From Burnt Out Landlord To Real Estate Investor: How I Sold My Portfolio And Invested In Mobile Homes [$120K/Year]
Hello! Who are you and what business did you start?
My name is Rachel Hernandez and I’m the founder of Adventures in Mobile Homes. I started the website to share my stories and experiences in mobile home investing.
I buy and sell mobile homes for cash flow to create passive income so I can do the kinds of things I want to do, and not have to do. I buy these homes for cash and offer them to end buyers who pay me in payments over some time to pay off the homes in the future.
Essentially, I am buying time with each deal that I do and the cash flow I receive. Usually, I make around $500 cash flow per month for each deal that I do.
As a sub-niche within real estate investing, there’s less competition in mobile home investing as compared to other asset classes in real estate. Overall, it has been a very profitable and rewarding business.
What's your backstory and how did you come up with the idea?
With a background as a full-time real estate investor buying, selling, and holding single-family homes, I became a burnt-out landlord. So, I decided to sell my entire real estate portfolio and start again from scratch. This is where my mobile home investing journey began.
I read the book Deals on Wheels by Lonnie Scruggs which is one of the top 10 mobile home investing books. After reading his book, I decided to follow his system of buying and selling mobile homes for cash flow.
What sparked my interest in his system was the fact that I would no longer be a landlord as a seller of mobile homes. Instead, I’d be the bank, meaning I would offer up these homes on payments to end buyers who would essentially be responsible for fixing up their homes and making payments to me.
All the money from the cash flow comes to me. Plus, I do not have a mortgage on any of these homes since I paid for them using all cash. These factors all made mobile home investing an attractive system and method of achieving passive income in my eyes.
Tell Us About Your First Sale As Mobile Home Seller
It took me almost a year to find and buy my first mobile home deal. It wasn’t easy and involved a lot of time and market research.
After the initial phase of my research, I soon began looking for opportunities to buy mobile homes in these types of communities. And, I finally found and negotiated my first deal.
It was a 2 bedroom, 1 bath mobile home located in a mobile home community. The family selling the home had been living there for close to 10 years. They were ready to move out of the community and just wanted to sell their home.
This family found me through a flyer I passed out in the neighborhood. There was no “For Sale” sign on the home. No one even knew it was for sale. I spoke to the seller on the phone who called me one day out of the blue. They wanted me to come to their home and negotiate a deal. Though, they did not give me a price over the phone.
When things don’t go your way, you need to be prepared mentally to push forward despite the obstacles. Never give up. Know your “why” first and the “how-to” will come later with time and experience.
So, I went to their home to check it out. After a few trips back and forth, I negotiated a deal. I bought the home for $3600 cash. There were no major repairs needed. It was in move-in-ready condition. Plus, the sellers even cleaned it for me.
After the sellers moved out, I found a nice family for the home. I sold the home for $10,000. They paid me $1000 to move into the home and paid me $250 per month for the next 4.5 years. I received my initial investment back during the first year.
This was my first deal. And the most memorable.
Describe the process of launching the business.
To become a successful real estate investor, it’s important to learn and study the market beforehand. This is where a lot of beginner investors fail. When opportunities come their way, they do not know the values which cause them to waste time researching and/or not taking any action at all.
To learn my market, I visited close to 200 mobile home parks in my area. I spoke and met with many people such as park managers, owners, sellers, mobile home dealerships, and residents of these communities to name a few. Yes, it took time and a lot of driving on my part. Though, it was worth it in the end.
What I gained were knowledge and experience. Sure, I didn’t buy anything during this period of conducting market research. But, I came out ahead. As mentioned, it took me almost a year to find and buy my first mobile home deal.
As for funding my mobile home deals, I had built up $200,000 in cash by selling my entire portfolio of single-family homes. Mobile home investing was my ticket to creating passive income to achieve the lifestyle I’ve always wanted which gave me the time to do the types of things I want to do, and not have to do. And it worked.
The biggest lesson I learned from the process of starting my mobile home investing business was that it’s not going to be perfect. As an entrepreneur, you have to learn how to adjust accordingly. Not everything is going to go as planned.
When things don’t go your way, you need to be prepared mentally to push forward despite the obstacles. Never give up. Know your “why” first and the “how-to” will come later with time and experience.
Since launch, what has worked to attract and retain customers?
Since I have a background as a sales executive doing business-to-business sales for Fortune 500 corporations, networking has been the best use of my time to attract and retain customers.
What’s worked for me:
As a mobile home investor, I network with several mobile home park managers and owners, mobile home dealerships, other real estate investors and contractors in the business to name a few. By building rapport and maintaining relationships, I’ve been able to create a steady stream of leads to acquire customers for my own mobile home investing business.
Regarding networking, I do everything in person. This means me driving to the business location of who I want to meet. From there, I do a short introduction and try to build rapport on the spot. For reference, I leave my business card. Then follow up regularly.
This has been my networking formula for my entire real estate investing career. It’s worked to build relationships and provide more opportunities for my business in the future.
When it comes down to it, build your business around you and your personality. Not the other way around. If you can do this as an entrepreneur, then you’re one step ahead of the rest and you’ll eventually find success.
What hasn’t worked for me:
In the past, I tried other types of marketing methods such as direct mail and making blind offers to find and acquire customers. Unfortunately, these marketing methods did not allow me to get in front of these customers face-to-face. Through experience, I learned it was not the best use of my time.
At one point, I did try to use Craigslist to find sellers and buyers for my mobile home investing business. I posted ads on the site. I spent too much time talking to people who were not serious about buying or selling their homes.
So I focused more on marketing in local communities where I did business which proved to be more effective. Networking and talking to people naturally work for me due to my background and personality.
How are you doing today and what does the future look like?
Since I’ve built up my mobile home investing business with passive income coming in every month, I find myself with more free time to work on other projects.
As mentioned, it took me almost a year to find and buy my first mobile home deal. I received a 100% cash-on-cash return on my money for that first year. I continued to do similar deals in the second year which produced comparable results.
However, I also did larger deals which required more money out of pocket but more cash flow. By the third year, I had built up my business to receive $3000 per month. In the fifth year, I had $5000 monthly in cash flow. This is where my business started to take off to acquire more properties at a faster rate which has allowed me to achieve $10,000 per month from the business today.
I continue to run Adventures in Mobile Homes. I’ve added a podcast to further document and share my knowledge and experience with the world.
As for my mobile home investing business, I continue to stay in touch with my network and evaluate new investment opportunities that come my way. In the future, I’d like to buy land and move mobile homes onto the land to create more passive income streams for my business which will double my income and produce twice as much cash flow. I plan to sell both the mobile home and the land to receive income from both.
As for marketing the business, I’ll continue to tap into my local network of mobile home parks and dealerships. Though, I plan to look into using Facebook Marketplace as a way to find buyers and sellers for my planned mobile home on-land business.
This is something that I’ve been wanting to do for a long time. I just need to find the right opportunity to do it.
Through starting the business, have you learned anything particularly helpful or advantageous?
In the beginning, it’s very important to follow a successful system that models what you want to do. For me, it was following Lonnie Scruggs’ system of buying and selling mobile homes for cash flow.
Through experience, you’ll learn what works and what does not work based on your personality and the way you prefer to do business. This is what I learned by following his system. Some things worked for me and others that did not.
For example, some marketing techniques worked for me like networking and talking to park managers when I first started as a mobile home investor. Though, some did not work for me like direct mail and sending postcards to mobile homeowners.
Unfortunately, this technique did not work with my personality since I don’t like administrative work. I’m more of a talker and prefer to be out in the field meeting people rather than working in an office all day.
I learned this lesson through trial and error. We’re all different as people and have our strengths and weaknesses. Just because one technique works for someone else, does not mean it will work for you. And vice versa.
One thing I learned from Lonnie Scruggs that worked for him but did not work for me was selling the homes I had on the market in “as-is” condition. Though Lonnie was able to do it successfully, I found not fixing up homes attracted more of a lower-end type of clientele.
In turn, these types of people tended to negotiate more on price and the homes sat longer. Through experience, I learned to purchase homes that had cosmetic issues. In the beginning, I did most of the cleaning and painting of the homes on the inside. I hired a handyman contractor for small jobs such as repairing minor issues and carpentry work.
For the flooring, I had the carpet steam cleaned which produced good results. Just doing a little clean-up here and there helped to sell and move these homes much quicker than trying to sell them in “as-is” condition as Lonnie did.
The system is there to guide you and give you a foundation. Though over time and with experience, you’ll learn to adjust to get the results you want.
What platform/tools do you use for your business?
The main tool I use for my mobile home investing business is my smartphone. Right now, I use a Google Pixel 6 for my communication needs. Since I network a lot, I’m always meeting and talking with new people. One of the things I heavily use is Google Photos which is helpful when evaluating homes and working with contractors who fix up the homes I put on the market.
Regarding my phone, I have a Google Voice number set up to make communication easier. I use and enjoy the text feature when using it to text people I meet and others in my network for my business. What I like about the text feature is the ability to text using your desktop or laptop from anywhere. If I’m at my home office, then I’ll usually use my computer to send and reply to texts including attaching any pictures if necessary. Great feature and option!
As for social media, I do not use it for my business. I do not have a website either. Everything that I do is local. I communicate with the contacts I make via phone, text, and email.
What have been the most influential books, podcasts, or other resources?
Aside from Deals on Wheels by Lonnie Scruggs, the most influential books for me have been Rich Dad, Poor Dad by Robert Kiyosaki and The Richest Man In Babylon by George S. Clason.
I was inspired by Rich Dad Poor Dad because they taught me a different way of looking at income. Before reading the book, I only knew one type of income: earned income. Though, this type of income depends on me working for it. Reading Kiyosaki’s book taught me the concept of passive income, meaning I do not need to be there to earn it. As an entrepreneur, this was a game-changer for me which gave me the motivation to start my real estate investing journey.
On the other hand, I learned about how to be a business owner and hire the right people from The Richest Man In Babylon. From that book, I learned that it’s very important to hire people who are experts and have experience in the job you’re hiring.
For example, you don’t hire a bricklayer to build a wooden house. In this case, you need to work with someone experienced in building houses and working with wood like a carpenter. This was a very important lesson I learned which helped me and eventually, I applied to my own mobile home investing business.
These books are valuable to me because of the lessons I learned. Had I not read these books, I may have learned the hard way and not have achieved the level of success that I have today. I can honestly say these books were eye-openers and helped to propel my real estate investing business much faster.
Advice for other entrepreneurs who want to get started or are just starting out?
For anyone just starting, it’s important to know yourself first. Know your strengths and your weaknesses. Focus on your strengths. Find others to help you make up for your weaknesses.
One of the mistakes I made when I first started out as an entrepreneur was not getting to know myself first. For me, my strengths are networking and talking with people. It’s just part of my personality as an extrovert.
Unfortunately, I did things at the beginning that did not work for my personality. For example, I did a lot of direct mail and admin work which I did not enjoy since I do not like to be in the office all day. Once I started focusing on my strengths and doing things that I’m good at (like networking and talking to people), this is when my business started to take off and things started to happen.
When it comes down to it, build your business around you and your personality. Not the other way around. If you can do this as an entrepreneur, then you’re one step ahead of the rest and you’ll eventually find success.
Where can we go to learn more?
If you have any questions or comments, drop a comment below!
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