As real estate investors it can often times seem that the hardest part of investing is locating where our next deal will come from. In the early part of my investing career I struggled with how much energy and time to invest into each seller before I would give up on a deal..
Scenario 1: If you babysit a seller and focus all your energy into this one deal you could be in for a big disappointment when the seller decides he/she does not approve of your offer. You keep raising your purchase price as the seller keeps marketing the home for sale and waits for a higher offer. Now you are emotionally invested in this deal and would hate to see anyone but you close the home. Do you buy the deal or go back to the drawing board?
Scenario 2: You are a cold and calculating buying machine that makes only low cash offers that you know you can wholesale/resell for an easy profit. In this scenario you will not put your heart on the line but you will also close fewer deals because you are not willing to work with any sellers to renegotiate or find winning financing terms.
Mobile home investing is a numbers game with a twist. Here is how I run my investing business like a farmer.
Step 1: Know the minimum criteria for your next deal.
How much profit must you make in order to do the deal? How much cash can you tie up? How much cash-flow do you NEED monthly?
Step 2: Scatter your farm area with seeds. Every viable offer you make to purchase any seller’s home is a seed you have just planted inside the seller’s brain. If you seller turns your first offer down that is to be expected. The offer can be verbal but preferably make your offers written as well. A written offer is the closest thing many seller’s will have to their problems vanishing.
Farming Tip: If you plan to feed your family through the winter you had better plant more than 1 seed per week. Every “No” offer you make to a seller is immediately planted into their brains, with the help of time and added motivation these seeds can likely grow into a fruitful deal.
Step 3: Water your deals.
Encourage the sellers to suggest ways
to make your offer(s) better. Allow the suggestions to be heard and re-craft a new purchase offer or set of offers for the sellers.
Discover the seller’s true motivation for not selling to you the first time. Is it price? Is it terms? Is it something minuscule that you had previously over looked? Based on this new information make the sellers a new offer(s).
Step 4: Be Patient. Be willing to walk away. More importantly leave with the sellers knowing that if anything changes or they have a counteroffer to call you back immediately. Follow up with the sellers every few days or weeks depending on the particular deal and market competition.
Step 5: Only harvest deals that you want to eat. If and when these sellers cannot sell their homes they will likely be calling you back to sell. Ultimately you make the decisions here. Only close the deals that make the most sense to you, your wallet, and your time schedule.
Keep in mind that real estate planting and harvesting season is a 365 days a year activity. Everyday you should constantly be planting new seeds. Harvesting happens on a seed by seed basis.
If you plant them, deals will come.