Over a decade ago, I made the decision to become a full-time real estate investor by reading the book Rich Dad, Poor Dad by Robert Kiyosaki. Inspired by the material, I learned the importance of passive income to achieve financial independence. Upon finishing the book, I decided real estate would be my path to get there. My plan was to build enough cash to eventually buy and hold properties for cash flow. Little did I know what lay ahead — the road was bumpy and I was not prepared for what came next.
Rachel Hernandez is the author of the book, Adventures in Mobile Homes: How I Got Started in Mobile Home Investing and How You Can Too!. Rachel, also known as Mobile Home Gurl, writes and produces videos regularly about her stories and adventures in mobile home investing. You can visit her Website, check out her Book, follow her on Twitter or find her on Facebook.
Let me know if you would like to guest post on RFI!
The Early Years
In the beginning, I found deals for other investors. Being that I had a background as a business-to-business sales executive for a Fortune 500 company, finding opportunities and negotiating contracts came naturally. During one of my earliest deals, I made a whole year’s salary. It was amazing! I continued to build up cash until I eventually started to buy and hold single-family homes for cash flow.
Life as a landlord.
Upon building up my cash reserves, I was able to acquire a small portfolio of rental properties. Though, I have to be honest – life as a landlord was not the rosy picture I imagined. What I thought would be a walk in the park turned out to be a nightmare. I became overwhelmed by the sheer administrative side of the real estate business. There was always something to be fixed; I would always receive phone calls sometimes even late at night. At one point, I went ahead and hired property managers. Though, I still had to manage the managers. Life was miserable.
An eviction leads me to the tipping point.
Years later, I was a burned-out landlord constantly dealing with the hassles of landlording. I was going through an eviction which took eight months and involved going through the court system. I even brought in a property management company to help with the eviction case. On the day of the eviction, my property manager called me telling me my renters wanted to make payment arrangements for the past due rent. I told him no arrangements, I just wanted to get this over and done with. So the eviction continued. Once the eviction was over, I made the decision that I was through with landlording and decided to cash out on my entire real estate portfolio.
The course that changed my life.
As I contemplated my future, my attention turned towards my bookshelf. There were countless real estate books and courses on every subject you can think of. Though, one course stood out to me — a little green one. I picked it up and dusted it. It was a course (now a book) on mobile home investing, “Deals on Wheels,” by Lonnie Scruggs. I began to read it. This course sat on my shelf for five years before I did anything with it.
With experience, my perspective changed.
After I read the course, I knew now what I had to do. Life was not only about making money; it was about being free from money. Sure, I had read this before in Kiyosaki’s book. Though, it was only through experience that I could see now what I did not see before. At this point, I made the decision to learn the ins and outs of mobile home investing to achieve a life where I could do the things I want to do, not have to do. And, the rest is history.
Life as a mobile home investor.
At first, things were hectic. I made many mistakes. Though, I learned along the way. With each deal and property I acquired came a stream of cash flow that lasted for years. No longer was I tied to the restraints of money. I bought every home entirely with cash owning them all free and clear so I did not have a mortgage looming over my head. Giving prospective residents an opportunity to call a place their own is much more fulfilling. Choosing residents for the homes was a learning experience. I made some bad decisions but some good ones as well. I learned what I had to do to free up my most valuable asset: my time.
Nowadays, life is much slower. I have the time to do the things I want to do, not have to do. I can breathe and take the time to enjoy life. I like what I do. Through mobile home investing, I have found a sense of community with the residents and neighborhoods I work in. Business is done the old-fashioned way with a smile and a firm handshake. Since I work with people with a homeowner mentality, no longer do I get disturbed on a regular basis. Sure, I get calls every once in a while to put out a fire or two. But, it’s rare.
Sometimes life can throw you a curve ball. One day you think your life is going one way when all of a sudden you’re going in another. Clearly, this was not my chosen path. But, it was the one that worked for me.
Amazing posts…, I can learn from your experience because it inspires me.
Great to hear, thanks for reading! 🙂
Very interesting story! It’s the beauty of life, the surprises that come with the paths we choose. I’m glad that you found a path that works for you and makes you happy as well. Thanks for sharing.
I’m happy to share Mr. Enchumbao! Life can sure be unpredictable at times. Though, I guess it’s the journey that makes it fun and interesting. Thanks for reading! 🙂
That’s pretty cool, I can say that. I’ve wanted to get into real estate, but never thought about mobile home investing. Glad you got through the hiccups of a new market, but it seems you’re doing it now!
Thanks Grayson, I appreciate your kind words! Mobile home investing was definitely not at the top of my list when I first started out. I guess you can say it kind of found me instead of the other way around. Thanks for reading! 🙂
I have recently been looking into getting into mobile home investing. I like it because there are deals out there that are cheap enough that I could pay cash for them.
What would you see are the 3 most important things to consider when buying a investment mobile home?
And do you typically buy them and rent them out? Or do you provide seller financing?
Cheers!
GYFG
Sorry meant to subscribe to the comments so I can see when you repy.
Great to hear Gen Y Finance Guy!
Regarding your question, the three most important things I consider when buying an investment mobile home are the neighborhood, condition of the home (via the seller) and the demand for the type of home you’re buying (i.e. square footage, number of bedrooms and bathrooms, etc.).
If the seller has maintained the home and can prove to be trustworthy, most times I do not have any issues with the home down the road. When buying investment homes, most people look at the home itself. Though, you can tell a lot just by talking with the seller.
Regarding the types of people I work with, it’s usually those with a homeowner mentality. People who are looking to eventually own a home are more likely to take care of it and fix the issues when they come up.
Hope that helps. Thanks for stopping by! 🙂
Describe your ideal tenant!
Sure thing, Will!
Most times, I work with people who are local to the area. Usually, they live very close to the homes I place on the market. The residents I work with already know the neighborhood and have decided to live there. So, they are already familiar with the area (i.e. shopping, gas stations, grocery store, school districts, etc.).
In general, I do not work with out-of-towners or people who live out of the area. Usually, these folks tend to just be looking and have not researched the area completely.
Regarding tenant selection, I’ve learned the prior landlord can paint a much clearer picture of prospective residents than the current one. So far, it has worked and has helped when it comes to making decisions.
Hope that helps. Thanks for reading! 🙂
Thanks for taking the time to write that much!
I love reading about how people around the world find financial freedom. Unfortunately mobile home investing isn’t something I could emulate in New Zealand where I live as we don’t really have mobile home parks. But looking at your site and some of the returns you are getting is really interesting – $450/mth on a 15k purchase – thats a 36% gross return! I too am a real estate investor and anything over 10% gets me excited so I can see why you love what you do!
Can I ask what kind of ground rent the park would charge you?
Happy to hear you enjoyed the article Emma!
I completely understand your predicament regarding a lack of mobile home parks in your area. There are some other areas of the world that also face the same problem.
Regarding your question, since I work more in higher-end parks the ground rent can be upwards of $500+. Though, I make it part of the resident’s responsibility to take care of this payment as part of the agreement. If any of my residents fall behind, I take care of the lot rent owed and the park evicts them. In most of the higher-end communities, they attract a different clientele versus lower-end ones.
Hope that helps. Thanks for reading! 🙂
Your story is really inspiring. I’ve been getting really interested in modular homes as well as mobile homes lately, so this was a great read for me.
Great to hear Anum, thanks for stopping by! 🙂
Congrats Pauline. It seems like that the Rich Dad, Poor Dad by Robert Kiyosaki made a great impact on you.
Very inspiring story. Glad the course changed your life.
That’s interesting that mobile home renters have more of an owners mentality. I can see how that would lead to less direct intervention from a landlord. Still, it’s important to have the necessary capital in any field (mobile home supplies in this case).
It’s really cool that you found a sense of community within the mobile home residents and neighborhoods. I can imagine that owning and maintaining any kind of home would be stressful though. Is maintaining a mobile home much different from a house?
I like how you mentioned that your financial instability slowed down because of mobile homes. My wife and I plan to have an upstart real estate company. We will need to look for Mobile Home Park lots for Rent to start.