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Getting Started In Any New Real Estate Business

by John Fedro on December 21, 2013 · 12 comments

  
Getting Started Real Estate Investing

There is typically a learning curve and/or stretching outside your comfort-zone with regards to beginning to invest in a new real estate niche.

This week I would like to discuss something known as Transitional Vulnerability. Knowing what to expect and not expect during this stage of starting any new business will help ensure you can be prepared and not caught off guard.

Transitional Vulnerability is one stage of learning a new business or skill-set when you are the most vulnerable to immediate failure and becoming discouraged. Transitional vulnerability can last weeks, months or a lifetime on your own.

Some examples of Transitional Vulnerability:

  • When a butterfly first hatches from its cocoon it is in a state of transitional vulnerability.
  • When a child is being born, both mother and child are in states of transitional vulnerability.
  • As a baby bird learns to fly it is in a state of transitional vulnerability.
  • When you start a new job you are in a state of transitional vulnerability.
  • As you begin a new hobby or sport you are in a state of transitional vulnerability.

Investing in real estate is no different.

However if you fail with investing you are out literally many thousands of dollars over your lifetime assuming you never returned to investing.

When you choose to begin a side business of investing in real estate and/or investing in mobile homes for profit you are in a state of Transitional Vulnerability for at least your first few deals. This is based solely on my own experience of helping others in this field.

Make sure to understand that you will be faced with many common and unique challenges to overcome. These challenges will encourage you to stumble, become delayed, be afraid, second-guess yourself, hesitate, and eventually succeed or fail. Many of these challenges, both internal and external challenges can be overcome with correct education, training, leadership, support team, and daily accountability.

Building a profitable portfolio is hard but you can do it. If anyone on this planet is where you wish to be there is no reason why you cannot duplicate his or her success.

How to Overcome Transitional Vulnerability?

  • Be prepared before you ever take action in public.
  • Join BiggerPockets.com and consider becoming a Pro member for added networking.
  • Post your questions and deals in the BiggerPockets Forums for added help and guidance.
  • Take local investors out to lunch and ask them questions.
  • When you have a potential “deal” ask to partner with a local seasoned investor in your area.

Logically speaking there are only so many steps (A, B, C, D… Z) that you should take to successfully build a profitable real estate and/or mobile home investing portfolio. Much like a pulling off a Band-aid you learning this business is going to happen one way or another. You can either learn this business overtime and improve slowly which is popularly called “Trial and Error” or you can choose to advance your knowledge with the help from seasoned investors that can be found here at Biggerpockets.com and/or working with a local seasoned investor/mentor. If you do work with a local seasoned investor make sure this person is someone others vouch for and that you like, trust, and can rely upon.

Lack of clarity is what eventually hurts most amateur real estate investors and mobile home investors from moving forward as quickly as they could with proper support.

Lack of clarity for:

  • Where to advertise and market to save money and get results?
  • How to speak to sellers when screening?
  • How to construct offers?
  • An outline of every step of the process?
  • How to answer seller/buyer questions to keep the deal moving forward?
  • What offers to suggest when buying and selling?
  • How to sell, what paperwork to use, and properly screening for buyers or renters?
  • The best ways to manage properties for receiving on-time payments from your tenants or buyers.

If you ever have any specific mobile home investing questions or general real estate investing questions do not hesitate to ask or comment below.

Love what you do daily,
John Fedro

Photo: Mark Zimmermann

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{ 12 comments… read them below or add one }

Bryan December 21, 2013 at 3:51 pm

Nice post John. All new businesses, or any activity for that matter, makes us vulnerable. There is a strength in that vulnerability however, because it causes us to learn and grow…..and hopefully profit. I have learned to be dedicated and consistent to new ventures, whenever I expand into new asset classes or investments. That has served well…..at least AFTER I made all the rookie mistakes :o)
-Bryan

Reply

John Fedro December 23, 2013 at 4:09 pm

Hi Bryan,

Exactly! We have all made rookie mistakes in our life. Without these mistakes life would not be worth living, in my mind anyway. However with regards to REI these mistakes can be super costly in real world cash-money and long-term headaches. Great feedback. Thanks for commenting.

Best,
John Fedro

Reply

Gerald Harris December 21, 2013 at 4:09 pm

Becoming a Real Estate Investor and moving from being a real estate agent is a form of Transitional Vulnerability. There is a huge mindset change that needed to happen in order for me to truly embrace and understand that they come in the form of a different mindset. Moving from Long Beach California to Charlotte North Carolina has been a huge change in understand the different markets and their prices. The thing I did not do was join a help group like this. BP has aided in my understand if deals how the man ways in which to create win/win situations from them. Great Article!

Reply

John Fedro December 23, 2013 at 4:05 pm

Agreed! I love BiggerPockets too.

You made a great point about changing your mindset as you grow. I have had the pleasure of helping many new investors learn the mobile home investing business and each investor becomes a very different person from the time they get started to when they are successful investors with a portfolio of properties. I say that is a completely great way.

Thanks for commenting.

Best,
John Fedro

Reply

Eric December 21, 2013 at 11:14 pm

Kelsey Property Management

We just started and bought higher end properties in the Grosse Pointe area of Michigan. There is a demand for properties here but I have experienced some growing pains. However longterm I think the houses will be good investments and would like to had more. However worse comes too worse I don’t like it and things don’t go well the market is going up here and I you can always sell nice properties that you got for a good price.

Reply

John Fedro December 23, 2013 at 4:02 pm

Well said Eric.

Congratulations on pulling the trigger and being so active in your investments. Keep up the dedication and moving forward. All the best to you.

Talk soon,
John Fedro

Reply

Roy Schauer December 22, 2013 at 11:42 am

Good points. Some people don’t like to confront the new, the unknown and live their safe lives. There is nothing wrong with that. And then their are the pioneers, the think and do people who go outside the traditional thinking. They don’t always accomplish what they attempt but even in not succeeding they learn from the experience and most importantly they learn about themselves. How do you ever know what your truly capable of until you test your limits?

Reply

John Fedro December 23, 2013 at 4:00 pm

Hi Roy,

Your last sentence is such a great quote. I have on my wall, “Push yourself past the possible into the impossible.” Thanks for your kind words and for commenting. Let me know if there is anything else you need help with regarding mobile home investing.

Best,
John Fedro

Reply

Lisa Phillips December 22, 2013 at 9:40 pm

Thanks for the article. Fear is the biggest impediment for many, so thank you for writing this article.

Reply

John Fedro December 23, 2013 at 3:58 pm

Hi Lisa,

Thanks for the kind words and for stopping by. Let me know if there is anything else you need help with regarding mobile homes.

Best,
John Fedro

Reply

Chervon Jones December 26, 2013 at 9:20 am

I have this mobile home that I am still wondering if it is a good deal. Due to the fact that it is not in a park and the land is included. But 70k is the price for home and land. How do I go about finding the price of the land? Also, should I get a separate appraisal for the MH? I used NADA.com and it gave me the round about amount of 30k. Even though I know the home is in very good condition.

Reply

John Fedro December 27, 2013 at 10:39 am

Hi Chervon,

Thanks for reaching out to me on this. Congratulations on the prospective opportunity on your hands. This no doubt came from being active in your area.

Here are my thoughts. How you purchase this property and for what price/terms will depend on your desired exit strategy. I have paid over retail value for a mobile home on land if the terms were right. Finding the price of the land can be as easy as looking at comparables nearby or online at your local property appraiser’s site is a good start. If you email me I will look over the deal and give you some specific action.

Talk soon,
John Fedro

Reply

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