wrong side of town and there’s no way that he could spend that much on a car. Then he told me the story. He always wanted a V-16 Cadillac. He called on every ad in every car magazine and newspaper, followed up on every lead, searched everywhere for a broken one he could fix at a cheap price. Then he saw an ad in the Dallas classifieds that said “Cadillac pieces for free”. He called on the ad and a widow told him that her husband had left a bunch of car pieces in the garage and the first taker could haul them away for free. He ran over and found that it was a completely restored V-16 that simply need to be re-assembled, which he had no problem doing. That’s what persistence is all about. It’s a mental quality that doesn’t take no for an answer and has a perpetual sense of time urgency.
There are many components to being a successful mobile home park buyer. However, these are perhaps the seven most basic and critical. There’s no reason why everyone can’t succeed in the mobile home park business if you follow this basic map.