I\u2019ve written two articles on the power, the profitability, and the downside risk protection of mobile home park investing, as well. First, I wrote on several painful lessons<\/a> I learned in my early attempts at investing in mobile homes.<\/p>\n Then I wrote about eight powerful reasons<\/a> I love investing in mobile home parks. And this article resulted in one of the most substantial outpourings of messages I\u2019ve ever received on BiggerPockets.<\/p>\n The most common responses surrounded one question: \u201cHow do I get started?\u201d<\/p>\n You asked for it, so here goes.<\/p>\n I\u2019m speaking to a large audience. Many of you are in different places. So rather than giving you steps to follow, I think it would be more valuable for me to give you seven different paths you can take to achieve success in this profitable investing arena. You can skim the following and land on your areas of greatest interest.<\/p>\n \u201cDon\u2019t despise the day of small beginnings.\u201d If you\u2019re just starting out, a viable path may be to start out small and climb the ladder of success. Starting with a small park has many advantages including:<\/p>\n I\u2019ve often told the story of the Dallas guy who spent his $1,000 bonus on a bank-owned duplex. He fixed it up, rented it out, and resold it for a profit. He moved up to a fourplex. Then, eight, 12, etc. When I met him 22 years into his run, he was selling his 132-unit multifamily asset for north of $11 million in 2016.<\/p>\n This is a doable but long and challenging path to the top. It is probably the easiest and lowest-risk place to start, and I think it will work for many BiggerPockets readers.<\/p>\n This path involves bringing a deal to an operator and staying on for the ride. It is a chance to get a piece of the acquisition fees, ongoing profits, and appreciation. Perhaps equally as important, you can learn the business from an experienced operator along the way.<\/p>\n This path may work for you if…<\/p>\n You could also choose the related path of wholesaling mobile home parks, but that won\u2019t necessarily teach you the business as much as being a deal-finder who stays in for the long haul.<\/p>\n How much should you make? I have heard numbers like 5-10% of the syndicator\/operator\u2019s ownership share. That could equate to about 1.5- 5% or so of the total ownership in a deal, similar to a real estate commission.<\/p>\n This means raising (equity) capital for an MHP deal. This is one of the most important roles in any business, and if you can do this, you will be valuable for the rest of your career.<\/p>\n That is, if you don\u2019t go to jail along the way.<\/p>\n Let me explain. The SEC is watching. You cannot get paid to raise capital for others\u2019 deals. Your choices are to either…<\/p>\n Please do yourself a favor and don\u2019t work with any \u201cwink-wink\u201d operators who will give you an ownership stake after the fact based on how much you raise. The SEC will see through this arrangement in about 18 seconds.<\/p>\n Violation of their rules could mean a lot of money being paid back to investors, a permanent ban on you raising capital again, and, as I said, there are even some who\u2019ve gone to prison.<\/p>\n Related:<\/strong> How to Evaluate Mobile Home Park Investments for Profitability<\/a><\/em><\/p>\n Did you make a boatload of cash in bitcoin? Win the lottery? Sell your tech company? Get a large inheritance? Make a fortune in semi-boneless ham? Then this may be the path for you. I\u2019m talking about going big on day one.<\/p>\n This is different from the first path because that path starts small. This path will require a team. You may need to hire talent. You will need to read a lot, attend seminars, and prepare yourself well.<\/p>\n You may feel differently, but I don\u2019t think you should take this path unless you can give it your all. For most people, I don\u2019t think large-scale commercial real estate investments should be done in your spare time (unless you take path 7).<\/p>\n Footnote: If you have a high net worth, there is a similar path you can successfully do passively\u2014but not casually. You can sign on the debt for syndicators who are competent operators but don\u2019t have the net worth and liquidity to sign themselves.<\/p>\n This is fraught with risk, and you shouldn\u2019t go down this road lightly. And you should be well compensated, with monitoring and many controls in place.<\/p>\n Yeah, I know. Most of you are here \u2018cause you want to escape the 9-5. But I\u2019m not talking about being attached to a desk and working for the man. I am<\/em> talking about a job that gets you the education and on-the-job training to launch your career. This can also help you connect with the contacts you\u2019ll need to succeed as an MHP entrepreneur.<\/p>\n So, what are some of the jobs you might want to consider in this arena?<\/p>\n A similar path would be to get a college degree in real estate. There are a lot of degrees available these days, and I sure wish I could have gotten a degree in this arena. The world\u2019s greatest real estate broker, Gary Keller, started out with a degree in real estate, and if you plan to go to school, this may be a great option.<\/p>\n America has long moved away from the mentor\/apprentice model. But this could still be a great experience for many of you. The goal would be to find a syndicator\/operator (or property manager) whom you could learn under.<\/p>\n Hopefully, you would have a skill that you could offer them. Perhaps you\u2019re good at Excel. Maybe you\u2019re a whiz with financial analysis, or SEO, or digital marketing, etc. You would offer the operator your services free of charge, and in return, the operator would allow you to hang around their office, attend their meetings and conference calls, and teach you the business.<\/p>\n It seems that the best situation here would be for the operator to be local. And I imagine most who do this would do so part-time, in the evening or on weekends.<\/p>\n Make yourself invaluable. Do a better job than the current staff. If you do a fabulous job for the operator, I\u2019m guessing they won\u2019t feel right about keeping you on free forever.<\/p>\n I interviewed a lady for my new BiggerPockets book on self-storage who took this path in 2009. After a short time working for free for a top San Francisco property manager, they offered her $1,000 per month. Then, several thousand. And eventually a base of $5,000 plus much more in commissions. She is now the top commercial leasing agent in San Francisco just a decade later.<\/p>\n The paid coaching path has become prolific in multifamily and other asset types, but it hasn’t as much in the mobile home park business yet. Hiring a paid coach can include a big event (like a three-day conference) often followed by regular coaching calls or webinars.<\/p>\n I had a great coach in multifamily, and I learned a lot there. I would never trade the $25,000 I spent for anything.<\/p>\n Note that this path can often include other paths in this post. For example, members of a paid coaching program often become deal-finders for other members of the group or the coach themselves. A coaching group often spins off partnerships among members, as well.<\/p>\nPath 1: Climb the Ladder<\/h2>\n
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Path 2: Become a Deal-Finder<\/h2>\n
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Path 3: Become a Capital-Raiser<\/h2>\n
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Path 4: Jump Into the Big Leagues<\/h2>\n
Path 5: Get a Job<\/h2>\n
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Path 6: Hire a Mentor<\/h2>\n
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