Intro:    Welcome! This is the Real Estate Investing Mastery Podcast.

Joe:   Hey, everybody. Welcome to another great, awesome, powerful real estate investing mastery podcast. Alex, you know what, we’ve been doing this for almost five years now and I really…

Alex:   Five years. It seems like yesterday, when you said four.

Joe:   Maybe it was.

Alex:   Well, it’s very possible because time just flies. I mean, I was talking to my wife the other day, I was like, man it’s almost spring.

Joe:   I know.

Alex:   The year’s almost over.

Joe:   It’s… The year’s almost over.

Alex:   It feels like it, doesn’t it? It’s just like, it like dawned.

Joe:   Well, I love this time of the year. It’s spring when we’re recording this.

Alex:   Yeah.

Joe:   I… We just moved into this new house and I’m looking at across 2,500 acres of state park.

Alex:   Wow!

Joe:   Three of those 2,500 acres is our backyard but seeing the… We moved here in December so I’ve not seen any leaves. It’s been three months. I’ve not seen anything green on the trees since we moved here.

Alex:   Yeah.

Joe:   Starting to hear the birds more and more, starting to see some green on the trees a little bit.

Alex:   I saw robins this morning so that’s a good sign.

Joe:   Okay. Well, this isn’t the bird real estate investing, the bird podcast…

Alex:   Yeah, but robin means spring.

Joe:   Oh really? Okay.

Alex:   Yeah.

Joe:   All right.

Alex:   I’m not an ornithologist or anything but you know.

Joe:   All right, All right. So, I want to get into this right away.

Alex:   Let's go.

Joe:   We have been doing this… There’s a reason why we’ve been doing this podcast for 5 years now. It’s because it’s a lot of fun. I enjoy…

Alex:   Yeah.

Joe:   I enjoy hanging out with Alex virtually, through Skype. I enjoy talking to these guests that we have on the show, teaching people what’s going on in our business, what we’re, how we’re helping other people. So it’s going to be an exciting interview because Alex, we’ve never talked to anybody about mobile home investing before.

Alex:   I have not actually.

Joe:   And by the way, Alex has his cell phone voice on today. .

Alex:   Well, actually, actually, you know what, now, I take that back. I have. I’ve had… And I bet you our guest has heard of this guy. Lonnie Scruggs was actually here in my local market.

Joe:   Yeah?

Alex:   At one of… He lives very heavily involved with the REIA here. Lonnie Scruggs was like a tin can investing or something like that but he was a, he was a giant when it came to mobile home investing.

Joe:   Yeah, and John, have you heard of Lonnie Scruggs?

John:   Yes. Yeah, you two are… I’ve just been sitting back here. I got a big smile on my face. You two are hilarious. This is going to be a very good podcast. But, yeah. Lonnie Scruggs is the grandfather in this industry.

Alex:   Hear that?

John:   But…

Joe:   I’ve heard everybody talk about him but I have never heard him talk. I’ve never heard of… I never heard of any of his presentations.

Alex:   Well, unfortunately, you would have to buy a tape or a CD or something because he is no longer with us.

Joe:   Yeah, that’s sad. I know he passed away recently. But his teachings live on and so…

Alex:   Absolutely.

Joe:   Our guest today, Alex, is John Fedro. John…

Alex:   Yeah.

Joe:   …Fedro. And John, you live in Texas, right?

John:   Correct.

Joe:   And guys, listen. We intentionally didn’t ask him a bunch of question before we started this podcast because we want it to be raw and live and we wanted you to hear what we’re hearing.

Alex:   Real.

Joe:   Yes. So, John, you live in Texas and I’m looking at your Skype picture here. You look like you’re still in high school.

John:   Thanks. I appreciate that. You know, I always didn’t like that growing up. But now, I still get carded.

Alex:   You appreciate it now.

John:   Even though I’m mid-30s, yeah. When I don’t get carded, I get a little bit, a little sad.

Joe:   Of course, I still like I’m in high… I still look like I’m in high school too.

John:   There’s some grays coming in. There’s a little bit of thinning hair, if you look close.

Joe:   Right. Right on. So you’re in your mid-30s and you’re doing this crazy thing with mobile homes. Talk about that.

John:   Oh my goodness. I could talk for five hours. I could talk for days.

Joe:   All right. Well, then. Let me, let me steer a little better then. What were you doing in high school? And when you got out in high school, what did you, what was your career path? What did you want to do?

John:   Oh, that’s a great question. I think I wanted to be a chef at one point and then a physical therapist, and then a plastic surgeon. My family was in the health field so I started with a pre-med, and then quickly after going through a few years of college decided that that was not for me. I couldn’t listen to people’s problems all day. I couldn’t handle the sight of blood so just went quickly, I bounced around. Well, I stopped school, decided that that wasn’t for me at the time. I worked just mundane job after job – cell phone, a parking lot attendant, Walmart. Super not happy.

I mean, I knew that there was so much more inside of me than working just for minimum wage. No matter what, no matter what kind of pay I was getting, I was just kind of working for someone else and I didn’t like that. So I always wanted to work for myself and the gentleman that I was roommates with at the time, still a good friend, had a real estate book. And this was an infomercial kind of guru at night book. I picked it up, read through it all in one weekend.

Alex:   Who was it?

John:   Who was it? It was… Who was it?

Joe:   Dean Graziosi?

John:   No, but just as much of a guru…

Joe:   Carleton Sheets.

John:   …Sheets! Thank you. Yes, how could I not remember that?

Alex:   Oh, it's Carleton Sheets?

John:   So, it was Carleton Sheets. And so, so I went through the course, went through it all in one weekend. Realized kind of later that those were kind of pie in the sky numbers, the ideal type of real estate deals but it got me hooked. I mean, this is something I could do. I didn’t know anything about real estate. But hey, this is the vehicle that could… I have all the requirements. I’m alive, I’m a go-getter, I don’t have a lot of money, I don’t have a degree, I have time. So, hey, this is for me. I’m a kid but know I can do this. So that was just the start of the real estate. There wasn’t anything mobile home related but that was what turned me on to this.

Joe:   Alex, God bless Carleton Sheets. We’ve talked about him before, haven’t we?

Alex:   Yeah! Yeah, absolutely. I mean, he’s one of the guys I bought first, one of the… I think I bought one of his courses on eBay actually.

Joe:   Is he still, is he still alive?

Alex:   I would imagine he’s still alive. I mean, he’s not really selling info anymore, I do not believe.

Joe:   What would it take to get him on our show?

Alex:   Oh, that would be interesting. Well, you know what’s interesting? I’ve got… Carleton Sheets was one of the guys that got me in and Russ Dalbey from Winning in the Cashflow Business. I bought his… I actually bought his course directly… Well, no. Did I? No, I think I bought that on eBay too.

Joe:   Well, okay.

Alex:   But Russ Dalbey had some issues but…

Joe:   John, we have…

Alex:   …Good information.

Joe:   John, we have interviewed so many people who got started with either Russ Whitney, what’s his name from Rich Dad? Robert Kiyosaki or Dean Graziosi. And I think it’s awesome actually. I mean, you know. Did you ever do any deals using Carleton Sheets' stuff?

John:   Absolutely not. And in no disrespect to Carleton Sheets. It was just a… No, no idea and that’s another… I can expound on that.

Joe:   Okay.

John:   And that actually helped me get into mobile homes but no. No, I definitely didn’t do any.

Joe:   Well, that’s a great segue then. Now, how old were you when you were starting to venture into this?

John:   That was 2002. So I was, I just turned… I was 19, I was just about to turn 20 because I remember it was spring break of…

Alex:   Wow!

John:   Yeah, right. I got my first property right after spring break of 2002. I was studying for the first part of the year and then… You go through that when you’re first kind of, quote unquote, studying real estate. How much do I need to know before I just full pull the trigger for the first time? And I’m going to study a little bit more and do a little bit more research and..

Joe:   Yeah.

John:   But then eventually, you got to pull the trigger so.

Joe:   Right.

Alex:   Yeah.

Joe:   Well then, talk about your journey after that point then. What happened?

John:   Sure.

Joe:   Next?

John:   Well, I had just a few thousand dollars of life savings which I was very proud of at that time. So a few thousand dollars of life savings, I wanted to… I was in Tampa at the time, Tampa, Florida, where… my goodness, you could buy a home and clean a window and resell it for a profit.

Joe:   Yeah.

John:   And I wanted to do single-family homes. I mean, that’s what I… Yeah, that was prestigious. That was real estate investing. That’s what I learned from Carleton Sheets, just in the little course, in the little books. So that’s what I wanted to do. I mailed letters. I knocked on doors. I had a marketing campaign and for one thing or another, nothing to do with Carleton Sheets again, I’m sure it was me looking back. I was a small fish in a really big pond but I didn’t get any deals. 90 days of really busting my butt. Looking back, I really was putting forth a lot of effort. I went through my life savings on marketing, made a number of offers and nothing stuck. Well, my first deal…

Alex:   These offers, deals where owner-finance type situations, right? I mean, there was a… It wasn’t really a big thing on wholesaling, unless I didn’t buy that part of the course but it was more like owner-finance kind of thing, right? Like you carry the paper. I remember his stating was, “You get cash at the closing!” And like getting agents to carry their commission or the note and all this kind of stuff.

John:   I… Well, I knew, I knew just enough to be dangerous.

Alex:   Yeah.

John:   I know a little bit about wholesaling. A tiny bit. But you’re right. The owner-financing was something that just blew my mind at the time. You mean, we can buy… And I didn’t even know what a deed was. Is this piece of paper? Is this like a magical, is this somewhere hidden…?

Alex:   Yeah.

John:   Way? I mean I knew so…

Alex:   I know what you mean.

John:   …Little so…

Alex:   I didn’t even know what a mortgage was.

John:   Yeah.

Alex:   So, I’m like going, yeah.

John:   It’s like where… Yeah, where does that go? Do I…? I have no idea. And all that can seem like such a big monster. Real estate is this big monster which very quickly I found out that it wasn’t. My first deal was a woman who called me. I finally got a call. And well, I was getting a few calls. But I finally got a call from a woman who is asking $8,000 for her beautiful three-bedroom. Well, three-bedroom with a den, could be four-bed… I turned it into a four-bedroom. Four-bedroom, two-bath on a lake. Oh, my god. I thought I… I mean this was divine.

Alex:      Wow.

John:   …Intervention. What was this lady’s problem that she would sell her home for $8,000? So I went there and is… when I was pulling into the park which I didn’t even… I was so green, I didn’t even ask, “Oh, this is a mobile home.” So, I pulled into the park and I’m like, “What is this?” I’ve never lived in a mobile home. I can’t remember any friends having mobile homes when I was growing up. So, really caught me off guard. I knew that there were mobile homes but, “Should I go to this appointment? Should I not?”

I look fifteen, pimples on my face. I’m driving a terrible car. I got this music blasting to try to get me pumped up. I am scared. I mean, I’m… Even right now, I got goose bumps telling the story. And right… I can see the home kind of… It’s zigzagging through the park and I can see it up here, it must be the one. It’s the only double wide on the street. So I know I’m going there and I just get this wave of emotion where I get sick to my stomach and I pull over and I just, I purge on the side of the road. And I remember…

Alex:   Wow!

John:   …Thinking I kind of put down my visor and look at myself in the mirror and just kind of wipe my mouth and just… Not only was I scared before but now my… I smell or my breath can’t smell very good. So it’s like, what do I do? Do I go home? Do I run between my… run home between my legs? And I ended up going to the appointment like I said I would. That woman, we ended up negotiating. I purchased her home not for $8,000. It needed just a tiny bit of work. I called a Rotaractor out there for like $300 or $400 bucks but I talked the seller into owner financing for $3,000, $300 down and $300 a month. And picked up this… And really set the bar high. I mean, people listening they might say, “Well that’s a really good deal.” But I really set the bar high. And if I didn’t do so well on those, on these first few deals, it’s so easy to overspend money or overpay on a mobile home but these first few deals really set me up well.

Joe:   John, what do you mean by setting the bar high?

John:   Oh, well. Very good question. This mobile home that I purchased, I should go into what I resold it for. I purchased it for the $3,000 on payments, $300 down, $300 a month for 9 more months. I actually discounted it after, I think, 4 months. I called the seller and told her I’d give her about $1,500.

Joe:   Wow.

John:   And she took it. But anyway, when I resold the home, I sold it three times total. The first time, and these are rough numbers because I’m not looking at them in front of me. The first time I sold it, I think it was $27,500 on payments, $27,500. I got $2,500 down. I remember it being around this time like tax time-ish. So I got about $2,500 down, $750 a month which included the lot rent. So it’s about $300 or $400 cash flow to me. After about 2 years, these people flaked out and they left, which was very common. The first few years, I had everyone leave. Nobody stayed around. And I’m selling these homes, mind you, at the time. You know I don’t want to rent them. I’m selling them, people can do their own repairs. So the first time I sold it for I think $27,500. The next time I sold it for in the low 30’s, and then the last time I sold it for the high $30s and those folks actually stayed. They just paid me off early last year… finally. So…

Joe:   Wow. Wow.

John:   …On that, on that first property. So what I meant by setting the bar high was I could’ve purchased it for $8,000 and obviously it would’ve been profitable. But it would’ve taken me over 2 years to get my money back had I bought it for $8,000. Then again, not a deal breaker but it just again set the bar high for me to see… And this seller, I wasn’t, I didn’t have a gun to her head. She was very happy to do this deal with me. And my back was kind of against the wall. I was young, I didn’t have much money, so I could do what I could do. But ultimately, that first deal was the first of many. It opened my eyes to this business. And my second deal was a mobile on land. My next five were mobile homes, the next five were mobile homes so…

Joe:   And you found probably, you didn’t even have much competition for this deals either, did you?

John:   That was it. I didn’t have a lot of competition. I realized quickly that financing kind of sucks, buyers are kind of flaky, and then there are not a lot of investors doing this. In fact, in my local real estate groups, I'm kind of fed that stigma that we don’t want to talk about this business, because I didn’t. I was embarrassed. I didn’t want to do mobiles. That’s not prestigious. I didn’t want to tell my friends that. But then I realized there’s a lot of money in this. I mean, there’s… And the money’s green and I’m helping people. So, relatively quickly, I would say maybe 5 to 6 months, which doesn’t sound that quick actually, I became very… I took on that personality. Mobile homes, I love them. Big ones, fat ones, skinny ones, ugly ones, I’m your guy. It’s under my leg. So…

Joe:   Wow. This is really fascinating to me because every time I’m pulling a list of owners to send mails to or I’m looking through Craigslist, I give my VA’s very clear instructions, avoid all mobile homes. Don’t send any mail to mobile homes. And if you see an ad on Craigslist that looks like a mobile home, just pass it. And here you are taking these deals. And so, is it still what you’re doing today? You’re buying most of them with owner financing?

John:   On land, absolutely. In the parks…

Joe:   What does that mean on land? If the mobile home is on land?

John:   Oh, great question. There are a few types of mobile homes. I supposed the mobile homes themselves are the same but mobile homes can be just in a park where you would rent the land. So as an investor, I would just buy the home because I can’t buy the land because the park rents out the land. So I’m just buying the home, $5,000, give or take, for the home, the walls, the roof, the appliances.

Joe:   Okay.

John:  I can also buy a home that’s attached to a private land. There’s a little piece of land that the home’s on, maybe a tenth of an acre. Or 5 or 10 acres and then there’s one mobile home popped in the middle. Or two or three mobile homes on that one piece of land. So that’s what I mean by it’s attached to land or it’s…

Joe:   So if it..

John:   …If it’s with land.

Joe:   If it’s attached with land, obviously, that’s going to be more expensive. And so you’re buying those with owner financing.

John:   Those with owner financing, a lot of times. In parks, with owner financing some of the times.

Joe:   Okay.

John:   Yes.

Joe:   So, when you pay cash, that’s when you’re renting the land underneath it?

John:   Or I can get a fantastic deal with a mobile home on land.

Joe:   Okay.

John:   Or I’m buying a home on somebody else’s land and then I’m going to move it from where it currently is over to a different location. That’s another option as well. Then I would pay cash for that home.

Joe:   How hard is it to rehab these mobile homes and fix them up?

John:   I am… I learned very quickly that my hand-eye coordination is awful. So I know repairs, I    can do repairs but I personally don’t do them.

Joe:   Yeah.

John:   A lot of the homes that I personally sell need some degree of cosmetic work. Possibly minor structural work but usually just cosmetic. And I would rather sell a home like that because it attaches the buyer, the tenant buyer who’s going to be typically making payments on this home. They’re doing a little bit of work to the home so they get attached to their property. They’re painting it, they’re putting in new carpet here and there, they’re doing cosmetic work. So they’re making it their own. So I like to sell homes needing a tiny bit of work but ultimately, if we get a home that needs a lot of work.

Water is the main enemy of a mobile home. So anywhere it’s can come in, it’s going to damage the home. The window sills, anywhere along the perimeter of the home, underneath the wet areas. So really, a big part of this business, besides maybe just updating a home, you know, putting in a little bit more modern appliances and changing the carpet to take out the shag rug and change all the old colors from the 1980’s. It’s pretty much fixing soft spots and floors, tarring the roof, resecuring the roof, making the home safe and secure. These homes we think of being mobile and there… When they were built in the ‘70s, they didn’t have much government oversight.

Joe:   Sure.

John:   And you could kind of build… It was the Wild West, so to speak. Nowadays, and even for the past 20, 30 years, manufactured homes, I’ve never had to make a claim with insurance, knock on wood. I have a lot of homes in tornado alley or the hurricane areas and again, no claim. These homes are really, really well-made and when you have good people inside of them, taking care of these homes, they last. So, fixing up homes doesn’t take long. It typically doesn’t take a lot of money. What you see is what you get. There’s an exterior of the mobile home. There are the joists or frame of the mobile home with the insulation and then there’s the paneling or the dry wall. So there are really just a few parts of these homes.

Joe:   Right, right. And there’s not a lot to fix. So basically, you come in to make it water-tight, right?

John:   Yes. I'm going to say that.

Joe:   You’ll patch the roofs, cock the windows, fix any soft floors. But then you will leave some of it like painting and flooring, maybe, to the new home owner.

John:   Correct. And that’s actually a… That’s something that a lot of our buyers… Now buyers that are going to pay cash, buyers that are going to get a bank loan, they’re different. If you’re going to sell something cash, you should fix that home up to the nines to make it comparable with everyone else.

Joe:   Okay.

John:   Or, with everyone else selling. You know, you got to sell a nice property. But if you sell with regards to… A lot of the ways we sell is payments. And if you sell with monthly payments, you’re going to find that your buyers are going to prefer to make those repairs. And the less money that you have to put out, let’s face it, every money that you… every dollar that you invest in a mobile home, you have to recoup that before you make a profit. So, a lot of our buyers would prefer to actually purchase that home to get in a little bit less and then do the work that they know they can do because they’re handy a lot of the times. And they can do that over the first week or two…

Joe:   Nice.

John:   …After moving in.

Joe:   Nice. And so you’re selling this with… You’re buying them with your cash or seller financing, what are your…? And then you’re selling them usually with owner financing or a lease purchase, right?

John:   With owner financing. Occasionally, rent if we can get away with it, legally, of course. And or selling for cash or bank financing. Some homes definitely do qualify for bank financing. Other areas of the country and during tax time, you can get a little bit more money cash, or there’s more chance of a selling of a home for cash. So if I can sell a property and double or triple my money with cash, I’m going to… I might do it. But typically, what you said is correct. Yeah, we would either owner finance or rent those homes out.

Joe:   So what’s your minimum criteria per deal when you sell it? I mean, how much cash would you need to have? How much equity do you need to have?

John:   Oh, good question. So, the sort of the, I’d say maybe a litmus test of with regards to when you sell it or what homes do I want to invest in. For everyone that I’m working with or help point in the right direction, whenever you resell a manufactured home, let’s say on payments, and if you can sell for cash, aim to double or triple your money pretty quickly. But if you’re selling on payments, we want to recoup all of our    money ideally on the first year. We’re typically selling around 5 to 7 years’ worth of payments to our… from our tenant buyer. And we want to try to recoup our invested capital as investors for the acquisition cost, the holding cost, any repairs. We want to get that all back in the first year. And then everything after that would just be cash flow and profit.

Joe:   Nice. That’s a really good rule of thumb. Real good rule of thumb. You get your money back, you start buying more deals. Now, are you doing this virtually, John, in other markets outside of your own?

John:   I am. However, I have people that are motivated and that I trust on the ground. If this, if I didn’t have people on the ground… And that’s a question that I get asked quite often just from newer folks. “Is this something that I can do virtually or remotely and without you being there physically?” We don’t have to spend a lot of time. For every seller maybe, we’re doing some things by phone, maybe in person, you have to be there three hours maybe, and that’s if you’re really talkative. There’s not a lot of time that we have to spend with the actual seller of the home but having someone there that can be your feet and your eyes and your ears, it’s definitely invaluable. So, the only time I’m doing it remotely is if I have people there that I like and trust and they’re invested in the deal.

Joe:   Now, are these guys that are fixing it up themselves like your handyman or are they other investors?

John:   These are the other investors. Handyman, it’s kind of interesting. And this is just my experience. I’m sure there are handymen listening that don’t do it the same way but with handyman… And I’ve tried to kind of partner with them. “Hey, do this work for free. I’ll put up the mobile home. We can split the profits. Maybe not fifty-fifty but we can split the profits.” And handymen just don’t see… Maybe it’s the just the whole kind of employee mentality but it’s almost like they don’t see the big picture. So, doing this with a handyman, I feel like you would have to pay them hourly to really incentivize them. They don’t see that bigger picture of “Look, I’m going to partner with you and I’m going to get money in the long run.”

Joe:   Yeah.

John:   So to speak. That’s just kind of my experience, FYI.

Joe:   Okay. Now when you’re selling these with owner financing to get around Dodd-Frank, you’re using licensed loan originators, right?

John:   Correct. On land, we always use licensed loan originators. Very, very black and white. In parks, occasionally, depending on the exit strategy or the… Not the exit strategy but depending on the deal, we use a loan originator in the park and a closing attorney. Otherwise, in the park, we use a combination of non-secured promissory notes and trusts when we can. So it’s a combination of all three. It’s on a case-by-case basis, I guess I’d say.

Joe:   Okay.

John:   Every deal is a little different.

Joe:   You did mention tenant buyers. Do you sometimes structure lease purchases with these two?

John:   On land, we can. In parks, a lot of parks won’t want you to lease, sublease, subrent, rent, sublet. Parks want you to sell day number one. So in parks, we don’t often lease the home because they won’t let us. Some parks will, around military bases. Renting is a little bit more common. The park will allow you to rent the home out as long as the person is approved. But normally, the parks want to see, “Okay, the person in the home, they’re the owner.”

Joe:   Okay.

John:   So.

Joe:   Yeah, that makes sense. They probably take better care of the home when they are.

John:   Absolutely.

Joe:   So, talk a little bit like, you’re doing this business now, what’s a typical month look like? If you don’t mind sharing some numbers.

John:   Sure.

Joe:   How many deals do you buy a month typically? What kind of cash flow are you getting on your inventory?

John:   Sure. So I started this, my own business, in the Florida market and then moved to Texas. Now helping folks around the country. I also have my first park in Kansas which I’m super, super stoked about. It’s a 110 lots and I’m slowly filling it up. It’s at about 50% occupancy right now so I’m filling that up. Last year, moved in approximately 8 homes, and then this year, I plan on moving in 10. So part of my business is kind of…

Joe:   In that park, you’re talking about?

John:   Right.

Joe:   Yeah.

John:   So, part of my business… Now, everything I built up in the Florida and Texas markets, I know other investors, I know park owners, I know park managers, I know the brokers and realtors and more importantly, they all know me. I have this track record of “John’s kind of the mobile home person,” like, “At least call him up and see what he’ll, see what kind of offers or what he thinks,” so I’ve built that up in Florida and Texas. So my business now is kind of morphing a little bit into park ownership and now trying to fill up my own park.

So, I am doing some things remotely. Like I said, while I’m in Austin, I’ll fill up, I’ll purchase a home in Kansas, I’ll have somebody there that can go look at it, I’ll have my mover move my home, I’ll have my handyman fix it up, I’ll have the unofficial realtor in the park sell it, and then my park manager does all the paperwork. That’s part of my business. The other part is the individual homes just on their own land or in parks around me in Austin or back in Tampa where I’m from.

Joe:   Yeah.

John:   I still get leads fairly regularly there. So, a lot of what I do is by phone. I do have to go to appointments obviously, on a semi-regular basis every week, a couple appointments here and there, calling our park managers and really keeping in touch with important people in this business. Other investors, the parks, advertising. As far as management goes, that’s why I love the park so much is because we have those park managers. Even with…

Joe:   Yeah, that’s interesting.

John:   …Mobiles on land, we are selling these homes. So now, I am renting some, but even while renting and I’d love to kind of hear what your thoughts on this, Joe, but I know the first few years while I was investing, I had a 100% turnover rate. Nobody was staying in my home. I would put people in and just awful people. In hindsight, they were just, they had no jobs, evictions, they were living, they were practically homeless at the time. Like, I put, bad choices of people, high-risk people into my homes. And nowadays, that’s the opposite. I’ve had two people had to leave last year. They called me well and advanced. And nowadays, I forget about who’s in my places and I actually like that, like they don’t cause me problems. The only people I can actually think of right now, at the top of my head, are the ones that always pay late and kind of give me problems but…

Joe:   So, you’re just much better at pre-screening them now. You’re more…

John:   Maybe that’s what it is. So, I mean, the management is non-existent. And yeah, I guess, I’m just better at pre-screening people.

Joe:   Now, how do you find your deals? What is…? Are you doing marketing regularly to find these kinds of homeowners that want to sell their mobile homes?

John:   Oh, my goodness, absolutely. Most of the deals that we purchase, never, they never go to Craigslist, they’re never online, on any sort of listing service that you would find them to. So turning over every rock. I mean, obviously, common sense thing. Driving through the park, talking to the managers, maybe putting out a bandit sign or two. Those work. The same things that work with single-family homes… Well, that’s not true. A lot of the same things that work for single-family homes work for mobile homes. And then some unorthodox things for mobile homes, they work as well. And we have mobiles on land, we have mobiles in parks, ones that have to be moved. So, there’s just, you have to know kind of where to find them and really turn over every rock. Let everyone know. Who it is and how you can help. Again, there are not a lot of us doing this.

Joe:   Are you doing direct mail?

John:   Direct mail to mobile homes attached to land, yes. Park managers typically would frown upon that. You can ask permission but you’ll almost always hear a no. “May I mail to people in your park? Send them a postcard or…” And you’ll typically usually hear a no. We can usually get away. The park managers will allow us to put sort of a flier on a bulletin board. Most parks have some sort of bulletin board or by the mailboxes.

Joe:   That’s interesting.

John:   You can put a flier.

Joe:   Why would they care?

John:   This is… I don’t have any facts on this but from my… Every time I’ve asked, just sort of read people’s facial expressions, it’s almost a… If they really like you, and they have more of an attachment to you than the park, then they would probably let you do it just to be friends with you. But otherwise, most park managers are… they’re logical, they care about their community, they want what’s best for their community and I think that comes across as just soliciting. So they hear it, they hear what you want to do, they think soliciting in their mind and they don’t, it’s not attack against you. It’s just, “No, we don’t. Please don’t do that.”

And then if you do it without asking them, it always gets back to the park manager. I’ve done it a number of times, and they’re not mean but they will call you up or, “Hey, John, is this you?” Or they’ll just call and say, “Hey, did you get permission to mail in here? Who said this?” They’re just watchdogs for the park. So, that’s just what I found. If you find something different, folks that are listening, by all means, direct mail would work. But there’s, I would say that there’s other ways, for sure, that we can get our message across to those same folks so…

Joe:   What would you tell somebody, John, who’s interested in learning more about this, who wants to maybe start doing it, investigating it themselves?

John:   Sure.

Joe:   How does someone get started?

John:   Sure. Well, mobile homes, they’re… I’m sure right now, as we’re filming this, there’s got to be somebody on the hood of their car signing their title over to somebody else in this country. So, mobile homes, the deals happen everyday. You can buy them, you can sell them, you can do a skinny deal all day long. And before I started helping people, and I can remember this. I was doing a hosting on this real estate club in Tampa. And people, they knew what I was doing mobile homes because I was soliciting. “Hey, if you know mobile homes or you have any deals, you get any leads, bring them to me.”

And I was hosting this meeting and people knew what I was doing but they didn’t ask me for help. They just went out and did it. And I realized then… And it didn’t work out for them, not one of the people. It’s so easy in this business to… And these are the four main kinds of umbrella areas where people not only do bad deals but they do a bad deal and then if you’ve ever talked to somebody on the mobile home business, they’re that jaded investor.

Joe:   Yeah.

John:   “Don’t do this! I have a friend who lost money” Or “This guy ran him around in circles.” So, the four areas that you can… A lot of people if they don’t have training will make these mistakes. They’ll overpay for a mobile home, so easy to overpay, overimprove the mobile home which… And when I say overpay and overimprove, you’re basically putting way more money into the home and it’s going to take you 2 or 3 years to get your money back. Or if you sell the home on cash, which you hope, which again there’s… In most areas, there are more sellers than there are cash buyers and everyone’s fighting over those same cash buyers.

So, overpaying for a mobile home, overimproving a mobile home, putting too much money into it, is going to suck because you’re not going to get your money back out as quickly as you need to. The third thing that you can do is… There are a lot of things you can do but the third sort of big umbrella mistake that people make is by putting the wrong people in their home. If you are going to collect payments, you have to know Dodd-Frank Safe Act, all the seller financing and truth and lending new laws. But putting the wrong person in there is a nightmare. I can’t believe I lasted for my first three years. I’m a glutton for punishment because of all the crap I’ve taken.

John:   In just following my heart and being just bulldozed, steamrolled over and over again. And I learned a lot. But putting the wrong people in your home will just give you such anxiety, so many headaches, you’re chasing people around for money. And it’s just that person. You could’ve gotten a good person in there and you wouldn’t have had any of these problems. So putting the wrong person in it. And then not charging enough when you sell, or leaving literally 2 or 3 payments on the table.

Joe:   Yeah.

John:   Thousands and thousands of dollars. So, just selling the home for too skinny. So to go back and loop back to your question about what should people do, educate yourself. Before you go out there and pull the trigger, and talk somebody down from $20,000 down to $10,000 in a park and think that you’re God’s gift to negotiations here, talking somebody down 50% doesn’t mean that the deal is good. Having a free mobile home doesn’t mean that the deal is good. So there’s a lot of moving parts to these deals, I would say, if I could, if that makes sense.

Joe:   Yeah. Oh, yeah.

John: So, yeah. Educate yourself would be… You can always pull the trigger later. There’ll always be a lot of these… These people will… There’ll always be mobile home sellers. And unfortunately, a lot of mobile home people, I won’t say a lot, many are paycheck to paycheck. So, these homes are going to pop up so don’t feel about, don’t feel like you’re missing out on a deal. So I really hope that that makes sense. I just don’t want anybody getting into a bad situation so educate yourself is…

Joe:   For sure, for sure.

John:   …What I would say.

Joe:   And I wish we could talk more about this. I have to end this podcast here. I know Alex got disconnected so I apologize. He’s not on anymore. But John, how can people get a hold of you, get more information about your properties and how you do this stuff?

John:   Sure. Oh, there’s a lot of great information over at MobileHomeInvesting.net.

Joe:   MobileHome…

John:   I've been putting…

Joe:   Okay.

John:   MobileHomeInvesting.net. I've been putting my stories there and ton of free content. And that’s how people can reach me and never feel… hesitate or never hesitate to reach out and ask questions.

Joe:   So you do some coaching and you actually partner with students on deals too, right?

John:   Oh, absolutely. I mean if they’re… The folks listening, if you’re that go-getter that is going to be in your area and you’re the one making a name for yourself and finding deals and closing these properties, I mean, obviously, I’m helping as much as I can but my goodness, for somebody that’s that motivated and dedicated. I know what I was like when I got started and then the zero help I received, so absolutely. I would be very fortunate to work with anyone that’s very motivated and really ready to build this type of business.

Joe:   Excellent, John. Well, this has been really informative, jam-packed with good information. I know there are people out there and I’m definitely interested in learning more about this strategy, because I turned away a lot of these kinds of deals and it would be helpful to know what to do with them. So again, guys, if you want to get more information about John, go to MobileHomeInvesting.net, MobileHomeInvesting.net. We’ll have a link to that in the show notes.

And guys, listen, if you’re listening to this and you haven’t been paying attention cause you’re driving and traffic is horrible, we actually will have a transcription of this podcast at RealEstateInvestingMastery.com. So, if you want more information, get a transcription of this. Go to RealEstateInvestingMastery.com. If you want more information on John, MobileHomeInvesting.net. All right. It’s been really good, John. I appreciate your time. Thank you so much for coming on the show.

John:   Thank you so much, Joe. Thanks, everyone.

Joe:   All right.