Mobile Home Park Due Diligence: Strategic Flights

Due Diligence Hacks for Mobile Home Investors

How can mobile home park investors conduct efficient due diligence on more opportunities anywhere in the country?

Strategic Flights

In the past real estate investors have frequently made a killing on buying out of area property, sight unseen. Many have also bankrupted themselves by ignoring the most basic due diligence. Between the internet and local professionals it is easier than ever to get a real handle on a product without being there. Still, there is no true substitute for putting boots on the ground.

Of course flying or driving the nation to hunt down and evaluate every mobile home park out there just isn’t efficient, practical, or profitable.

Change the game and achieve superior due diligence, efficiency, and returns using ‘strategic flights’.

What is a Strategic Flight? This is a term used for when you want to do due diligence on a market that you don’t live close to. Instead of doing due diligence on just one park, you conduct research on several parks at the same time; thus strategically choosing a flight that has you flying to a place once; and then working in that market for a few days.

Here’s how to maximize this strategy…

Choose Your Destination

Find a destination with multiple parks clustered together in the same area. This will ensure you maximize your time in the air and on the ground. It also clearly helps if at least one or two parks in the area are entertaining offers or will consider selling. How large of an area you are willing to tackle in a single trip is really up to you. Just don’t overdo it, and burn yourself out. It is possible to visit as many as 20 parks in 3 days if you are strategic about it, and plan your time well, in advance. This may also somewhat depend on the area. For example you may be able to go to semi-rural Georgia and fund many mobile home parks within 30 to 60 minutes of each other. Of you could fly in to Orlando, Florida and technically take day trips to all four corners of the state and check out dozens and dozens of markets in distinct submarkets, all in one trip.

Some additional factors which may impact the choice of initial destinations may include:

  • Flight deals
  • Going further afield as you accumulate air miles
  • Realtors and mortgage pros willing to comp your travel if you buy
  • Combining research with vacations

Setting Up Your Trip for Success

Maximizing your flight success by ensuring you get the most out of your time. If you go without a plan and schedule there is a good chance you’ll mostly just be spinning your wheels, and increasing your carbon footprint. Instead, make sure you line up your trip for success.

Contact Owners in Advance

Have your virtual assistants call around the mobile home parks in the area in advance and try to evaluate acquisition opportunities, and set appointments. Get as much intel in advance and organize it for your reference when in the field.

When possible arrange for lunches or doing coffee with park owners either to directly negotiate a deal or probe them for information on others in the area. Ask the owners, “Do you know anybody who is thinking of selling?”

Send out a strategic postcard mailing to all mobile home park owners in the area to plant the seed and idea of selling before you arrive.

Don’t just limit yourself to mobile home park owners and those that are actively marketing their properties for sale. Get in touch with local real estate agents, members of the Chamber of Commerce, property managers, and others that may have more insight into local development and real estate trends, as well as leads on properties for sale now, and in the future.

Getting the Most Out of Your Time on the Ground

  • Drive to every park in that geographic area (even ones you’re not thinking about buying)
  • Drive by potential parks at different times of day to gauge quality
  • Ask yourself whether you’d park your car there at night time (is it safe?)
  • In the evening count how many lights are on to estimate occupancy rates
  • Go to local restaurants and coffee shops to talk to the locals and ask them how they feel about the park
  • Ask local law enforcement about the park and local crime
  • Go to the county assessor and pull up info about park owners if not available online
  • Meet with owners and managers of as many local parks as possible
  • Speak with residents in mobile home parks to get their feedback
  • Take plenty of photos and notes for future reference and load them to the cloud

Follow Up

Set up your future success with great follow up. If you can’t strike an immediate deal with an owner stay in touch and let them know you’d love to make an offer when they are ready. Send a handwritten thank you letter to all those that help out. Remind locals and Realtors you are looking for referrals.

Where will you fly next?

 

Tips to Create a Call Script to Mobile Home Park Owners

How can investors master the phone as a tool for acquiring new mobile home park deals?

Either as an initial prospecting tool, or part of the negotiation process the phone can be powerful for sealing great deals on mobile home parks. So what smart practices can be deployed here? What should you say?

The Phone & Your Mobile Home Deals

The phone can be a great tool for prospecting for mobile home parks to buy. There are a variety of ways to generate lists and phone numbers of mobile home park owners that may be willing to sell their properties.

This includes:

  • For sale signs
  • Online real estate listings
  • Lead lists of park owners
  • Public records
  • Inbound leads generated online or from signs, direct mail, or print advertising

Pro Tip: Use a business phone number for making and receiving business and investment phone calls. You really don’t want your home phone or mobile number out there. A pro number looks more professional, offers privacy, and minimizes risks. This can be inexpensively obtained via various online phone services, or even an additional mobile line. All of these can be forwarded to your existing phone line or email if you like.

Whether a warm or cold call the phone is a power tool for building rapport and negotiating better acquisitions. So what do these conversations look like?

Tips for Creating Phone Scripts

It’s smart to create a phone script for both inbound and outbound calls, warm calls and cold calls. This gives you a structure, keeps you on track, avoids silence when you forget what to say, and ensures you ask the right questions and get all the needed information. While a script should actually be fluid, not set in stone, it will keep conversations progressing, and the more you practice it the more naturally and comfortably this will flow.

In addition to a line by line script most will also want to build up a set of rebuttals. These can be injected into the conversation as objections arise, and steer the conversation back to where you want it to go. Every time you counter a new objection; add 1-3 good rebuttals to your list.

The whole script doesn’t need to be more than a page or two. Having this in writing will also help you scale and eventually have others making calls for you. If you don’t feel like a great script writer you can always hire a freelance writer via outsourcing platforms like Upwork.com.

Making Contact

Thanks to the internet mobile home park buyers can arm themselves with quite a bit of research and data on sellers before making contact. Between local records, Facebook, Google, and other sites investors can highlight at least 1-3 good conversation points and ways to build rapport and relationship quickly. For example; a shared love of raw food, or a new development in town, dislike of rising local property taxes, are shared film and music tastes. These can all be great icebreakers.

This might go something like…

“Hi, is this Joe?”

“Hey Joe, I would have called you earlier but I just got out of the new Star Wars movie premiere with the kids; have you seen it yet?”

Or

“How are you Joe? This is Tim, I would have called you a little earlier, but was just catching up on the news of how high property taxes are going next year – it’s crazy huh?

Then move into…

“The reason I called was it looks like you own the mobile home park over at (blank), and I was wondering if you knew any other park owners in the area that might be interested in selling? Or maybe you’ve even been thinking about it before these rising rates crush values around here?”

Get them talking, and get as much of a feel for what’s important to them as possible.

Talking Business

Once you get over to the topic of them selling their park they’ll probably just want to know ‘your offer’. Obviously you may not be ready to throw that out yet. So power through to collecting information.

“Well, I obviously need to make sure I have all my facts right. How many lots does your park actually have?”

“What type of utilities are onsite?”

“Have you made any improvements recently, or know of any that need to be made?”

“How much are the current rents, occupancy rate, total size of the property, etc.?”

Highlight Your Benefits

Why should they talk to you? Why should they consider selling to you?

Can you convey any of the following?

  • You can close fast
  • You can provide a flexible solution to help them get what they want
  • You have the cash and are a strong, qualified buyer
  • You’ll take good care of the property and their tenants
  • You are experienced in buying real estate

Strategy

  • Remember that you are doing them a favor by buying their park
  • Approach them as if you are qualifying them and their property, not the other way around
  • Understand their fear of being called by a stranger and overcome that
  • Have a goal of getting some form of commitment going in, and don’t get off the phone without it. This could be as simple as agreeing on a follow up call time, or reviewing your offer.

Follow Up

However the call ends, follow up. Do what you say, and on time. This may be emailing an offer, meeting up for coffee, a second call, or just a handwritten thank you for their time to keep the door open for another try later.

Dealing Phone Phobias & Rejection

Not everyone loves talking or selling on the phone. If this includes you there are many phone pros out there that can help. This can range from an inexpensive virtual assistant, to high caliber closer, to a whole team in an offshore call center.

If you are going to call yourself, anticipate rejection, and decide in advance that you won’t be fazed by it. Don’t take it personally. Many people won’t at first understand that you can help them. They’ll often be paranoid and think you are a scammer, so be transparent, convey your position professionally, and keep pushing forward.

Mobile Home Parks As An Under-The-Radar Investment

When you think of investing, what’s the first thing that comes to mind?

Probably Wall Street stocks and funds. That’s the case for most people because stock investing firms market pretty aggressively. On television, radio, print, and online, consumers are bombarded with attractive offers to invest through this company or that one.

Or, perhaps the first type of investment that comes to mind is the single family home (SFH) investment. Investors all over America have discovered the power of real estate investing as a superior alternative to Wall Street investing.

But many investors are becoming frustrated at both types of investments: Stocks and other paper investments are no longer attractive because of their unpredictability; single family homes aren’t as attractive as they once were because house prices are rising and investors are learning that it can take a lot of work to be a landlord of a tenant in a rental property.

Fortunately, you have options – and more options than you probably realized! Real estate investing continues to be a superior and attractive alternative to the paper investments of Wall Street, but there are far more investments out there than the single family residence investment that springs to mind.

The Problem With Stocks And Single Family Homes

Stocks are an obvious market, with thousands upon thousands of financial planners and investment bankers making deals daily to put money where it will perform the best. The average investment banker can produce a cash-on cash return around seven percent annually (but it can and does fluctuate vastly from year to year). A stellar investment banker can produce higher, but at a greater risk to your money.

The stock market is fickle. In order for your portfolio to operate at its top capacity, you need to pay close attention to its performance. Selling and buying need to happen at a moment’s notice, and all for a modest return of seven percent annually? There has to be a better option.

For single family homes, the upside is a steady stream of cash flow monthly. However, if your tenant vacates the home, you are left in a negative cash flow for a period. Renovation and maintenance costs are never certain when purchasing a rental property and can deplete funds and negate positive cash flow even when occupied. These rentals can and do regularly produce ten percent cash-on-cash returns annually thus are a popular choice.

The Surprise Investment That Flies Under-The-Radar

Mobile Home Parks (MHPs) aren’t usually at the forefront of an investor’s mind, but they should be. Here’s why:

Better cash flow: As a real estate investment, they are all too often overlooked as a steady stream of cash flow that is really a single asset with multiple streams of cash flow, very much like a multi-family residence. But unlike a multi-family residence, you can often add more units or even additional income streams!

Lower purchase price: Many mobile home parks are still managed by their original owners who are looking to retire. This means they’re not fully utilized and not always effectively managed, giving you a rapid upside when you invest. And because they’re often overlooked, you are less likely to enter into a bidding war with other investors (which happens in single family homes a lot these days).

Lower costs: Some investors may assume that MHPs are a lot like multi-family residences but that’s not true. Along with the ability to increase cash flow (mentioned above), the costs are lower because MHP owners simply own the ground and they rent out individual lots to homeowners. Therefore, homeowners are responsible for the care and maintenance of the structure while the MHP owner is not.

Growing trends: Investors who love to invest with the trends should know that MHPs are trend-supported investments: As the number of minimum wage jobs in America increase each year, new homeowners still want to own their own home but can’t afford larger suburban structures, so mobile home parks are ideal for them. And there’s another growing trend at play: baby boomers who are retiring and re-evaluating how much they can afford in their retirement are now looking to the comfort and community of a mobile home park to enjoy in their golden years.

Supply versus demand: The supply/demand fundamentals are strong as well: While the demand is growing (see Growing Trends, above), the supply of mobile home parks remains stagnant – in short, it’s difficult to build a new mobile home park so they’re not keeping up with the need. As well, expanding cities are buying up mobile home park land, further reducing the availability of this affordable housing space.

Little-known: Mobile home parks fly under the radar because there aren’t very many of them, and, investors often mistake mobile home parks for trailer parks or for RV parks (both of which are VERY different). Mobile home parks are made up of manufactured homes that are primarily permanent structures that are owned by low income earners.

Summary

When you think of investing, chances are you think of stocks or single family residences. But both of these top-of-mind investments have their challenges – from inconsistency to time-constraints.

Savvy investors are looking elsewhere to find investments that are affordable, in-demand, with plenty of upside. Consider a mobile home park as an investment property. Let everyone else fight over the single family rental properties. Leave the stock market up to the gamblers. Mobile home parks are an investment to put on your radar.

Top Numbers A Mobile Home Park Investor Needs To Know

What numbers do you need to know to make great mobile home park investments?

There are many, many numbers thrown around in the real estate investment arena. Here are ten that mobile home park investors need to know for each potential investment.

  1. Cash on Cash Returns

Cash on cash returns are the most important number for mobile home park investors. While this figure may depend on many of the others below; it shows what you actual cash return is, and what you are really making. This figure can then be used to compare investment options. To find the cash on cash return divide you annual before tax income by the actual amount of cash you plan to invest.

  1. Cap Rate

Capitalization rate is commonly used to compare commercial real estate investment opportunities. The cap rate is derived by dividing the annual net operating income (NOI) by the value of the property. So a $1M property with a $100k annual NOI has a cap rate of 10%. This is the equivalent to price-to-earning ratios in the stock market. However, note that the true cap rate changes over time. The income ought to go up, and so should the property value. Investors often forget this. The result is a far poorer cap rate in the future do to substantial captive equity. For example; if your property value goes to $2M, and your income stays the same you now only have a 5% cap rate. Tap this equity and expand to keep you capital and investments performing better for you.

  1. Cash Flow

How much cash flow will this property actually throw off? Gross and net. There can be a big difference. Big gross numbers mean nothing if there is negative net cash flow. However, there can be advantages to high gross numbers. This can act as a nice float during the year.

  1. LTV

What loan to value can you borrow against this property? What LTV will you be able to refinance at? What LTV can future borrowers expect to achieve? How will that impact the resale buyer pool available or potential need to offer seller financing?

  1. Number of Units

How many units or lots are in a given mobile home park? This can impact consistency of income. Also consider if there is room to add more units.

  1. Per Unit Rent

How much is the rent and income per unit, door, or lot? How does this compare to other options in the area?

  1. Utilities

What utilities are to be provided? Who pays them? How much are they? This will impact your bottom line.

  1. Taxes

In terms of importance taxes are right up there with cash on cash returns. How much are the property taxes? How much are they likely to go up? What can you do to minimize property taxes? Then there are income taxes. How will the returns from this mobile home park impact your overall tax burden? How can you minimize that and turn it into a positive? How much will you really net after taxes?

  1. Local Unemployment

What a local unemployment rates like? How does this compare to other locations? Mobile home parks can benefit from serving lower income housing needs, but if people don’t have income it doesn’t matter how cheap the rent is.

  1. Local Vacancy Rates

What are local vacancy rates for rentals and other mobile home parks? How many units or lots are vacant or are going vacant in this park? Build this number in as an allowance to ensure you stay in positive cash flow territory.

How To Perform Due Diligence On A Market

What should mobile home park investors be looking at when evaluating markets to invest in?

Make no assumptions when it comes to where to invest. Sophisticated real estate investors conduct thorough market research before investing. They know that all real estate is local, and winning property investments are all about “location, location, location.” So what factors do savvy investors look at? What indicates a good market to invest?

#1. Landlord Friendly States

 Intelligent buy and hold real estate investors will normally filter out and focus on states based on their bias for ruling in favor of landlords versus tenants. Even if you plan to resell your acquisitions relatively soon this will be a factor for the next buyer too. Some states like Florida are friendlier to landlords. Others such as Massachusetts are decidedly in favor of tenants. If you don’t want tenant issues, look for states with legal systems in your favor.

 #2. Top Ranking MSAs

Once states have been shortlisted investors often boil their search parameters down further by MSAs. Larger Metropolitan Statistical Areas are seen as being more sustainable and profitable. Larger population concentrations generally foster more transaction activity, and in turn price appreciation. They may also be more stable over the long run compared to a small rural town which could more easily go bust and become a ghost town in a very short period of time. More people also suggests more demand for rental units, lower vacancy rates, and the potential for faster rental rate increases.

#3. Trend Setting Stores

Certain stores are known for leading growth in new areas. It could be that their research enables them to move into areas which are about to explode. Others argue that certain brands drive real estate and population growth. Both may be true. Some examples of this include Walmart, Home Depot, and McDonalds. Recent data even shows that real estate located nearer a Starbucks is worth more than other properties.

#4. Increasing Population

Population growth is incredibly important to real estate investors. There may be some well-established communities in the US which are actually beginning to age and die off. Others have proven to growth decade after decade. Population growth is directly linked to demand for rentals, and rental rates. Wikipedia offers a quick resource for tracking the population of a given city. For example; check out Jacksonville, Florida and you’ll see the US Census reports positive population growth dating all the way back to 1850, with the exception of one year (1960). Another tool for getting further ahead in the data is U-Haul trends. U-Haul regularly ranks top destinations and measures the moving volume in and out of cities.

#5. Increasing Employment

Strong employment not only dictates the ability to rent and for how much, but also how tenants will perform. Clearly mobile home parks are unique in that they can benefit and thrive in tough times, but if people don’t have money to pay, or end up leaving town for jobs that can be a challenge. Remember that “a rising tide lifts all boats.” The United States Department of Labor, Bureau of Labor of Labor Statistics reports on local unemployment rates and rankings.

#6. Diversity of Employment

Diversification and type of employment and industry is critical to the sustainability, consistency, and growth of real estate fundamentals too. Look at what happened to oil reliant towns when oils prices crashed. It means significant layoffs. Without a good balance of industries entire metro areas can go broke. Look at Detroit to see how bad it can get. The end of the auto industry literally bankrupted it, and has left much of the region as ruins and urban war zones. Despite its prominence Silicon Valley is incredibly reliant on tech. A bursting of a tech bubble could certainly have a significant toll. Again it is important not to make assumptions here. Look at the facts. You may be surprised what areas are actually both responsible for a significant amount of agriculture, imports and exports, technology, manufacturing, and financial services; all at the safe time.

#7. Type of Employment

How about the balance of outsourced work versus work that cannot be outsourced? Brick and mortar industry which is hard to move may be a good sign. Is this market supported by organizations that can’t afford to move, or can’t do their work elsewhere? Is the talent pool so strong that other businesses will come to feed on it?

However, it may be wise to take a more up to date view of this dynamic given the current transition from the industrial era. If a destination becomes too expensive and work can be outsourced, there could be a significant flight of jobs and population. The opposite can also be true today. The majority of the population is no longer tied to the urban core or major business cities for their ability to earn and provide. If individuals can live further out, get more real estate for their money, and not earn any less, they will be drawn to that. This doesn’t have to mean suburban or rural either. Back in Detroit the city erected a giant sign calling the world to outsource their work to Motor City.

#8. Occupancy Rates

How strong are local occupancy rates? Higher rental occupancy rates secure consistency in income, increase property value, and provide to raising rents and being more selective in tenants and terms.

#9. Affordability

When surveyed analysts replied that they believed the single most important factor for real estate was affordability. While mobile home parks might weather a lack of affordability best, this can impact gross income potential. How affordable are properties? Are wages strong? Is the destination affordable enough to keep attracting smart money and serious employers?

#10. Trends

What other trends are in play? What trends could affect a potential acquisition during the time you plan to hold it? Is the destination becoming more or less fashionable? Who is buying and holding property here? How will that matter if the economy goes south, a foreign economy goes under, or currency exchange rates change? What about property taxes? Are they headed up or down?

Summary

There are a number of fundamentals that savvy investors look at when selecting a market to invest in. Never make assumptions if you want reliable investment returns. Fortunately the internet can make it incredibly fast and easy to dig up the data.

Mobile Home Park Investing: The Economies Of Scale

One of the big perks of mobile home park investing is the economy of scale. So how does this show up, what tangible advantages does this offer investors in this sector?

The Economy of Scale

Sophisticated investors and heavy weight funds have long be known for investing in larger properties with multiple tenants. Whether this is office buildings, multifamily apartment buildings, or mobile home parks, this is often seen as being due to needing to put a lot of money to work. But it is more than that. These investors understand, and seek out the economy of scale. Properties with multiple units offer this advantage. This is in stark contrast to buying single family homes.

Vacancy & Cash Flow

A single family residence can be a good investment. However, trying to manage a portfolio of single family rental homes can be a completely different story. What happens when you have a single unit income property that goes vacant? It starts costing you money every month!

Contrast this with holding a mobile home park with 10 or more lots and tenants. Even if 30% of those tenants leave or stop performing investors ought to still be generating a positive monthly income. The chances of 10 units in a mobile home park all going empty at the same time is far lower than a single family home going vacant at any time. This not only ensures positive returns, but consistency in cash flow month after month.

ROI on Property Improvements

The return on improvements for multitenant properties is far greater. An improvement to community property can raise the value and rent on all units. For example; putting in a swimming pool can raise the value of 25 or more units in a mobile home park. Contrast that with spending almost as much to put in a pool for a single family home, or having to fork out for 25 pools for a whole portfolio of single family properties!

Efficiency in Property Management

The most obvious and significant benefit of scale that mobile home parks offer is when it comes to property management. Having multiple units on the same lot means dramatically slicing down the time and costs of property management. This applies to the number of team members and vendors you need to recruit and manage, and their workloads. This also rolls over to researching acquisitions, marketing for tenants, and screening tenants. With a mobile home park just one $15 sign can be used to market for multiple tenants repeatedly whenever there is an upcoming vacancy. To compare; multiply the marketing and due diligence costs by each single family home that you own.

Financing

There are great advantages in the economies of scale when it comes to financing too. Having 10 or more units on one property means that many fewer loans you’ll need. Some borrowing costs are related to price and value, others are not. Needing just 1 loan versus 10 can definitely reduce acquisition and operating costs. That increases your income and bottom line. Just as importantly is reduction in workload and risk. Managing ten sets of loan documents, property taxes, invoices, and insurances for just 10 units is much more risky and time intensive than 1. Mobile home parks mean less likelihood of making a mistake or being scammed.

Acquisition and Resale Efficiency & Costs

Being able to acquire 10, 20, or 100 units at a time dramatically increases efficiency when it comes to sourcing and acquiring investment properties. That also applies on the flip side when liquidating assets and restructuring portfolios. Do not underestimate the importance of this. In a recent radio address, speaking on his new book ‘Money’, Tony Robbins highlights the fact that fees make a massive difference in profits and wealth building. Even a 1% difference in costs can add up to being hundreds of thousands of dollars up or down over the years. Seize the benefits of the economy of scale, and put them to work for you.

Using Virtual Assistants to Find Deals

How to use remote staffing to source and secure mobile home park deals…

Outsourced staffing solutions can be incredibly powerful for finding more investment opportunities affordably and efficiently. So where do you find them? How do you set them up with effective systems? What else can they do for you as a real estate investor?

Upwork: The New Way to Hire & Work

Outsourcing is now the way to hire. It has gone from a fringe tactic used for giant offshore call centers to the primary go-to solution for all types of work for both startups and the world’s giant real estate funds and websites, and tech companies like Apple.

Outsourcing means employers don’t have to have large physical premises or the liability that comes with in-house staff on old-school payrolls. It offers access to better talent at lower cost, and without the overhead and risk, while simply using team members on-demand when needed. And they are easier to scale up or down depending on your requirements.

Upwork.com has emerged as the leading platform in this arena. This outsourcing portal is the merger of the two previous giants in this space; oDesk and Elance. It offers instant access to thousands of workers across the USA and around the globe. It provides a one stop shop for recruiting, screening, bookkeeping, and managing remote employees and contractors more affordably and efficiently.

Using Virtual Assistance to Find Mobile Home Park Deals

One of the great uses of virtual assistants is for sourcing new acquisitions. There are a number of ways to leverage them to do this. For now let’s focus on how to use remote VAs for calling and prospecting for deals by phone.

The Process

  1. Provide Potential Seller Lists

Your remote phone agents need someone to call. So provide them with lists to mow through. Mobile home park investors can purchase and rent these types of lists from a variety of lead list sources. This may include sources such as Experian, Infousa, and Listsource. Alternatively investors can use other virtual assistants to research and generate their own lists and databases of mobile home park owners online. Real estate agents, banks, phone books, and online real estate portals can also offer sources of lists.

  1. Start Calling

Have your remote team begin calling mobile home park owners and probe them for interest in selling. You’ll want to provide them a good script to work from, and a list of rebuttals to common objections. You may use another remote assistant to craft your scripts if needed. The outcome of these calls should be setting up follow up, setting an appointment for qualified owner-sellers to speak with you, or getting them out a preliminary offer. Offers may also be automated using templates, and set criteria, and another level of virtual assistance.

  1. Follow Up

All contacts should be entered into, and worked from an online database. This ensure you can track work being done in real time, and the process can move along seamlessly. This may range from basic online cloud based project management software to specific lead management and automated follow up programs. Some potential solutions include Basecamp, Trello, Google Drive, and Velocify. Some systems will simply allow for follow up dates and formats to be entered, others can actually automate follow up and reminders for sending out thank you cards, direct mail, email, and phone follow ups.

  1. Reward

There are a number of ways to compensate these team members. This may include; hourly base pay, pay for performance based upon appointments set, or deals done. In any case it is probably wise to offer some form of incentive or bonus for deals you actually buy and close on.

Recruiting, Screening & Managing Remote Staff

Tools like Upwork can make remote hiring and management very easy, but there still needs to be some thought and effort put in to achieve the best results.

Recruiting Remote Assistance

Great hiring relies on several elements including good job postings, screening applicants, finding the right match in quality and compensation. Upwork puts thousands of phone agents at your disposal. Recruiters can browse resumes and profiles or post jobs and let them find you. Just note that most VAs don’t want to be called ‘assistants’ unless they’ll be doing assistant activities. Most take their profession extremely seriously; and want to be recognized as sales pros, etc.

Do not underestimate the importance of your job description. Find balance between being precise and not scaring off the best qualified. This is an advertisement to work with you. You don’t want to have to weed through hundreds of unqualified applications. But you do need to appear easy enough to work with that great talent will be interested. When it comes to compensation keep in mind the caliber of the people you want, and importance of their role. If you split the role between making contacts and setting appointments with a more solid veteran closer following up you may be able to optimize your investment. But with so few mobile home parks out there you don’t want to burn opportunities with hiring too cheaply.

Screening Applicants

Upwork makes screening relatively easy and quick. Look at feedback ratings, length of history working remotely, and reviews by previous employers. Look beyond the surface to make sure this is a match for this position. Someone with real estate experience is going to need a lot less coaching. If they’ll be on the phone; test them out on the phone. If they’ll be emailing for you; have them email you, and so on.

Optimizing Your Team

Don’t underestimate the importance of cultivating a great community and strong team. This may be even more important when working remotely. It’s hard to find great people. When you do; don’t let them go. Keep them connected. Let them know how much they are appreciated and that their input in making a difference. Say “thanks”.

There are many other roles which can be outsourced too. Virtual assistants can be leveraged for other deal hunting efforts such as creating direct mail, Google Ads, and website copywriting. Others may be used for remote property management.

How To Avoid Self-Sabotaging “Analysis Paralysis” When Investing In Mobile Home Parks

One of the greatest stumbling blocks for aspiring investors is over analysis. It literally causes financial paralysis, with dire consequences. How can more hopeful investors overcome this counterproductive hurdle in order to realize more of the results they really crave?

The Importance of Due Diligence

Thorough due diligence is necessary. By no means does the following suggest that an investor should not be thorough in their research, learning, and vetting of potential investments. Mobile home park investors should know the potential for the market they are investing in, the real value of the property, the real rents, real repair needs and costs, and how to protect themselves throughout the process. However, over analysis can absolutely be self-sabotaging as well.

7 Paralyzing forms of Analytics

#1. Analyzing too Many Asset Classes

Diversification is wise. Yet deep analysis of too many asset classes can definitely be counterproductive, confusing, and draining. Not even the most successful are masters of every type of investment. If you feel stocks should be in your mix then grab a broad mutual or index fund and let it roll. If you’ve got to have gold in your portfolio, just grab some and get it done. If you think single family homes are a sound investment then buy yourself a home. Then move forward focusing on investing in mobile home parks.

#2. Analyzing Too Many Markets

Even within a domain such as mobile home parks there can be many diverse geographic locations to cover. There are mobile home parks all over the USA, and even abroad. Trying to evaluate the ins and outs and quirks of these varied markets all at the same time can be a massive burden. Instead hone in on a few key areas, start investing, and then move on while you already have money working for you.

#3. Becoming a Pro-Forma Junkie

If numbers and spreadsheets are your thing it can be easy to be caught in the modeling trap. What if X happens? Or what will happen to Y if I do ABC? You can do a lot of this after making an acquisition. If you spend too much time in this trap upfront you’ll miss out on deal after deal.

#4. Learning vs. Doing

Boosting your investment and real estate education is great. Sadly some use learning as a way to fuel their pension for procrastination. Some will spend years learning as the opportunities slip away and their peers gain both knowledge and financial rewards. Knowledge is not power until it is turned into action.

#5. Demanding too much from an Investment

Another way to permanently sit on the bench is to demand too much from investments. You can invest in good deals and expect great results, or sit on the sidelines demanding unlikely scenarios and worry about what could happen. This sometimes happens to those learning from out of date materials which offer strategies and calculations that no longer apply or work in the current market. For example; private lenders may have scaled back to loaning 50% to 60% on very conservative valuations during 2008. Now they have to offer 90% LTVs and even repair funds based on the future value of the property after improvements. Or it can be a mindset change that is needed.

#6. Timing the Market

There can be benefits of buying and selling during different phases of the market, and depending on various outside factors. But in any asset class the gains normally go to those that simply consistently invest. Those that try to wait to find the perfect day and hour, normally only notice it after it is gone.

#7. Analytics as an Excuse for Fear

The most successful don’t pride themselves on being the best analysts. Instead they are the bold actors that take action when others are fearful and timid. Even the best investment gurus admit they know they will absolutely get it wrong sometimes. But they can’t win unless they take shots.

Kicking Analysis Paralysis to the Curb

Action is the antidote for analysis paralysis. So take action.

  1. If there are specific facts you need to know list and learn them this week
  2. Set your goals
  3. Set a hard timeline for investing
  4. Get an accountability partner
  5. Get started with small wins and milestones
  6. Reward yourself with every positive action you make

The Broken 401k & Finding a Real Retirement Strategy

401(k) plans aren’t working for Americans. What’s wrong? What is a truly viable retirement plan for individuals?

New data suggests that the 401k retirement plan just isn’t working. It is even worse for those without an organized retirement plan of their own. So what has gone wrong? Just how bad is the situation? What might the best retirement strategy be now?

The Data Is In

The figures from Business Insider, the Economic Policy Institute, Federal Reserve Survey of Consumer Finances, US Census, and The Fiscal Times reveal a fractured system, with great disparity between how individuals are doing at preparing for retirement.

Key Facts from the Business Insider Report:

  • Average families with a 401k or IRA had $95,776 in their accounts
  • The average 401k and IRA balance has risen by around $4,500 since 2001
  • Unfortunately of Americans as a whole almost 50% have zero saved
  • The median family has $5,000 saved
  • The average for those approaching retirement between the ages of 56 and 61 have an average retirement account savings balance of $17,000
  • The top 10% of savers have at least $274,000
  • 82% of Americans without high school diplomas do not have a retirement account

The Big Switch

Business Insider notes that the “switch to 401(k) plans began at the same time that Social Security benefit cuts kicked in,” adding that “401ks are much more lucrative for Wall Street fund managers than pensions.”

It is also important to remember that Social Security was never meant to provide pensions in the way many need them today. They were designed as short term supplemental assistance for a limited amount of time. Now more than 50% to 90% of Americans’ only hope for income in retirement appears to be Social Security. And given the instability and shortfalls of the system it is just hope.

The most significant factor in all of this is the shift from defined benefit plans to defined contribution plans. That really applies to traditional 401ks and Social Security. With defined contribution individuals have to put money in, but really have no guarantee of a set amount of money coming out. Yet, reliable income remains the most pressing need for those approaching retirement. The size of a nest egg or balance sheet is virtually irrelevant, when what you need is spendable cash every month.

Traditional 401ks and social security can’t really guarantee defined benefits. That is their biggest flaw, in addition to the fact that people aren’t putting aside enough savings. The solution then is for individuals and families to both find a way to invest more, and increase the predictability and reliability of income thrown off by their investments.

Finding a Real Retirement Strategy

How should individuals be planning and preparing for retirement?

Look for:

  • Solid assets with low volatility
  • Inflation proof assets
  • Sound diversification for safety
  • Tax protected investments

Some of the tools for accomplishing these things may include; paying off your own home so that it can be leveraged with a reverse mortgage in retirement, as well as rolling over to, or establishing a self-directed 401k or IRA. These accounts can be used to invest in a wide variety of assets, including income producing mobile home parks.

The Role of Mobile Home Parks in Your Retirement Portfolio

Mobile home parks are one of several types of income producing real estate assets which can be powerful retirement tools.

The advantages:

  • Monthly and weekly passive income
  • Tax benefits
  • Ability to invest in them via self-directed retirement accounts
  • Move with inflation
  • Easy to diversify
  • Ability to build wealth and cash flow simultaneously
  • Low volatility
  • Growing demand with limited supply
  • Ease to understand
  • Personal control over asset value and performance

For many a couple of mobile home park investments may be all they need to secure their own retirement and financial future. They may provide free housing, monthly spendable cash, and build equity which can be passed on to future generations and other heirs. Even a modest park with 20 units, throwing off a meager $100 in positive cash flow per unit, each month is $24,000 in passive income per year. That far eclipses Social Security benefits. Multiply those results and a $100k a year passive income level isn’t too hard to achieve in this sector.

Summary

The data shows that the vast majority of Americans are desperately underprepared for retirement. The financial system seems to continue to trend away from providing a meaningful and reliable solution. Those that want to be confident in their future finances and income can take things into their own hands. A part of that plan could be mobile home park investments for cash flow and long term wealth building.

Top Reasons to be a Cash Flow Investor

What’s so attractive about becoming a cash flow investor?

What are the advantages of being a cash flow investor? How does this compare to the other investment options out there?

Cash Flow 101

Cash flow investors prioritize the income thrown off by investment properties. This does not mean forgoing the potential for equity growth via appreciation or value add improvements. But cash flow and yield comes first.

In the past making lump sum gains was often the top priority of many investors, but that’s changing. Plus, what do you do when you have wealth you need to invest? From leading finance gurus to Harvard and MIT professors like Robert Merton, experts are increasingly highlighting the importance of passive income investing. The bottom line is that what most really want is more cash coming in each month. That can be far more valuable than a physical or virtual pot of gold. The size of a nest egg is almost unimportant. It can go up and down, be vaporized, etc. What is more important is how much cash you can actually use, or how much cash flow that capital can buy. This is true for everyday living now, and for retirement.

The Exception: Note that it is important to be wary of the “it’s all about cash flow mindset.” Cash flow is critical, but that means sustainable, positive cash flow. Smart leverage can be used to achieve better cash flow, but when investors cross the line to speculating and over leverage, or allow their expenses to consistently grow to exceed income; that can become unsustainable.

The Benefits of Cash Flow Investing

Flow of Money

Mobile home park investors are able to secure a long term, virtually infinite stream of incoming monthly payments. That can ultimately far exceed the value of the property and capital gains. It’s ‘mailbox’ money that comes every month, and can be spent (or reinvested), without depleting total assets, or how much will come next money. Consider it an early pension. Once your flow of income from investments exceeds your living expenses you can retire with confidence. That applies whether you are 17 or 70 years old.

Passive Income

Investing for cash flow means cash coming in without being tied to your labor, number of hours you put in, or your ability to keep working. If you get sick, injured, have to take care of family members in crisis, or just want to head off on vacation; you still get paid.

Money Regardless of Market Fluctuations

Cash flow from mobile home parks provides income regardless of the market ups and downs, and value fluctuations. Your mobile home park could go up or down in value by $100k with no difference in your monthly income. That can’t even be said of the stock market. If you hold stocks and they plunge in value your income can plunge too, as can the amount you can withdraw without depleting your nest egg.

Never Getting Stuck

Those investing for appreciation and even flipping properties can get stuck if the market changes on them. Appreciation is nice to have. It’s a nice bonus. But for cash flow investors it is just extra icing on the cake. They are already making plenty of money from income.