Doug Van Buskirk found out very quickly that he did not want the life of an employee after working 12 hour days in his first corporate America job right out of college. So he did something about it.
After taking a year off to explore Australia, a chance encounter with a copy of Robert Kiyosaki’s Rich Dad Poor Dad on his flight back to the U.S. inspired the entrepreneur to take on the world of mobile home investing. Nothing else was the same after that.
In this exclusive interview, the co-founder of REI Training Ground shares about his path into mobile homes, what they mean for entrepreneurs like you, and also dispels some common myths about investing in mobile homes.
Q: How Does Mobile Home Investing Work?
A: There are two different profit models we use primarily. The quick flip or wholesale approach. We will find motivated sellers and contract the property at a discounted price. We will then look for cash buyers who will buy at a marked up price, and we will keep the difference. That’s the straight forward route.
Now, building passive income in mobile homes, we will find motivated sellers to get properties at a discount, but we’ll close on them ourselves, fix what needs to be fixed, and resell them on payments. We would resell with a substantial down payment from our end buyer, and we’ll spread out the rest of the loan over 24, 36, 48 months, whatever makes sense as you as the investor and them as the buyer.
What’s really cool about this is a few things: The kind of mobile homes we are focusing on are cheap, used mobile homes. We’re getting them from $3,000 to $10,000. I will rarely pay $10,000 cash for a mobile home. Prices will vary based on the region you are in, but that’s a good baseline.
You can buy these things cash, and then sell them on payments so you don’t have the mortgage liability each month. It lowers your risk in the sense you don’t owe the bank $600, $800 every month, so you are able to keep all the payments coming in.
Because you are selling these things on payments, the tenants who move in, the buyers who pay in take care of maintenance, upkeep, repairs, so you are not a landlord in the traditional sense. No paying management companies. These things essentially manage themselves, and the buyers are motivated to continue making the payments because you collected a substantial down payment up front. It’s a low-touch, no-touch passive income vehicle.
Q: What was your first mobile home deal like?
A: My very first mobile home deal. I actually dove in pretty quick, and I got three mobile homes within 10 day sof learning the side views. I had it up to here with working, so I got three deals right away.
I was planning on fixing them up and selling them for payments, but what happened was the second or third one I entered into contract with, this guy was moving out of state with his family, he already had his house packed up, he just needed to get out of dodge. He needed someone who could close quickly, and get the deal done.
Well, I was able to negotiate a steep discount because I was going to close quickly with it, and I ended up getting it for $6,000. It was a 1995 model. A nice playce. It was shocking you could get these places for that cheap. I probably had to put $500 to $700 to fix things up. Ended up having a cash buyer call me out, and long story short, after a week and a half of hangling with them, was able to close at $17,500.
It was over a $10,000 winner, and needless to say, I was in this thing full-go now. I reinvested that into more homes, building on passive income, and I kept reinvesting, kept reinvesting, and that was how I was able to quit my job within 6 months of starting.
Q: What is a typical day like for you?
A: I am doing multiple things now. The business is driven by marketing, and the second is relationships. With the marketing, we are doing a lot of things. Guerilla marketing works well in the mobile home space, in which you are getting things out there, and connecting with park managers, park owners, people who are influential in the industry.
If it’s a park owner, and they know someone needs to sell and they know I can take care of business, they will call me and that is how I get quite a few deals. It’s such a high-leverage activity because all of us a sudden, you are not having to pay for outbound marketing as much.
Typical day, now I’ve gotten to the point where I am not doing the physical marketing, I am not putting out bandit signs, I am not putting together marketing campaigns. One cool thing we figured out that any investor can use this technique or approach. We are paying people out of profit, rather than out of pocket.
We ordinarily might need to pay someone to put signs out, but that’s not feasible for every investor. We had a set up with our guy, and we’ll pay him once we pay a fee for when we get paid for one of his marketing pieces.
Q: What are your tips for operating an efficient mobile home investing business?
A: Getting someone else to do the marketing, having someone else in place to take the phone calls. As soon as we implemented that in the business, that was a huge turning point and a huge growth and development piece for us.
If you’ve got, whatever kind of marketing you have out there, anything across the board, you are going to get a lot of calls in and a lot of them won’t be qualified leads. You don’t want to spend all your time as business owner, visionary, the ideas person, being bogged down talking to unqualified leads. Phone person has to screen people, they don’t need to be a real estate person.
What are the three most important pieces of information I need to know? Give them that script, and you can pay out of profit anytime a deal closes. Anytime you can manage your overhead, keeping overhead down is a big deal, and it doesn’t matter how long you have been in business.
The third efficiency tool is the relationships you build. It may seem like a waste of time, or it is out of the way to stop at a mobile home community and speak with the manager, because there are no deals. Those little pop-ins, that kind of stuff is the highest-leverage activity you can take part in as a mobile home investor.
A connected set of eyes and ears. I have even had park managers show the properties for me as a favor, and it comes from building that relationship. That is the highest leverage activity, absolutely, and something anyone getting into this business can do to build success.
Q: How does one succeed in mobile home investing?
A: One thing I would suggest for people to succeed is to plan. You have to have a plan of attack. You have to have a well-defined target, or it is going to be hard to create the success that you want.
One thing that held me back for awhile, and one thing I see with other business owners, is having blurry goals or a general idea of where they want to go, but not a specific, crystalized vision of where you want to go. Once you have that, it’s about working backwards, and breaking it up into smaller tasks.
If you break that down into mini-milestones, and you break that down into steps, if you get this many closed deals, you can expect… We can’t control directly how much money we make, but we can control how many mail pieces we can send out.
Q: What are some of the misconceptions of mobile homes, and why are they so prevalent?
A: A couple of the misconceptions come from popular culture. The ‘trailer trash’ thing, that mobile home parks are bottom of the barrel real estate. That’s not true across the board, and I think that is what has kept mobile home investing an under-the-radar kind of niche.
There are bad neighborhoods just as there are bad mobile home communities, but there are great opportunities to make good deals, good money, and to help people achieve the dream of home-ownership within those kinds of communities. That comes without the headaches of bad tenents, which is what keeps people out of the niche.
Because they are cheap, people think there is not a lot of money to be made. A $10,000 flip on a light cosmetic rehab, that’s great. That is the kind of profit you might get on the quick flip of a house. The profit potential is very similar than single-family houses, but there is a lot less risk.
The misconceptions have caused a lot of people to overlook or ignore mobile home investing, but that could not be better for those who choose to play in this space. There is low competition. If you are out looking for single-family properties, there is going to be competition.
We have students brand new to real estate who have gotten in, and flipped deals in less than 60 days collecting the money, and built momentum because they weren’t fighting a lot of big fish, big pros in the industry. It is very easy to enter and get started because of that low competition.
Q: So, at what point did you decide to get into the real estate training business?
A: A lot of it started with the excitement I was getting from people I was talking to about my story. The response I got from family, friends, acquaintances was incredible. The more I shared this with people, the more they wanted to talk about how they could do something entrepreneurial themselves. Those kinds of conversations initially stoked the coals for them.
My partner, Shawn Brooks, had been investing for five years, and we got together and realized this information was so powerful, so potent, we thought we could break down our success system into a formula that anyone could get the same results. It was something that stimulated us, and we got pumped up.
It’s exciting for me to see how far I’ve come, but I am most excited when I get emails and calls from students about what they’ve done with our material. A guy in Pennsylvania flipped a deal within 60 days, but then did another deal, and made $4,500 cash from it. Six weeks later, he said he had gotten married, and was able to stay at one of the top resorts in Mexico with the cash he earned. I was so excited to hear about that kind of success, and to see it really taking shape and manifesting in this guy’s life. That’s the driver for the training side of thing.
Q: What can students expect to learn from you at REI Training Ground?
A: Basically, we lay out the overview of the industry. At that point, we take you through step-by-step, the quick wholesale strategy and approach. Students want to get their feet wet getting a few deals. The want to become passive income producers. We start out showing you the ropes for finding the deals, and how to flip them for a nice profit in a timely manner.
One of the things we’ve done within the course is lay out the first 30 days. We understand people are short on time. People are working a full-time job, they’ve got a family, they’ve got kids, and they are trying to carve out real estate time. We created a 30-day plan to spend an hour a day in the course and working to implement their marketing plan. We feel and know it will work because it’s the system is what we do over and over again. That is the intial jump start part of it.
We’ve got into it step-by-step, teach what kind of deals make sense, how to analyze these deals, how do you get it into resellable shape, different video training and written modules to explain how to negotiate the deals, reselling on payments, and making sure you get your money.