Editor’s Note: Welcome to the companion article to Episode 10 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.
“When the next recession hits, I’m going to purchase a mobile home park…”
I’ve heard this countless (and I mean countless) times from friends, family, and strangers. Let me ask you this…if everyone is waiting for the next recession, do you really think MHP prices are going to go down? Absolutely not.
Take it from me - you have to put in the work and jump in when the time is right. Believe me, jumping in at a recession is not the right time.
Putting in the work and finding an MHP to invest in when the time is right starts with taking care of your lead database. If you’re working through your database, you can place or send well-timed cold calls.
No one really likes cold calling. You don’t know the person on the other end. They may not pick up. Or, if they do, you might get nasty comments. It’s really a crapshoot.
But, cold calling has to be done, and it can not be outsourced.
Outsourcing is not the way to go.
In my opinion, outsourcing cold calls is a waste of money. The whole concept of cold calling is built on rapport building and answering questions that sellers have. Do you really think someone who doesn’t know anything about mobile home parks is going to be able to answer those types of questions and build a relationship with the seller? No way.
Sellers get bombarded with calls and adding another insincere call to the pile isn’t going to make you any friends.
You must always remember this...you’re aren’t just competing with other potential buyers. You are competing with brokers, who spend hours cold calling. In most cases, brokers are the best-case scenario for sellers. Why? Because sellers want to sell their property at the highest price possible and a broker wants a large commission. And you guessed it….a large commission can only be made on a high selling price. Because of this, and many other factors, be ready to get rejected a lot.
How do you minimize your chances of being rejected? You must find a way to interact with the owner yourself and on multiple occasions. Otherwise, you’re going to get drowned out in the noise.
My advice….think about your endgame and laser-focus on a small portion of your database. This advice is particularly good for those who aren’t working full-time on their MHP business.
Here’s an example….
I have a database of 1400 entries. Let’s assume that on average making the call takes one minute (to call, ring, and leave a message). If I only did that, it would take 24 hours from start to finish. That time doesn’t include if I got someone on the phone, which could take up to 20 minutes.
If I only focused on 20 percent of my database, my contact rate would increase to calling my contact once every other month or so instead of once or twice per year.
Because I know that I can’t spend more than an hour at a time cold calling, I put in three to seven hours a week calling a well-planned and thought-out list, which is what I would call laser-focus.
In the end, laser focus will make you more efficient with your time and efforts.
When cold calling, you need to be different.
Let’s face it, cold calling would be much easier if both parties kept to a script. Unfortunately, that’s not how the world works and people are brutally self-interested.
Let’s take my 10-year-old Honda as an example. My 10-year-old Honda has a little over 100,000 miles, it’s paid in full, and I am not looking to sell. Let’s say that I receive four calls….
Buyer one calls me out of the blue and asks if my Honda is for sale. I would tell them no, it isn’t. They ask me to consider selling to them when the time is right. I would say “sure” and hang up the phone and immediately forget about them.
Buyer two mails me a postcard. Without even looking at the postcard, I would throw it away.
Buyer three calls me and tells me that they’re a family business, looking to buy a Honda in my area. I would say that sounds nice, but no thanks.
Lastly, Buyer four calls me. Buyer four tells me that they’re looking for my specific make, model, year, and color in the area that I live in and asks me to sell to them for a compelling cause. This would impress me and creep me out a bit. But, I would consider speaking with them. However, because this ask is so specific and I’m not looking to sell my car right now, I wouldn’t even sell to them at a reasonable price.
Now, with that being said….if buyer four had called me when I was looking to sell, I would have and at a reasonable price.
My friends, timing is everything. Eventually, a cold call or mailed piece will influence my decision to sell my Honda.
With no rapport building and limited marketing touches, sellers will forget about you. In a world where everyone has a database and has the same message. How are you different?
MHP investing doesn’t begin and end with cold calling. You have to continue to grind.
Mobile home park investing has been billed as this “easy, passive income, four-day workweek” concept. In reality, it’s more like running a marathon. You always have to be training. (A lot of people don’t realize this.)
I speak with a lot of newbies who want to get into MHP investing. Typically, I like to categorize newbies into two buckets - passive income seekers and true entrepreneurs.
Passive income seekers want to quit their full-time job, get rich quick, and have four-hour work weeks. They don’t want to be involved in the process.
True entrepreneurs know that they’re going to have to grind, sacrifice time and money, and essentially work a part-time, zero-salary job. I would put Ian and myself into this category.
Ian and I started grinding in 2015. We didn’t close on our first deal until 2016. We were two young, hungry, wannabe entrepreneurs with big dreams, way too much time, and a skillset of selling. After a year or so, we got lucky. We hit the timing right. But in that year, we sacrificed time, money, and effort. At that time, our minds tried to convince us that we wanted to quit. But, we didn’t.
Why? Because we got a taste of what I like to call the “cartwheel.”
Mobile home park investing can make you feel one of two ways - like you’re flatlining or doing a cartwheel.
When I talk to passive income seekers who are in it to “get rich quick,” they tell me they want to have a passive income stream so they can quit their job and pursue their dreams. When I ask what their dreams are, they are incredibly passionate. But, when I ask about mobile home park investing, it sounds as though they are a heart monitor flatlining. Seriously, you can see the light go out in their eyes.
When I talk to true entrepreneurs though, it sounds as though they are actually doing cartwheels. You can hear the adrenaline rush, the happiness, and the elation in their voices. I love talking to these people.
A few weeks ago, a listener called me ecstatic, about how he just closed his first deal. He told me the first rent checks just cleared the bank and he had never been excited like this in a professional sense. I felt like he called me in the middle of him doing a cartwheel.
Now, I’m not saying both groups of people can’t invest in mobile home parks. What I am saying is that this is still a job. It’s not easy and sacrifices will be made. It will only be worth it if you feel like you’re doing cartwheels.
I’ll leave you with this.
In a world full of wannabe MHP investors, are you a flatline or a cartwheel?