Editor’s Note: Welcome to the companion article to Episode 14 of the MHP_IRL podcast! The purpose of this article is to expand your podcast listening experience with additional content. Companion articles will unpack larger concepts that we talk about during each episode that will give you practical and most importantly, actionable advice that you can apply to your MHP investing journey.

You never know where someone is going to come from in the MHP investing world...

One investor could have come into the game with their own money. Another could have come having already been working in the industry elsewhere. And another could have come from “nothing.”

In 2015, when Ian and I started Archimedes Group, I was broke, inexperienced, and stuck in a career without a way out. I had more student loan debt than capital to invest in deals.

The most important thing that I brought to the table in 2015 was the knowledge of who I was and what I wanted. But, this did not come to me suddenly. In fact, it took working several different types of jobs that helped me hone my skills, reading a ton of books that opened my mind, and networking with a lot of people that brought in my perspective.

Doing all of this made lifting off so much easier.

You may not realize how much you are growing because success is not linear. There are a lot of demoralizing plateaus you must burst through. Although you may feel stuck in neutral, going nowhere fast, you may also be developing crucial skills that help you big time when you buy your first property.

Even if you aren’t starting from zero, achieving your goal is going to take time, sacrifice, and jumping over a lot of knowledge and skill gaps.

Skill gaps are a hell of a hurdle to get over since they require you to expose weaknesses in your own self-esteem.

I’ve talked about this before, but I was pleasantly surprised to find that the skills I learned in my “other” life (the one before MHP investing) actually proved to be invaluable for my MHP investing journey.

What kind of skills am I talking about?

Marketing
Sales
Negotiation
Basic accounting
Financial analysis
Ability to collect back due rent
Emotional intelligence
Employee, contractor, and property management
Spanish speaking
Tenant screenings
Efficient time allocation

For each of those skills you do not have, expect to pay for that gap in one way or another. This could be in the form of hiring someone, the opportunity cost of missed revenue, or even spending the time to learn the skill yourself.

And remember, even if you can hire an occupied lot or property manager, you can not expect him or her to be proficient at all of those skills.

Please do not fall for the “brush-off trap.” The brush-off trap is when you tell yourself that you don’t need one of these skills.

How do I know this? Well because when Ian and I first started...even with four years of selling cars under my belt, Ian ran circles around me in sales, which he had no experience in. The reason is, he figured out the nuances before I did. I was too focused on executing the same techniques that made me successful at selling cars to see that they didn’t apply to MHPs.

So, without further ado, I’d love to share my thoughts on the following skills I believe you need for MHP investing.

As a note, these are in no particular order because they are all equally important.

Skill 1: Marketing

According to the American Marketing Association, marketing is the activities, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for consumers.

Marketing makes the world go ‘round, it seems like. And, it is never one thing because there are multiple different types of marketing and audiences, and no two combinations of marketing and audience will perform the same.

In 2019, Ian and I bought a property only 20 minutes north of another one of our properties where we had a waiting list. Even though this second property was only 20 minutes away, we have to completely change our messaging.

Through your own research, you will need to figure out the medium and the message. Some markets are full of wannabe homeowners. Some are full of renter minded folks that want flexibility. Some markets love Craigslist while others love Facebook. Sometimes a hybrid strategy will work for you.

Be prepared to adjust both on the fly. Different markets respond to different things. Sometimes you’ll have to gut your entire strategy and start from scratch.

Skill 2: Sales

Marketing and sales can go hand in hand. Where marketing lures potential tenants in, sales digs deeper to latch on. What do I mean by this?

Not everyone who shows up will fall in love with your property and sign a lease without issue. Prospective tenants are going to ask some freakishly good questions.

How do I know you are committed to keeping this property safe and clean?
Why would I pick your mobile home park over a similar local one?

I’ve said it once, but I’ll say it again - sales isn’t about a sexy pitch. It’s about uncovering objectives and the deeper concerns of your prospective tenant and then addressing those psychological impediments.

Skill 3: Tenant Screenings

What kind of tenant do you want to rent to? This is a question you want to figure out first. Why? Because tenants can make your life a living hell.

Not every prospective tenant that walks into your office will have a 700+ credit score with a great job, clean criminal history, and no vicious pets. In fact, that is the minority.

As MHP operators, we are dealing with individuals who are looking for affordable housing. Naturally, you’re going to get prospective tenants that you’re going to be on the fence about.

And, you will have to make a decision all while being in accordance with fair housing laws.

Take it from me...answering this question, and doing proper screenings will have you a headache.

To date, we have only evicted a tiny portion of people we screened ourselves. It was significantly less than five percent. But truth be told, Ian and I had a mentor who walked us through what to look for so we could properly take a risk on a certain tenant.

Skill 4: Negotiation

Here’s something that may be surprising. I negotiate almost every day, but it’s not what you’d guess.

A lot of individuals who want to get into MHPs dream of fast-paced, adrenaline-filled days. And while yes, we negotiate deals with mobile home park sellers, we only close those a couple of times per year.

However, on the daily, we interact with hundreds of tenants, contractors, county employers, potential investors, our employees, and so on. You will negotiate everything, especially with tenants.

With tenants, you’ll negotiate everything from fines to peaceful exits to new tenants wanting deals on homes. The truth is, different negotiations require different strategies and techniques.

While a bulldog negotiator might come in handy when talking down a contractor you’ll never see again, having empathy while being firm works better when dealing with a peaceful exit of a non-paying tenant that you’ll also never want to admit back into your property.

While there are some things you can outsource, negotiating is not one of these things. You can leave so much money on the table if you don’t do it right.

Skill 5: Basic Accounting

If you can’t trust your books, how will you know if you’re bringing in revenue?

Now, if you can hire a CPA and bookkeeper upfront, this won’t be a problem. But, if you’re like us and starting out fresh, you probably won’t be able to afford a bookkeeper. So, you’ll need to do it yourself.

Neither Ian or I had any kind of account experience and worse, we picked a great CPA who had no real estate specialty. Our books were horrendous, and our CPA essentially was unable to help for a reasonable price.

Eventually, we found the right CPA and through a lot of humbling data entry, we fixed our books. But it set us back hours and thousands of dollars for not having that skill.

Skill 6: Financial Analysis

If you want to scale your business or bring in investors, you have to have some type of knowledge in financial analysis. Or, hire someone who does.

Luckily for us, Ian’s background is in finance, and we relied heavily on him when we first started. Had I begun this on my own, I would have gotten crushed.

Why? Because lenders and potentially investors expect clean, logical pro formas, and more importantly, you’ll have to answer the big questions like “how much money will I make?”

And remember this, your pro forms are only as good as your assumptions. If you’re assumptions are trash, you won’t know what you’re getting into, and if you don’t know what you’re getting into, you won’t be able to answer the question about time allocation, which is “is this property going to pay me enough to make it worth my time relative to other opportunities.”

Believe me when I tell you, if you can’t answer these questions, your potential investors or lenders will pass you by because as Mike Conlon puts it, “you can only take on so many projects at a time.”

Skill 7: Collecting Back Due Rent

Evictions are no fun for anyone, but you have to know when to execute this power.

Most people won’t believe this, but the mobile home park industry is a collections business. The art is being able to pad your revenue with late fees without increasing your uncollectible bad debt.

If you continue to practice this skill, eventually, you’ll be able to spot someone who is going to go belly up before they finish explaining to you their situation. But, some people are so good at living on the fringe of always losing it all, that their stories are incredibly persuasive.

I have tenants that I have never met and will likely never meet. I have tenants that I know on a first name basis because they are always up to something.

Is that additional aggravation worth the late fees? You’ll need to determine that for yourself.

Skill 8: Emotional Intelligence

In the heat of the moment, people don’t always listen to reason. Sometimes you’ll need to diffuse a potentially dangerous situation.

Emotional intelligence is half understanding situations and how to handle them and half understanding yourself and how to control your own emotions.

Regardless, if you want to be a better persuader, marketer, manager, you’ll need as much emotional intelligence as you can get.

Skill 9: Employee Management

I’ve never had more than a handful of employees under me at any given time so I do not feel comfortable taking a deep dive into this because I am still learning and making mistakes.

Having an employee is like having a spouse. They’ll either amplify the quality of your life or multiply your misery. At times, they'll do both at the same time. In my limited experience, I will say like finding the right spouse, finding the right employee will make your shortcomings that much easier to overcome.

Skill 10: Contractor Management

Hiring a contractor isn’t like buying something at Target where if it doesn’t work out, you can return it and get a refund. Hiring the wrong contractor can set you back thousands of dollars, if not more.

You’ll need to make sure you’re getting the most out of your contractors while also making sure they are motivated to continue to work with you. It’s tough to find good work. When you find it, you need to find a way to keep them happy.

When they’re bad, you need to find a way to minimize the damage and then never call them again.

Skill 11: Property Management

I could talk for days about property management. Unfortunately, if you are starting with nothing, you will not be able to hire a property manager while also being able to quit your job.

Here’s what I did….

When we first started, I quit my full-time job and paid myself what we had budgeted for a property manager. The good news was that I only had to be my own property manager for about 14 months.

If you ask Ian, he will tell you that it was painful, but he’ll also tell you that it was the best thing for him and I because we achieved a frontline experience and an education that no bootcamp could give.

Skill 12: Spanish Speaking

Regardless of your political affiliation or thoughts on immigration, Spanish speakers are flooding this country legally and illegally and the excuse of “it’s our country, and you should learn our language” isn’t going to work and will not get you paid.

I have had some wonderful tenants and contractors who are full citizens that just didn’t learn English. The most important thing for me is building trust. So, while my Spanish is not great, I built a working knowledge of conversational Spanish that I could use daily.

It means a lot to people when you meet them face to face and confidently to them in their language.

Could you outsource this? Sure, but you will lose a seriously good opportunity to build trust.

Skill 13: Efficient Time Allocation

You must be able to identify the most valuable activity and maximize time spent on those.

It’s not as easy as saying “X activity pays $10, Y pays $5, and Z pays $1.” If that were the case, if you can do one, obviously you would take the $10 activity and if you could pay someone $2 to do the $5 activity, you would.

Unfortunately, life doesn’t always make things that simple, and there are a ton of time traps out there.

Put it like this, spending an extra hour on a pro forma might lock in an investor, but spending that same hour cold calling might get you a finder’s fee or a new deal.

What’s the takeaway?

The bad news about not having some of these skills is that you will have to pay in some way, shape, or form for not having them.

The good news is that although someone will have to be compensated, there is no reason that it can’t be you.

You can’t get anywhere in life without sacrifice, especially if you are starting with nothing. Where there is difficulty, there is value. Where there is value, there is compensation.

If you’re willing to do what it takes to learn and are able to find someone willing to pair up with you, then you, like I did, can find a way to start with nothing.