First and foremost, I would suggest buying your first deal within a few hours’ drive from where you are. This is for a few reasons. Firstly, if you are investing in a property that requires a lot of work or is in need of heavy value-add, you want to be close by so that you can be there when things go wrong.
For example, if you buy a property that needs a lot of CapEx, you want to be able to check in on the progress of the renovations and make sure that everything is going according to plan. If you are too far away, it can be difficult to manage the project effectively and ensure that everything is on track. Trust me, you NEED to be able to keep up with your contractors at first until you develop and good system to do so. You also need to micromanage them more until you find the right one.
Secondly, by buying a property within a few hours’ drive from where you are, you can also be there if you need to be. Situations: Code enforcement visit, health department visit, permitting inspections, etc. I have found that doing these things yourself in the beginning is vital if you want to learn and understand the ins and outs of operations. I have also found that if you meet these government entities on site, you can build more rapport with them, which will help you now and with future issues down the road.
Lastly, learning the ins and out of this business requires you to be present on site. The nuances of property management and the nuances of this particular asset class cannot necessarily be taught on a podcast or through a book. Experience and practical learning bring it all together. You will be better equipped to scale your portfolio if you have done the dirty work yourself and understand what needs to be done. Creating a system around each process will be easier if you have had to scratch and claw through the process yourself.
Now, I understand that some people do not follow this advice and choose to buy properties all over the place, and that’s okay too. There are plenty of successful MHP investors who invest in parks all over the country. However, for your first deal, I would strongly suggest getting something close to home.
Investing in MHPs can be a very rewarding experience, but it can also be a VERY challenging one. By buying your first deal close to home, you can minimize some of the risks and challenges associated with investing in MHPs. Besides, what better way to learn than to get kicked in the teeth yourself!!
Vicktory Real Estate Group