Episode 49 & 50 - The Finale Part 1

I’m posting this super late but I believe it’s better this way. If I don’t post now, I will be lumping all four episodes from 49 - 52 all in one last post. In these last two posts, I’m going to attempt to offer some insights and tidbits. Hopefully, it will a bit more substantial than my usual reports and snapshots.

For this first part, I’m going to go over the mistakes I have made and continue making. I’m also going to cover some takeaways and possible tips. Part two will cover my thoughts and general concepts that I’ve been exposed to during this last year. Of course, the latest update on Project Rocky will be included.

Mistakes & Takeaways

So I quickly looked over my previous blogs and boy were the early posts so funny. So much timidity and curiosity whenever I started this adventure. It all seemed so long ago and so surreal. I was excited for anything, even just networking and finding out basic stuff. I was excited to speak to sellers, that’s so crazy.  Alright enough nostalgia, on to the mistakes:

(Of course, these are not ALL the mistakes I’ve made. It’s just the ones that hurt the most)

Over-Paying

I simply over-paid on both of my projects. For project 192, I should have paid a lot less considering the conditions of the trailer. It has water damage from the roof leaking. The water heater and the floor it was sitting on needed replacement. The home had an older heating system that most likely doesn’t work. I should have spent under 1000 for the home. Instead, I paid 2000 for it. Although, I didn’t put much in repairs, it still needed some. In total I spend about 4K fixing up the place.

Regarding Project Rocky, I should have simply just walk away. Considering the cost of purchasing, moving and rehabbing, it was better if I just never bought it. I’m already at about 4K in holding and repairs, and we still have carpet, paint, electricity and plumbing hookup left to be done. If the project had started with the trailer already in a park, it might have been worth it.

This is by far the biggest lesson. Over-paying is such a simple concept yet I’m not sure how one could learn all this without doing. The amount of phone calls, books read and forum posts it would take just for me to internalize everything I’ve learned over the past year would never have been enough. I really think that while I over-paid for these deals, the lessons I learned are have tremendous sticking power simply because they hurt more.

Underestimating Repairs

Another typical mistake a new investor usually make is underestimating repairs. Honestly, I don’t really think there was another way to learn other than doing. The only difference here that other investors don’t usually do is that I started two projects instead of just one.

While I know I was paying for some of these lessons by acting rashly, I wasn’t prepared to learn them so fast and so soon. If it was just one project at a time, I think I would have been in a lot better shape than I am now.

Besides general repair costs, something else I didn’t know was that moving a mobile home isn’t cheap or quick. This is by far the most surprising thing I learned this past year. It was a pain to deal with and while I will most likely move more trailers in the future, it won’t be anytime soon. Also, don’t pay for services up front, which only transpired once in my transactions but still hurt like none-other. A simple lesson yet so easily to dismiss as something obvious.

Moving Parts

Something that continually to resurface, is “you don’t know what you don’t know” phenomenon. A lot of this journey so far for me is learning about things I have no clue about. Something I would change if I could do it again, is to start out walking instead of running. I could have paced myself a lot better and kept more cash in reserves.

When you boil it all down, all I really do is make phone calls, post craigslist ads and pay people to fix things. It sounds all so easy and yet all the unaccounted moving parts in between those activities is what makes real estate investing so challenging and rewarding.  More of a takeaway than a mistake, the point here is to just be prepared to do massive amount of learning and discovering.

Tips

While I don’t have much experience and frankly not many tips to offer, I just want to go over some things I wished I could have done differently..

• Build relationships with Park Owners and Managers

This is something I started doing but lose track of early on. After project Rocky is completed, I will be dedicating some time to find and work with park owners and managers before picking up new projects. This is quite important as you want to work with Park owners that like having you around and find you valuable.

• Don’t Move

You can move a trailer if you must, but to save on costs when starting out, ideally you should just find trailers to rehab that are already located inside parks. Or you can negotiate with park owners to give you discount on lot rent while you’re operating in the park.

• Appliances

This is so obvious and yet I always forget to ask. Try and ask the seller to leave them for you. Even when you have to pay a few bucks extra, as new appliances cost a bunch of money. While it doesn’t seem like it’s a big deal, when I look over my numbers, appliances cost me more than some of the repairs I had done.  

Well, that’s all I have for now folks. Nothing really earth shattering or profound. I really do hope it’s better than my normal posts and hopefully somewhat valuable. At least, maybe even entertaining. I have a small feeling that entertainment is mainly why some of my readers come back and keep up with my silly postings.

Expect part 2 to be posted at the end of March. The original timeline was for March 20th, but honestly that’s quite unrealistic as my schedule now is just too insane. Thank you so much for reading my silly blogs and I will see you soon.