Why Doesn’t the Successful Investor’s Advice Work For Me?
I discovered through trial-and-error that what an accomplished investor writes in a book may not necessarily work in your market.
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Let me explain.
I bought Tony Collela’s Investing in Mobile Homes with Land book a couple years ago and have since read it multiple times. It’s a quick and informative read that outlines his rental business of mobile homes with land. He gives a detailed account of the common repairs he makes to his homes, including using window units instead of central A/C whenever possible to cut costs.
Here’s the Situation:
We had just purchased our first land-home deal and were making the repairs to the home to get it rent-ready. The outdoor central A/C unit had been stolen before we purchased the property (common in our area when buying REOs) so I thought we could put several window units in the home to save us some money after we find a tenant-buyer (to prevent these from being stolen as well).
I didn’t know my buyers’ expectations upfront and was trying to learn them on the fly with this first deal. I knew going into this first deal that mobile home residents tended to have lower expectations for their housing; however, I wasn’t sure exactly what they were.
After a few showings, nobody was interested in buying a home that did not have central A/C. Here’s a couple reasons why:
- Investing in South Carolina allows you to avoid nearly all of the cold-weather issues that other landlords around the country must deal with; however, you must provide a working air conditioner as we have many Summer days over 100 F and humid.
- Tony didn’t have this same need for air conditioning in his market because he was investing in the mountains where he probably saw highs of 80 F in the summer.
- Putting several window units in that home would never have cooled this home in my opinion. At 24 ft by 76 ft (over 1800 sq ft), the home is both large and long.
We decided to put in the outdoor central A/C unit (after we closed with our tenant-buyer to prevent theft.) We received estimates for several thousand dollars from a couple of companies before going with a used A/C for about half the cost from the third company.
(The used seller gets his used outdoor units by putting in a new unit at a customer’s residence and repairing the older one. He then resells these used units with a 1 year warranty. This has been a great ongoing relationship that has saved us quite a bit of money.)
We spent more money than we had planned on air conditioning, but it didn’t ruin the deal.
Here’s what we should have done instead (and would recommend to those starting out)
- Books can be great in providing general knowledge but what works for the author in his market may not work for you. In fact, his strategies may be outdated or may be location-specific. Anyway, you should probably take the author’s info as general knowledge and not necessarily as fact without further exploration.
- I should have spent more time interacting both online and offline with investors in my area and in my niche. Asking questions of experienced investors would have saved us the headaches that accompany so many new investors.
Photo Credit: mendhak