I need to be doing this full time within 6 months! - Posted by Ken L (Mi)

Posted by Ken L (MI) on April 28, 2006 at 15:47:10:

I’ve noticed that about the “Newbie Challenge” people. I am very interested in the cold hard truth so you spelling it out for me doesn’t scare me, it simply better prepares me. I am not one for sugar-coating. What I really want is candor. I appreciate your responses. I am sure I’ll be a frequent contributor to the site once I get my feet under me.

Here’s something interesting that just came about today. I have a mobile that needs to be moved onto a lot. I posted a while back about buying a repo. I didn’t get it, I had bid $500 and it sold for $1000 the day before I called back to up my bid to $1000.

Anyway I had my brother contact the lady who bought the mobile to see if she was paying lot rent or whatever? She is moving it. I told him to offer he $500 to swap them. Saves me the cost of moving and saves her 1/2 the cost of moving. Solving problems is what we do.

Meeting her tomorrow, she’s going to look over our mobile and see if we can come to some type of deal. This is the type of thing that fascinates me about this business. I should have offered $1000 if that’s what I was willing to pay for the repo though. Lesson learned, don’t get too cute.

I need to be doing this full time within 6 months! - Posted by Ken L (Mi)

Posted by Ken L (Mi) on April 27, 2006 at 13:02:09:

I have money, about $10k to spend. I have a backer that I can get notes from. I have excellent credit. I need to be pulling in about $2k per month to make this happen. I have 1 home ready for sale and one that needs to be moved (either to a park that I am pre-approved to move it to or to a lot I don?t own just yet). I am asking for the help and advice of the CREONLINE group to aid me in this quest.

I have recently built a house (wife?s idea but I am loving the place just the same) and I have to come up with about $2k positive cash flow before I can move to doing this full time. I am willing to do anything, rent mobiles, rent houses out, clean up, remodel, finance mobiles through a hard-money lender, finance notes through local banks and credit unions, whatever it takes. I?ve had enough of working the 9-5er. I have a child on the way in August so I need to really drop the hammer here and get on my way. I need some direction. I have 1 park I am working with already and have a great relationship and another 4-5 parks potentially within an hour’s drive.

I have partnered with my brother but he doesn?t seem to want to really dive in full time, he?s very tentative and doesn?t seem to be motivated to the level I am. He doesn’t want to get into huge projects like replacing flooring and stuff like that. He?s a hard worker but he seems gunshy a little after his last business put him about $60k in the hole.

What steps can I take to accelerate the process and get to $2k per month positive flow within 6 months?

I have 7.5 vacation days to spend this summer, a full pack of smokes, it?s dark outside and I?m wearing sunglasses?..hit it!

…full time within 6 months! - Posted by Vanessa

Posted by Vanessa on April 28, 2006 at 15:51:09:

I love your enthusiasm! With some hard work, determination, and FUN, you can do it! I’ve got some things in mind that could jumpstart you, for sure! Shoot me an email at vanessa@veproperties.com and I’ll fill ya in.

Talk to you soon,
Vanessa.

IT CAN BE DONE ------ ** L–O--N–G ** - Posted by Bobbie

Posted by Bobbie on April 28, 2006 at 12:50:28:

Ken,

We are new to mobiles. Started last August. Have purchased 5, selling #4 tonight. One left to rehab.

We are a husband & wife team and we are OLD!
I believe you can reach your goal but would like to mention a few things from our experience.

  1. Figure in a reserve account. We have put away space rent for 3 months for each mobile to cover expenses in case they come back to us.
  2. We can buy and sell them very easily. Our problem is the rehab TIME (not necessarily the $$).
  3. Be prepared for unexpected accidents. Case in point: Two weeks ago, my hubby was using the table saw and lost his balance. He tried to catch himself and put his left hand on the RUNNING table saw. He almost lost 3 fingers!! Rehab came to a halt for one week putting us behind in schedule. Rehab work is going much slower due to recovery of injured hand. [It’s not easy to use tools, move appliances, paint, etc. with one hand.]
  4. Buy one at a time. Fix it and sell it. Repeat the process. We purchased 3 at one time and had to eat a lot of space rent while we rehabbed one at a time.
  5. Find a good helper-handyman. Post a “help wanted” card on the park’s bulletin board. You will be surprised at how many people in the park are unemployed, experienced and very appreciative of any work they can get. We pay based on experience but don’t go above $10 hour. We pay them cash at the end of each day.
  6. Make sure your wife is committed as much as you are because your own personal residence and life will feel the affects of this business. Just finding time to keep up your yard work is difficult when you are rehabbing another property.

We are collecting $900 per month from four notes. Not great, but I let a few folks in with good down payments and LOW, LOW monthly payments @ 13.75%.

We have a chance to buy two more in this park but decided to hold off until our last one is completed for above-listed reasons.

I wish you success. You can reach your goal but be smart and CYA by being prepared in advance for any unforeseen challenges.

Happy investing,
Bobbie

I’m @ 6 months 10 days and $1923 per mo - Posted by Blake Id

Posted by Blake Id on April 27, 2006 at 22:34:13:

Your goal is absolutely achievable. Given your bankroll of 10k and your desire I would be surprised if you didn’t make it.

3 Pieces of advice. 1. Be selective in the homes you buy. Do not be a motivated buyer. 2. Focus on getting your money back as fast as possible. My goal is 4-8 months and I pass on deals that take 10 or more months to return all my money incl holding costs assuming a down payment of $500-$1000. 3. Pace yourself and borrow as little as possible. Your most rewarding (financially) deals will be the ones with your cash in them. If your focussing on getting your cash back as fast as possible that will make this easier. I really pushed myself and took hard money to generate 5 notes in about 45 days and the net cash to me after debt service was less than the next deal that I did with my own money (and that was only one MH. I may look smart when the money’s paid off though).

Bonus advice. Consider going it alone. It sounds like you’re highly motivated and any partner you have will probably not be anywhere near as motivated as you are. This was a source of frustration for me and you’ll also get to keep twice the money.

So… Pace yourself, use your own money, and get it back as fast as possible. Good Luck -Blake

RE: Full time within 6 months! - Posted by JP (in PC)

Posted by JP (in PC) on April 27, 2006 at 21:50:40:

I don’t know that I’ll have anything helpful or insightful to say other than I am about to try the same thing starting in November and I think it can be done with proper planning, knowledge,and strength of will.

My current career is ending (on my terms) and I no longer want to work for somebody else. Retiring from my current job will leave me with healthcare and an income of about 20k a year. My wife and I sat down and figured out what we could sell/save between now and then and what our $$ needs would be. We came up with enough money to live on for a year + 30K to invest with. We didn’t figure on donating blood for the cookies or eating Ramon noodles 3 times a day so I think we came up with a fairly conservative plan on what it would take to make it year on our budget.

We’ll give it 6 months and evaluate where we are and adjust accordingly. At the 12 month point we can continue if we are close and can see that it is going to work or I can suck it up and go find a job somewhere and do real estate part time until we get the income we need to quit the job again.

I’ve lost some sleep thinking about the next year and half and how we can make this work. Having a steady paycheck for 20 years and not having to worry about how the bills was nice but having to get up and go to work when and where they told me was not. So, we’re going to give it a go and if the plan works, we’ll be one of the folks at the convention who can stand up and say they are unemployed thanks to MHs.

We’ve done well (in my opinion) with SFHs here in FL and have dabbled in MHs in parks and have a small park that is holding it’s own but isn’t enough to tap any of the income from (yet).

Anyway, seeing other folks talk about the same idea does me good. Thanks for the advice you all are giving and please keep it up.

John

Leaving your job - Posted by Chris Reuman (Maine)

Posted by Chris Reuman (Maine) on April 27, 2006 at 20:55:05:

If your lonnie deal monthly payment is $200 a month then your profit will be $100, if you sell for double. So for $2000 a month, you’ll need a minimum of 20 Lonnie deals or more.

However, my advice is to work backwards. What opportunities are available in your area: cheap lonnie deals, new repoes, mh that need a lot of repairs, mh/land banks, stick built rehabs, mobile home parks, etc.

I like Tony and Scott’s courses on Mh/Land banks for large chunks of cash and mobile home parks with rentals for long term cashflow and appreciation. Since the mh/land banks can make you $10-20k per deal, these will easily provide you with the money needed to quit your job, invest in Lonnie deals, mhp, and more mh/land deals.

Best investing, Chris

Re: full time within 6 months! - Posted by Sailor

Posted by Sailor on April 27, 2006 at 17:26:27:

Don’t know how long that pack of smokes is going to last you, but my guess is that if you gave them up you’d only have to work 11 months a year instead of 12 (not counting increased insurance cost & health costs for you & family).

Other than that, my best recommendation is to put your plans on paper: (1) figuring how much you really need to make to replace your current income & benefits (I think it takes roughly 3 times salary to maintain standard of living), & (2) how you’re going to get there (i.e. biz plan).

Tye
(who gets to give smoking advice only because (a) she’s old & deserves to be allowed to rant on occasion; (b) she quit a 3-pack a day habit cold turkey in 1973; © in 1981 she witnessed a smoking workman in her office drown in his own blood when he coughed so hard he blew a blood vessel in his lung–glub, glub.)

Re: full time within 6 months! - Posted by Tony Colella

Posted by Tony Colella on April 27, 2006 at 16:44:00:

Ken, I do applaud your willingness to do anything, even landlording to make yourself financially independent. However, I am a realist and financially concervative when it comes to family and personal money.

Real estate investing, despite the hype, is a get rich slow (but steady) investment. Can you create $2k per month net (positive) income in 6 months? I don’t know. I wouldn’t put myself under that kind of pressure personally but to each their own.

Begin by asking yourself how much net positive you have been able to create so far and then see how long it would take you at that pace to create $2k per month net income and how long that income would continue (note vs rent etc.).

Then be realistic about how much more time and how many more deals it will take to reach that leve, even if you ramp things up.

If you are not realistic you are doomed to fail and the frustration of missing that goal can kill a promising business.

This is a business and net income, while very important, is only one factor in a very large equation.

Going full time also includes additional expenses you may not have right now such as health insurance, etc.

Please understand that I am not trying to discourage you by any means. I just want you to take a realistic approach to your goal. The goal is possible but only your true reality can tell you what the time frame really is.

Tony

Re: I need to be doing this full time - Posted by JeffB (MI)

Posted by JeffB (MI) on April 27, 2006 at 13:28:24:

Are you talking about $2k per month positive cash flow above and beyond what you will need to reinvest to keep your business growing?

I give you credit for having the guts to quit the job, but think long and hard about how that will affect your business growth before taking the plunge.

Doing the repair work yourself is a big step in the right direction. I currently do nothing myself and it has definitely impacted my yields, but I don’t have any other choice. Saving all that labor $$ can be a big boost. On the other hand, it also consumes much of your time that can be spent doing other deals. Just food for thought.

ooooops - Posted by Lynn

Posted by Lynn on April 28, 2006 at 22:33:09:

Thought I “lost” my first post. Wrote it again and now there are two! Sorry everyone–I’m computer challenged! Lynn

Our first deal was “as is”… - Posted by Lynn

Posted by Lynn on April 28, 2006 at 22:30:21:

…but started off as a rehab, like Todd’s. In the one week that it was advertized we replaced two door knobs and a storm door. The couple who bought it, loved it “as is”, which suited me! Sold it “as is” and will likely do all of the rest of our deals (she says confidently) that way. Todd had good advice! Thanks to everyone here who shares their experiences–it’s ALL gold!!
Lynn

Re: IT CAN BE DONE ------ ** L–O--N–G ** - Posted by Todd (AZ)

Posted by Todd (AZ) on April 28, 2006 at 14:56:04:

Hi Bobbie,

It seems that the re-habbing part is “worst” part of your business. Have you ever tried to sell “as-is”? Imagine if you could cut out virtually all rehab work. Based on your post, and the fact you have a few for sale at the same time, it might be worth trying? On my second purchase, I started cleaning it and was prepared to rip old, nasty carpet, fix walls, paint, etc but decided to run my ad while I fixed. It sold within days and I had nothing to fix! LOVED THAT! It was early on, thank God, that I realized as-is works in my market and thats all I focus on. Just a thought. Todd (AZ)

Thanks for the great advice - Posted by Ken L (MI)

Posted by Ken L (MI) on April 28, 2006 at 09:58:20:

  1. I am going to try this. I live in a two of about 12000 people in rural Upper Michigan. There are two decent parks in town, both operated by the same owner. So far we are in good with them. So I am working those. There are probably another 4 parks within 1.5 hour drive of here. I am obviously going to need to tap into those as well. Land is pretty cheap up here as well so I want to get rolling on some land/home deals too but I probably won’t see as much initial flow on those. But with financing, I might. I am a motivated buyer but I think I know what you mean here. I don’t want to step on my own feet so I will be diligent and just have to work harder to find home I “should” buy instead of homes I “could” buy.

  2. Very good advice and I will take this to heart. I will need to get my money back quickly. 4-8 months huh? Wow, I was focusing on 1 year, but that might need to be tweaked for this mission.

  3. I will pace myself and borrowing as little as possible will definitely be a function of number (2) as you mention.

As far as the bonus advice there are a lot of considerations there. My bro is my best friend as well and I don’t want to come across as being haughty to him. But I have told him that I am doing this as well. He doesn’t have a lot of money right now as he recently changed careers and hasn’t exactly stormed back into the workplace. He always seems to want to wait it out a little bit longer (not taking a full-time job so he can do more Lonnie stuff, but then he also wants me to do half the work so a lot of the time he isn’t doing anything). I am going to ask him to see if he would be interested in my paying him to be more of a handyman type situation until he gets his financial situation cleared up. Helps and and helps me and that’s the crux of the Lonnie deal–solving problems.

Re: RE: Full time within 6 months! - Posted by Ken L (MI)

Posted by Ken L (MI) on April 28, 2006 at 10:16:50:

I hope it works out for you as well. I am only 32 and staring down 30 more years of computer geeking, which sucks. It’s constant complaining and with all of the college kids now having grown up on computers, it’s like they know as much if not more than me right off the bat, and they’ll work for cheaper.

Tony/Scotts course - Posted by Ken L (MI)

Posted by Ken L (MI) on April 28, 2006 at 09:47:16:

I’ve purchased and read part of the Land/Home book here. Does this go into enough detail to get a good handle on what you discuss with the land/bank? Or do I need to buy something else. Like I said I am willing to do anything?

Re: full time within 6 months! - Posted by Joe

Posted by Joe on April 28, 2006 at 15:20:12:

“I think it takes roughly 3 times salary to maintain standard of living”

That sounds a bit off. Unless you’re only making $10k/year in salary, it’s hard to believe your employer is spending all that extra money on your benefits. I would say it takes 1.5x salary. Someone making $40k/year can probably cover themselves with $60k/year independently.

I was quoting the Blues Brothers - Posted by Ken L (MI)

Posted by Ken L (MI) on April 28, 2006 at 09:44:50:

I don’t actually even smoke. Just seemed appropriate. But I do appreciate your concern. I also appreciate the input of the second paragraph that’s a great idea. It really is time for me to get serious about this.

I do have the benefit of my wife being a content member of the Teamsters at our local Paper Mill. She’s got the benefits covered and likes her job very much. Her only problem is that she makes a lot of other teamsters look bad by doing her job so well. She might opt to work for the company at some point (her boss has asked her about this more than once…very good employee).

As far as that third paragraph, yikes…and glad you quit. My dad and mom both quit while I was growing up. I promised my dad when he quit (I was about 7 years old) that if he did, I’d never start. We both made good on it.

Thanks Tony! - Posted by Ken L (MI)

Posted by Ken L (MI) on April 28, 2006 at 10:29:43:

I am not looking to get rich. $24000 income in a year is not rich, it’s realistically what I need to get out of the 9-5 world which I so badly wanted into just 10 years ago.

I don’t see how it’s putting myself under pressure. I am under pressure now waking up and thinking of calling in sick every single work day. It’s pressure to drop my daughter off at daycare for 40 hours per week. It’s pressure to watch my pregnant wife have staring down the barrell of having only a couple of weeks off with our new baby in August while I know darn well she’d much rather spend time with our kids (they are only little once). So the pressure of becoming self-sufficient to me is not that bad. I have the goal of six months, I haven’t give notice at my job or anything like that.

My net positive income so far is nothing. I’ve purchased two mobiles. Showing one today and have to move one to a lot (either one I purchase or in a park) to get anything out of it. So I am basically starting from scratch but I am finally going to stick my nose to the grindstone…I haven’t exactly done that. I am sick of the “Amway” mentality of talking about how great it’s gonna be and “keeping my powder dry” and stuff like that. I have partnered with my brother and he’s risk-averse. I am going to have to deal with that, but I know this going in.

I think I can find 1-1.5 deals per month. Now, if I have to finance those and have my bro do the work for an hourly wage just so he can make ends meet and I can actually get these rolling, that’s ok by me. That’s 6 deals that will be paying me about $1500 per month by the end of August. A few more in September and October and I’m there.

The savings on daycare and the fact that my wife gets great bennies is a nice cushion.

While I appreciate your wanting to temper my enthusiasm with reality, I think that is what I am trying to do. I really appreciate your candor and willingness to open my eyes. If I am in denial here in you opinion, I’d appreciate you saying that as well. I have thick skin and truly want to succeed. I am not big on fairy tales.

Re: I need to be doing this full time - Posted by Ken L (Mi)

Posted by Ken L (Mi) on April 27, 2006 at 13:46:03:

I am saying that I want $2000 positive cash flow before the 1st of 2007. Then I am going to have the flexibility to do this full time.