We often look in awe at people like Warren Buffet, John (Jack) Bogle, and Bill Gross. In hindsight, it looks so easy for them to have achieved the success they have. However, it’s important to realize that they are people just like us. In most cases, they also had to cultivate certain characteristics to help them achieve the success that they have.
The same goes for successful mobile home investors, and in this article, we’ll highlight some of those characteristics for you.
A firm grasp of basic economic/financial concepts
The housing market doesn’t exist within a bubble. It’s constantly being pushed and pulled in all directions by a seemingly endless list of economic factors. Being able to read the relevant signs and trends to make the right decisions at the right time is heavily dependent on being aware of these factors and gauging their effect on the mobile home market.
For example, these economic factors form the underlying reason why mobile homes are becoming an increasingly popular living arrangement and a good investment. Housing and land costs have grown more rapidly for a number of decades now than the average salary. It’s inevitable that at some point, people who used to buy real estate will have to think twice and look for more affordable options.
Basic concepts are beneficial
Of course, this is only one factor. But it shows how vital it is to take a broader look at the economic conditions of the whole country. Another factor that hugely impacts the housing market is a country’s inflation which is itself impacted by a number of other factors.
Knowing and understanding the most fundamental concepts like inflation, micro, and macroeconomics, etc. will not only help you invest wisely but will also make you sound competent!
The same goes for property investment concepts
This is especially important if you end up making sizeable purchases for which you will need to apply for financing. No bank or lender will be impressed if you approach them asking for money on the basis that you “feel” it will be a good investment. In fact, you’ll need to explain to them and base your decisions on concrete, measurable parameters.
Terms such as:
- Acquisition Cost: The total cost of an investment property including all extra fees.
- Cash Flow: The net product of all your income from an investment after all the debt service payments.
- Debt-to-Income Ratio: Which ratio of your debt or commitments is covered by your income.
- Net Operating Income (NOI): Income minus all expenses excluding debt service payments.
- Return on Investment (ROI): The rate at which you will earn back your original capital investment.
Make sure that you understand these and other concepts thoroughly. You should be able to explain them and incorporate them into a business plan or strategy.
Successful mobile home investors aren’t afraid to learn
It doesn’t matter what field of investing you are in. Being a proactive and lifelong learner is one of the most vital traits you can possess. In fact, it’s a good rule for almost every aspect of your life to keep up to date with the latest trends, news, and sources of knowledge.
Just like mobile homes were at one time a new form of housing with little to no information about it, there might be another type on the horizon in the future. This is just one extreme example of why it’s important to keep learning. Other more tangible reasons to stay on top of things are updates in legislation, innovations in the field of manufactured housing, financial trends, etc.
Even the most prominent investors of our age will tell you that they are still learning something new every day. Moreover, all of it somehow applies to how they approach investing in the future.
One of the most essential aspects of this is to follow other successful investors. Some investors chronicle their attempts, successes, failures, and opinions online to help others achieve the same success. The mobile home investment industry lacks any household names so you will need to do some digging.
Great starting points are Mobile Home Investing, Angela Hernandez at Adventures in Mobile Homes, and Mobile Home University. Subscribe to newsletters, listen to regular podcast episodes, and see what sources they recommend to further your knowledge.
Not afraid to experiment with different techniques
There are different ways of investing in mobile homes or mobile home parks. Most investors have either tried and failed. Or they’ve succeeded in multiple methods. This is also why it’s important to constantly be learning as you might have to adapt the ways in which you invest or shift paths completely depending on circumstances.
Right now, there are already a number of well-known methods to invest in mobile homes. For example, one of the most popular is the “Lonnie Deal.” He outlines it in great detail in his book. However, it basically involves buying a mobile home, usually in a park, and selling it at a higher price with a down payment. Monthly interest payments count in as well.
For some, this technique is great as they don’t need to worry about land. Plus, they can get a steady stream of income. Others don’t like their investments not being on their privately-owned property and want more immediate returns.
There are also multiple techniques if you want to invest in mobile home parks. Different techniques can come with different amounts of risk, ROIs (return of investments), require different levels of involvement and have their own pros and cons.
It’s important to get your foot in the door at least. However, you should try a few different methods to find one that suits you best, preferably one that will help you achieve your financial goals.
Know how to evaluate each investment on an individual basis
If you have committed yourself to be a lifelong learner and you have a firm grasp of both economics and property investment, you will be able to judge each mobile home investment based on its own merits.
You will soon learn that almost every single property you come into contact with has some unique feature or characteristic. This makes it impossible to apply a blanket formula to each investment you make. Sure, standard performance measurements can be helpful and should always inform your decisions. But, they should always be taken in context.
Prices, the rate of change in property prices, the job market, population growth, and availability of housing can vary dramatically from state to state and even from city to city. Having the patience and discipline to do your due diligence on each property is vital, especially in the beginning.
A good general knowledge of mobile homes
To really find yourself among successful mobile home investors, you should also make sure you know all about the assets you are investing in. Doing so will not only help you make better individual deals but will also give you a better perspective on the mobile home market, why it behaves like it does, what to expect from it, etc.
For example, there are a number of features of mobile homes that make them vastly different from real estate:
- Generally, they are much more affordable.
- They have certain lifespans.
- Mobility is an option, although this is no longer as common.
- There is a Manufactured Home Constructions and Safety Standards Act that that stipulates the standards they are built to.
- There are unique types of financing plans available.
Because of the inherent differences in the homes themselves, it’s a bad move to jump straight into it from real estate and assume it’s all the same thing.
An appetite for risk
You can’t be an investor without at least a basic sense of risk-tolerance. It’s as simple as that. No matter how sure you are of the potential of investment, something unexpected can always be lurking just around the corner. From the moment you make your down payment or put your money in a piece of property, you are assuming some form of risk.
It doesn’t need to be as dramatic as a natural disaster like an earthquake or tornado. It could be as simple as a tenant not following fire safety coupled with a difficult insurance company. In 2008, many investors, even well-known and highly successful ones, were caught completely off guard by the market crash.
A smart investor has ways to insulate themselves from a disaster by diversifying their investments and not hedging their bets on one investment. However, it takes time, patience, persistence, and good planning to get into that position.
A clear strategy and goal
This is very important, yet often overlooked by new investors. Of course, your goal is to make wealth in some way, shape, or form. However, it’s important to realize that this can mean different things to different people.
Do you want to keep your money safe by using it as capital in physical assets? Do you want to generate a steady stream of income? Do you want a big payday someday in the future and don’t mind taking on a little extra expense until then? What timeframe do you want to work in?
Answering these questions honestly will help you come up with a clear strategy and an end-goal. Of course, it will help you stick to a timeline. You will definitely gain the discipline and patience to make the right decision in an easier way, which we will go into next.
Discipline and patience
As an investor, there will be plenty of opportunities for your discipline to be tested. Particularly when it comes to reading the market. There is always the temptation of succumbing to either your greed or your fears. This means having the discipline to look through your impulses and make a rational decision can be a make or break factor.
An example would be to either sell or buy property in a panic state because the market just surged and you have a fear of missing out. Or maybe it crashed and you are afraid of further losses. Making decisions at the spur of the moment is generally a bad idea when investing.
If you are a savvy investor or you have studied it in-depth, you will know what signs to look for and how to act on them. In most cases, any drastic movement in the market is just temporary and subject to a correction.
The same goes when it comes to the “people aspect” of investing. If someone makes a mistake or does something that upsets you, you should wait a moment. Take a deep breath. Then try to make a decision based on reason instead of your emotions.
“People skills” help
Whenever you invest or go into business in any field related to homeownership, you are going to have a lot of dealings with other people. Whether they are buyer-users, agents, mobile home park managers, other investors, etc. Being able to establish and maintain good relationships with all these people will be hugely beneficial at any stage of your career.
Having people skills doesn’t only mean being amicable and well-liked by everyone. Sometimes it means bringing people bad news, standing your ground, or negotiating a price. If you can do these things while being dignified and respectful, all the better. Having good people skills, or honing them, will also make you appear more trustworthy. This will increase your chance of others listening to you.
If you go far enough in your investment ventures and start working with a team or your own employees, people skills will become even more crucial. And it’ll define what kind of leader you will be.
Success comes from hard work
There is no such thing as easy money! Even though investing in mobile homes or mobile home parks seems to present an amazing opportunity, it will still require putting effort into your business or self-improvement to make it work. Hopefully, this list of characteristics will make it easier for you to identify areas you need to work on to be one of the successful mobile home investors.
If you’re ready to make the jump, you should read up on What’s the Big Deal With Mobile Home Investing? as well as The Risks Of Mobile Home Park Investing & How To Be A Smart Investor. Why not give yourself a headstart on everything you need to know about investing in mobile homes?