Posted by Dr B(OH) on December 02, 2008 at 18:01:07:
Life is a journey, not a race to a destination.
Steve
Traits that lead to longevity as investors - Posted by Shawn Sisco
Posted by Shawn Sisco on November 29, 2008 at 15:13:20:
I read this piece posted on mr.landlord and it got me thinking -I had the pleasure of meeting Dave Ramsey in person when he spoke in Cincinnati about a year ago. We spoke breifly of real estate and he made a comment I will never forget: “The only investors I have known to make it in the business for longer than 15 years were the ones with at least 50% equity”.
To me this really underscores the importatnce of buying right. But beyond that, I imagine that the multitude of decisions in operations of MHP made by investors are predictably different based on their level of equity.
I really enjoy searching the archieves on this site, and I believe they help me make better decisions. I especially enjoy reading those posts from 7+ years ago by John Hyre, Tony C, Karl K,Lonnie and others, they seem to be demonstrating long term business sustainability; but I can’t help but wonder about all those who were quite active posters and have since stopped. For some of the old-timers on this board, what common traits do you recognize to those who succeed long term? and those who fail after some initial success?
Re: Traits that lead to longevity as investors - Posted by Tony Colella
Posted by Tony Colella on December 12, 2008 at 07:08:37:
Off the top of my head I would say that there have been several factors that have kept myself and others in this game.
Not doing this in a vacuum is the biggest factor that comes to mind. By this I mean attending MOM type meetings, workshops, conventions and yes, even boot camps. Reading and posting daily keeps us in touch with what we have done and what we have yet to encounter.
This is a unique niche and not one that everyone in society understands. We need to have a sounding board of like-minded folks to share our frustrations and to give us ideas on how to overcome them as well as take advantage of opportunities.
Networking is as much about learning as it is about deal making. Reading and posting here for over 10 years has kept my mind on topic and the face-to-face events have created motivation and friendships that continue to grow each year.
Trust me, all of us face obstacles, frustrations, pains and victories. If I did not have others who understood these facts and circumstances, I do not know if I could have remained as active as I have been.
Teaching others has been the best motivational factor for me. Posting answers and suggestions here often reminds me of small details I know but may not have done recently that can benefit my business as well as theirs. Seeing others succeed is the greatest motivation I have found.
Passion. You have to find passion in your life and if owning your own business is your passion then look deeper and for many here the mobile home investment business became our passion. That passion and commitment carried us over the beginning nervousness and hurdles and now helps us to hold the course.
Trust me, there are many times when I lose my passion for this game but the posts, stories, networking and friendship keep me putting one foot in front of the other. I do believe that there will come a day for me that I will â??burn outâ?? just like Lonnie did after 20 years of land lording but I too hope that like Lonnie, I can then find my next level of passion and continue to enjoy this game and help others to do the same.
Inspiration comes in many forms here. The learning is what keeps me going because let’s face it, if we don’t continue to grow our minds then we begin to die in this business or any other. We all face the “its just a job” feeling if we stop growing. Investing and land lording are jobs in which you face a lot of risks. Most we can limit or control but that does not mean they don’t frustrate or concern us!
I can’t tell you how many times I have had to call Scott, Karl, Lonnie, Lin and many, many others here, to say “CAN YOU BELIEVE…”
Maybe it was a bad tenant, an outrageous repair bill, an unforeseen expense or an unfair zoning or law change. If I could not vent I would explode. Venting to those who have “been there, done that” helps me to realize that I can vent and then get back to work making my business work.
We face new challenges in this economy and I admit that for some time now I have felt that the economy is going much further south than the media and government have been willing to admit.
These new macro economic factors are going to affect how we all continue in our businesses. This is new territory here. Until now we have all focused on our individual businesses, employing the models we have been taught here and at other similar sites. But none of those have focused on the macro economy, only the micro. I believe that to continue our successful longevity we must educate ourselves on the macro economic climate and adjust our micro businesses accordingly. Again, this is new territory and one in which we as individuals have little control over. That is why it is so important to re-educate ourselves.
Tony
Re: Traits that lead to longevity as investors - Posted by Steve-WA
Posted by Steve-WA on December 02, 2008 at 15:12:38:
“Traits that lead to longevity”. . . hmmmmm
I, like Anne, needed to ruminate on this a bit. In these times of economic tightness, I believe that this thread is very appropriate. It gives those of us with a little time in the game an opportunity for self-evaluation.
In my opinion, some of the key traits to longevity as an investor are a lot of those same traits that it takes to just get the ball rolling: persistence, focus, attention to detail, and continuing our education. To persist or to grow as an investor, we need to do all we can to: a) fine-tune our practices and our business models, b) determine what level, if any, of change is necessary for our business model to continue to be viable, and c) evaluate possible other, diverse business models and what it will take to get there.
One of the things I see often with people who stick with this community for awhile is a gravitation toward aspects of the MH asset class that better helps them to meet their goals. Some people are very successful at starting with Lonnie Deals, and just sticking with them because of their great success toward their particular goals. Others parlay their LD experience into park ownership, landlording, multis, or even peripheral businesses, like self-storage. I tis different with every market, and with every person because we all have our own goals.
Part of the reason I am no longer as active on the board echoes what Anne said, a lot of the same material and questions. Additionally, I spend more of my daylight time working the business, and evenings with my family; most of the traffic on the board occurs during people’s day jobs (been there, definitely done that!) I know that many “old-timers” keep in touch through other means, and that many of them still at least read this board frequently.
Re: Traits that lead to longevity as investors - Posted by Anne_ND
Posted by Anne_ND on December 02, 2008 at 05:39:08:
I had to think about this question for a few days.
I think one first needs to define success. In my mind, it’s reaching the point where you no longer have to keep feeding the machine. You could stop tomorrow and just keep cashing the checks for the rest of your life; hire someone to do the crappy stuff and take off for 6 to 12 months without looking back. This successful person does deals because they enjoy the hunt. I personally know about 4 people who have reached this level.
Common denominators for these people is a good understanding of finance, although not necessarily a college education. They also have remarkable discipline, a sense of honor, and enjoy people. And in each case, these individuals have some passion for something other than real estate- it might be a hobby, it might be a sport, but it’s something active that really engages them.
Thanks for an interesting question. Not enough interesting questions is the reason I don’t post here very much anymore, although I check in several times a day.
Anne
Re: Traits that lead to longevity as investors - Posted by Mike barlow
Posted by Mike barlow on November 30, 2008 at 11:41:46:
Every apartment building that I leveraged in the late 80’s and 90’s with
15% down, 10% owner carry and 75% bank loan I lost when the market
went south in the mid 90’s. We bought our MHP after several attempts
to walk away from the deal with a small down but it was an absolute
steal with owner carry and a little cash flow, low rents with 50%
occupancy at closing. That one deal my wife really wanted to do more
than me has kept us in the business now for 18 years.
Re: Traits that lead to longevity (Long) - Posted by Lin (NC)
Posted by Lin (NC) on November 30, 2008 at 07:55:22:
Thanks for starting a thread like this, Shawn. I think discussions like these are critical for those of us who have moved beyond how to fill out paperwork, what entities to use, and who to speak to about lost titles.
2002 was a great year; the content is fantastic â?? full of lots of theoretical and philosophical discussions. I was a daily reader / infrequent poster on the boards back then, and had just done my first Lonnie deals. First, Iâ??m absolutely certain that a presence on the boards as a poster is not indicative of a personâ??s being active in the business. There are a lot of words with no substance from some people, and then there are also the investors who become too busy working their business to post like they once did. I think people phase in and out of participating for personal, business, and other reasons. There are times when the dynamics are fantastic and you have a lot of activity, great posters, and great discussions. 7 years ago is a perfect example of this type of dynamic, on both the MH and the main board. Anyway, this is the long-winded way of saying that just because someone is no longer posting doesnâ??t mean theyâ??re out of the RE game. Iâ??m probably stating the obvious here, but thought it was worth mentioning.
One of the requirements of longevity is a game plan and measurable goals that are short term, medium, and long term. I can honestly say that one of the reasons Iâ??ve made little progress in the last 10 months is that I have failed to set new goals (long term goals, in particular) that reflect my current situation and the current economic climate. For me, it probably comes down to putting off choosing to really super-size my business and commit to hiring more employees, creating management systems and processes, and build a buying machine to increase the total dollars coming in, or stay smaller and be hands-on in order to capture more of the cash thatâ??s already there. There are examples of successful long-term investors who have done both and they both started here in our very community. Steve Case and Tony Colella are examples of the two paths.
Also important is a willingness to change your game plan when you find yourself in a rut and not making the kind of progress your plan calls for. I have been criticized my whole life for jumping tracks frequently. This adaptability is one way to survive, and leads to some diversification that can be beneficial, but can also pull you in too many directions. The other way is to entrench yourself and take a very systematic approach to the business, much like a scientist conducts research, tweaking this variable and that to find out what is working in the market today. The drawback of that approach is that often you can’t see the forest for the trees and can get killed when the market conditions change wildly. Which way an investor chooses to proceed is probably very much about personality type.
Using Lonnie as an example, the ideal is probably a methodical, goal-driven combination of specialization and expansion (expansion could be transition to a new niche or just growing the current business) as new opportunities present themselves. Using the same core knowledge is essential to this process. Thatâ??s why Iâ??m such a fan of Lonnie deals as a way for beginners to learn about the RE business. They teach a new investor about finding and negotiating deals, the time value of money/ how to use a financial calculator, creating notes, managing people and their notes (to name a only a few) all on a manageable scale. Theyâ??re very low risk and have a nice cash flow and skill development payoff.
I do have more to say about this topic, but hopefully I can chime in and add to othersâ?? posts. Iâ??ve made this too long already!
Lin
Re: Traits that lead to longevity as investors - Posted by Shawn Sisco
Posted by Shawn Sisco on December 12, 2008 at 09:05:16:
Great post Tony, while we (post WWII born Americans)have not faced these macro economic conditions before; There is no new thing under the sun. I have found myself much more interested in history (economic)lately and trying to gain perspective as to what comes next.
well said - Posted by Steve-WA
Posted by Steve-WA on December 12, 2008 at 08:48:27:
you mean, it’s not just me???
you get better and better at telling the story as time goes by, my friend.
Re: Traits that lead to longevity as investors - Posted by Rolf
Posted by Rolf on December 01, 2008 at 06:18:58:
Mike,
Just curious for more details.
How big is your park?
What did you do to increase cash flow?
How long before you started to see some decent money coming out of
it?
How much time do you put into managing it now compared to when
you bought it?
Thanks.
Rolf
Wheat Hill MHC
Re: Traits that lead to longevity as investors - Posted by Mike Barlow
Posted by Mike Barlow on December 01, 2008 at 11:57:45:
Just curious for more details.
Hi Rolf,
This is not going to be much help. Iâ??ve read most of your post and you
are doing all the right things that you can to improve your situation.
How big is your park? 50
What did you do to increase cash flow? Our town has seen a population
growth and we could just raise the rents along with the rest of the
market From $140 to $375 over 17 years.
How long before you started to see some decent money coming out of
it? About 6 or 7 years.
How much time do you put into managing it now compared to when
you bought it? From many hours per week to now very few hours per
week.
Re: Traits that lead to longevity as investors - Posted by Rolf
Posted by Rolf on December 01, 2008 at 14:49:28:
Sigh:-(
I keep hoping to find some sort of “magic bullet” to speed up this
process but, alas, there does not seem to be one.
Thanks for the info and I did find it useful.
Rolf
Wheat Hill