10 Reasons Why You Dont Have a Deal

INTRODUCTION:

In episode 42 of the MHP Show podcast, Derek Vickers addresses the common challenges hindering individuals from securing their first real estate deal. Drawing from personal experiences, Vickers provides insights into overcoming these obstacles and taking proactive steps towards success in mobile home park ownership.

KEY TAKEAWAYS:

• Mindset Mastery: Vickers emphasizes the importance of aligning beliefs with action, urging listeners to overcome negative mindsets and gain practical experience in real estate investment.

• Proactive Outreach: Highlighting the significance of making cold calls, Vickers encourages listeners to push past fear of rejection and engage actively in reaching out to potential deals.

• Understanding Investment Metrics: Vickers dispels misconceptions about investment metrics like cap rates, emphasizing the need for a comprehensive understanding and flexibility in evaluating opportunities.

• Embracing Partnership: Addressing hesitancy in partnering, Vickers underscores the benefits of collaboration and leveraging resources to navigate the complexities of mobile home park ownership.

CONCLUSION:

In conclusion, Derek Vickers urges listeners to challenge their beliefs, take proactive steps, and embrace partnership opportunities to overcome obstacles and achieve success in real estate investment. Tune in to the MHP Show podcast for more insights and practical advice on mobile home park operations and ownership.

WATCH IT IN YOUTUBE:

TRANSCRIPTION:

[Music]

00:06

everyone welcome back to the MHP Show podcast I'm your host Derek Vickers and on the MHP show we talk about anything and everything that has to do with mobile home parks operations crazy stories that happen crazy stuff that comes with owning mobile home parks and I'm here with you today with a solo episode The MHP show is on the road right now we are not in studio but we're still bringing you heat we're still bringing you some more fire episodes regarding mobile home parks and this one is not going to be any

00:41

different and before we do that I want you guys to go check out my master class webinar that I did and that's Derek vicks.com masterclass webinar take you through all the steps of how to buy and underwrite and take a look at your first MHP and have some confidence that you can actually send an offer to an owner all right So today we're going to get into the show so the show today is why you don't have a deal the reasons why you do not have a deal right now now I know there's a lot of people I get messages all the time what I need to

01:24

do to get my first deal how can I get my first deal I don't have any money blah blah blah well I'm going to give you the reasons and I'm probably going to get passionate about some of these I'm going to give you the reasons why you don't have a deal right now and I'm not evaluating you or your situation these are things that happened to me and why I didn't have my first deal at first and this actually stemmed back to 2015 when I was underwriting multif family when I could have actually

01:59

done a deal at that point but I didn't have the confidence and blah blah blah we're going to get into these reasons so um when I started looking at deals in 2015 all this stuff came up right and I've codified this now and these are the reasons I think I've got 10 reasons here but there actually maybe be more more of these that we'll get off into possibly so the number one reason why you don't have a deal right now and I guess this could go with the rest of them but number one is that your

02:34

beliefs are all up your beliefs are jacked up and I know I know Derek you're going all esoteric you're going all stuff on me here right now well maybe a little bit maybe a little bit but this is the number one reason your beliefs are jacked up dude like you think it's going to be hard like you got to get your mind right and unfortunately some of that mind rightness turn that into a noun some of that mind rightness that you need actually does come with experience and so it is easier said than done I will

03:20

agree with that and the other reasons I'm actually going to mention here probably actually stem to to number one but there's some that just attribute to sheer will and the willingness and ability to do things but that number one is that your beliefs are all jacked up you're like well how do you fix that well knowledge knowledge creates more confidence which then in turn creates more certainty so if you do that and you increase your knowledge about something you'll then gain more responsibility

03:55

over that area which then will give you more control over that area and will give you more confidence in that area how do you gain more knowledge well you listen to podcasts you read books but in addition to that you actually have to go out and look at deals you have to underwrite Deals you have to go on loot net and I get this all the time all all the deals on Lut net suck all the deals on Correy suck well that might be true could very well be true but that does not mean that you can't practice when I played basketball we

04:30

practice every freaking day I hated it it was never that fun but in order to get better we had to do that in order to get more cohesive as a team in order for you to become a better real estate investor you have to learn how to underwrite you got to learn what a good deal is and what a bad deal is and you're not going to do that unless you're going in driving deals your underwriting deals you're studying markets so that's how you're going to fix your beliefs like yes you could hum buug and

05:03

stare in a mirror and say that you're the best and you're the most confident in the world sure you could do that whether it helps or not I don't know maybe it does but you can't humbug that you're G to be an expert real estate investor and not read anything about real estate at some some point you got to start learning something you got to start freaking doing something all right so number one that's your your biggest one that your beliefs are all up all right number two and here's where I

05:33

might start getting a little passionate on this you don't make calls number two you do not make calls why you don't have your first deal I'm just gonna let you let it sit there for a second you're like Oh Derek you know cold oh my gosh cold calling is dead I saw some Guru on Facebook ad he said cold calling is dead and that that was my justification for not picking up the phone because you picked up the phone then one guy told you to off the second guy hung up on you and the third guy was nasty and then you see this ad and

06:16

you're like oh yeah now he's right cold calling sucks so now I have to regroup and I've got to go fix my data I got to get more data because the data sucks I got to do something else I got to send mailers I got to do some tricky texting method or I have to do this and use this program and this platform and all that is here we go all that is is that you justifying not making calls so the plain and simple fact that you don't have a deal is because you don't make enough calls this is the the people I see

06:56

getting deals our Acquisitions team we're finding deals all the freaking time they're making calls people in my program the ones that are getting deals they're the ones that are making freaking calls on a daily basis and the ones that aren't aren't right I don't give a how bad the list is I don't give a how bad the data is the person that makes 50 calls a day a 100 calls a day whatever the number is and the person that makes two and HS and Halls about the data and calls five numbers and they're all

07:30

disconnected numbers and they say oh my God all the data is wrong all the data is wrong you're never going to find a deal I mean it's just plain and simple so it's the action something yeah for sure oh I could go on and on about the calls but that is number two like you simply don't make calls you could suck you could not have a script you could at least just have some inkling of how to communicate with people people you could make calls you could make I don't know 50 100 calls a day you probably find something you

08:09

could find something there's no doubt in my mind if you actually get off your ass and get up and make calls and communicate with people this is also this is also for you know if you're like you have to call Brokers you have to call wholesalers you have to call any body and everybody that can give you access to Deals and you you may be scared to call the broker oh my god well he's gonna think I'm an idiot or she's gonna think I'm an idiot I don't have any deals it's fine call him anyways I mean who

08:45

cares who cares you're gonna have to start building trust and credibility somewhere down down the road so this could be a whole show we might make a whole show on this but number two reason is that you do not make calls or enough calls what's enough calls well as many as you can make I'm not giving you a number because then you be like Oh Derek vicker said I need to make 20 calls a day or 50 calls a day and now I don't have a deal yet and see you know this doesn't work so you need to make as many as you as you

09:21

can now you're gonna ask well how many calls did you make in the in the beginning Derek well I made um um I don't know how many I made I made as many as I could and some days I made more some days I made less but I made them when I could and my enthusiasm and my purpose was so big because I knew this is what I wanted to do I knew I wanted to get a deal so I started to pull in stuff right because I believe if you really have a deep desire and you have decided like hey I'm gonna buy a Mobile Home Park

10:00

you're going to pull in stuff you're going to pull in stuff that you need because that that fire and that certainty is going to do that number three reason you don't have a deal yet because you think you only you can only buy 12 caps right hey Derek interest rates are eight and a half n% so my inplace cap rate has to be an 11 cap or a 12 cap for it to makees sense you're not going to ever buy a deal I mean just stop I mean you can go in the middle nowhere where the population is a thousand you can do that

10:33

if you want you can probably about find a 12 cap maybe now I don't know but um guys I'm telling you like this this whole thing these old ideas of that you know you have to buy a 12 cap it doesn't freaking exist anymore why would you want to buy something in the middle of nowhere anyways it's going to be harder for you to exit that property I'm not going to buy it because you're like man you know I can buy it at 12 in the middle of nowhere I'm gonna sell it as an eight I've had people come into my

11:10

program like hey I found this deal it's a 12 cap and I'm gonna raise the rent 25 bucks and then five years down the road I'm gonna sell it at an eight cap and hey look I doubled the value you're not going to be able to sell that Park in an eight cap you're just not you're going to have to sell it at a 10 or 12 maybe even higher to get someone to go to that rural area you may agree with me you may disagree with me but you have to think about your exit when you get into these things now

11:40

you're like hey Derek if I'm making 18% cash flow or 15% cash flow or 12% cash flow um you know I'm GNA make my money back and then on the exit you know it'll be kind of a double well maybe maybe maybe not but you're going to have hard it's just going to be harder in a rural area we have went outside even the larger msas that we own parks in and everything's a little slower where the population is lower it's harder to sell homes it's harder to find good people it's harder to find contractors it's

12:16

harder to find everything right and it's going to be harder for you to find a buyer on the way out unless you sell it cheap enough like you're you're buying this middle and nowhere deal for like well I'm never going to buy anything because just five caps and Charlotte North Carolina is just five caps and Dallas Texas it's four caps yes and you can make those deals work right and you're like well how do you do that well there's many different ways that you can do that if you join my

12:48

program or um click on the master class we can talk about that right because if I buy something at a five I know I'm going to be able to sell it at a five at another low cap rate right and I like places where there's rent growth I like places where there's activity I like places to where I can up I can make a mistake but the location of the asset is going to save me if that happens we actually had that happen in in in a few of our assets where we the business plan for various reasons wasn't executed on like we had

13:24

initially thought oh who you know the plan didn't work right um it it it worked but it just didn't get executed on correctly and we're still gon to be okay in these deals because they're in phenomenal locations so if you're just going by this hey I'm going buy a 12 cap an in place 12 cap I mean if you find an in place 12 cap I'd love to see it um number four reason you don't think you can get a loan and why do you think that well I don't know I don't I don't know I

13:55

mean I thought that in the beginning because I'm like man I don't even even know if I can get a loan on a house I don't know if I can get a loan on whatever the credit card company wouldn't give me a credit card how am I going to get a loan from the bank well the bank if the asset is good and the asset has a 1.

14:18

3 and up debt um dscr then the bank is going to look at that and say hey look this is a good deal it covers the debt service it's a cash flowing deal there's room for upside that's the main part of the deal if you have a if you have a a deal that the debt service coverage ratio is 75 the banks never going to freaking do the deal anyways I mean maybe they will you may have to throw money in or there's ways around that but um if the deal is good it covers The Debt Service well the the bank's comfortable with

14:50

it right well you may say hey I don't have a balance sheet okay that's fine if you have a million dooll deal and you're putting 300 K down 700 Grand okay you have to have that net worth you can probably find somebody that has that net worth to help you or You' be surprised at what actually you can get with the income if you're a high income earner or if you're not I'm telling you if the deal is good you can find what you need I forget where it was that they said this example but it was something

15:25

to this effect like if you if you had a law Ferrari or Bugatti okay let's say you had a Bugatti you know it's a $1.5 million car you get an opportunity to say hey Derek this is a freaking brand new Bugatti it's you know zero miles on it no water dam no nothing right I'm gonna give it to you for a half a million bucks you just have to come and buy it in 10 days I'm not gonna give it to anybody else and you know that you can go resell that thing for 1.

15:57

5 or two million bucks you're going to find that and you're going to make that happen because if you come to me with something like that it doesn't have to be a car it could be like a really home run slam dunk deal it's going to be easy for you to find the money because you're going to be like oh my God like this is I can do this I'm gonna figure out how to get this to work with the bank and you'll do that okay number five this kind of coincides with number four number five is that you don't think you can raise the money to do it if you

16:27

don't have the money yourself now I'll say this because I've had this belief before all these are kind of beliefs and um man you would just be surprised you would be surprised that the people that they hate the stock market they've put their money in a 401k and all they've seen their 401ks going down in the last three or four years maybe some of them have gone up but there are people that are looking for alternative assets and if you love real estate like I do especially great assets great assets and great

17:11

locations I mean it the numbers are there real estate increases in value over time in multif family the value of multif Family Properties doubles every 10 years roughly give or take now with mobile home parks with this asset class being so undervalued it not as much these days but rents are still artificially low the average rent Nationwide is still way below where it should be so the uptick is even faster than multif family like I know just about in any park in America you can get 10% a year um increases which even

17:50

outpaces inflation now or at least what they what they tell us that inflation is so but if you have a great deal deal right and you can and your fair with what you're paying your investors you're going to go find a deal now I got pitched a deal the other day and they're just paying eight% now you some people may like that but you got to pay them 8% in some upside or however you want to structure that but I think for an investor to be enticed I think for an investor to say hey I need to tell my other friend

18:26

Johnny about this because this is freaking good like Derek is doing well like for me in this deal it's going to be easier for you to get money but my point if I don't skip around here is that there's people that have money that don't know what to do with it it's just sitting in the bank you could open your phone open your phone and look at your contacts just for your iPhone scroll all the way down I have 2719 contacts now however many you got I don't know I'll tell you I guarantee you

19:06

there's more money in that phone than than you think you just have to be willing to do that if you want to learn more about how to actually get this power base of investors going I'll put it in the in the show notes here you can download my um how to get the freaking money guide I'll teach you how to structure deals and it'll give you there's pages on this this ebook of how to get this um Power base started so you can start mining some investors all right all right number six I already talked about this a little

19:42

a little bit in number three but I'll just mention it again because it is that important and you think the cap rate needs to be four points or two points or three points um over the interest rate and I get it guys yes for the deal to to work for sure you're going to want that to be the case but the in place is different like if if if if the in place cap rates of five but you know you can go in and increase rents you know you can go in and en lighten expenses you know you can go in and Bill back for water and sewer you know there's tons of

20:15

management inefficiencies you may have to look at that like hey what is this deal going to do after we go in and execute on the business plan so after you execute on the business plan let's just say you did that in Year One and it was a 7.5 or an eight cap in year one and then by year five it's a it's a 10 cap or it's a 12 cap or even more than that this some of the deals that we're looking at in year five they're they're a 13 or 14 cap now would that be worth you buying this deal with a five

20:51

cap and then you're going to get the bump on the exit if it's a five cap and a great location as I talked about before but just because it's not a 10 cap in year one doesn't mean it's not a good deal does not mean it's not a good deal now this sort of coincides with this one too you listen and and get outdated real estate data sure 15 years ago you could go buy a mobile home park at a 15 cap and you're just not gonna be able to do that now it's just not going to happen at least in a good location I'm not

21:32

gonna I'm not GNA harp on that um number eight here so here's one because you think Park owned homes are a bad thing I don't even I I I don't even want to share this with you you think Park own homes are a bad thing because there's a lot of deals out there now and a lot of them come with Park on homes as soon as you hear Park on homes you're like oh it I'm not buying this one because Park owned homes are terrible it's heresy to buy Park owned homes all the deals we bought have been Park owned

22:08

and then we've converted them over to tened Owned yes that's the goal and you want to do that but if you're getting in your first deal and you're still in capital multiplication mode you're going to want to you know you're gonna want you're gonna have to do some value ad I mean it's just the way it is you're you're not going to be able to buy you're not going to be able to buy the you know super stabilized stuff because then we get into the cap rate thing again you're gonna have to buy

22:48

something with some hair on it you're gonna have to go in and roll your sleeves up and make this deal work you're just going to have to do it because Park own homes if you do it right if you've listened to some of my webinars some of my master classes and I explain this and talk about this you can get these insane jumps in value really really fast here's an example there's Park we bought a two Park portfolio from a mom and pop owner we bought it for 4.

23:27

15 million 103 Park owned homes it was a mess it was Private utilities it checked all the boxes for parks that you do not buy the density was terrible but we went in and converted these um Park owned homes and you're not even going to believe these numbers so we closed on this park in May of 2021 we executed on the refi in March of 2022 this property reappraised for 11.

24:00

5 million and you're like how is that possible in this deal only the in place was like a two and a half cap like all the you know the boxes that it's supposed to check it did not check those and every on every list of hey do not buy this kind of mobile home park or do not buy this this one check those boxes but look how much value was there was there yes we had some issues with that deal but it's a cash flowing asset now and it's very stable and it's in a stupid location like you'll never be able to

24:36

build this again you'll never be able to get a chance to get a two parks in this location again so it was all Park owned homes now would you buy Park owned homes and do them the right way in order to get a 3X jumping value our investors it was a 3.87 multiple on Capital so investor puts in a million bucks it turned into um uh 3.

25:07

8 you think they'd be calling back to give you more money yeah probably so look seven and uh seven and eight or sort of the same outdated data and you think Parker and homes are are are a bad thing number nine here and this is something I struggled with the beginning to and all these I struggled with trust me D like I'm not perfect you want to own the park 100% yourself you want to own it 100% yourself and I get it when I started I was like hey I'm getting this bonus for my insurance company I'll have this much money I've got you know 50 100 Grand I

25:52

can buy a $300,000 Park I didn't think about the closing cost I didn't think about the capex if I would have did that I might have one park right now or two parks right now maybe more but if you think that you have to own it yourself like would you rather own one I mean how many times have we heard this would you rather own a 100% of a million dollars would you rather own two% of a billion dollar like it's it's dumb right this one this one this one you know don't be so selfish man you know

26:30

get some investors bring some people on bring on partners because once you if you just want to buy one Park maybe you can do that yourself you may still need to bring a partner and look if you're doing deals with the bank the bank's your freaking partner anyways you're never going to Own 100% of it because the bank the bank the bank's in the deal the government makes you pay property taxes you're never gonna Own 100% of the deal really so just get over that right get get over that because

26:59

it's not going to happen if you really want to scale you're never going to Own 100% of it you know the big reads I do know some buyers that that have been around a while that probably own most 100% of theirs but still they have people in on their teams that are helping them and um things like that so I wouldn't worry about that I mean if you have a 100 Grand to buy to buy a deal you know you're not going to get much right now and um you know if you have 20 people that have 100 and there you go you can start

27:29

buying some stuff um number 10 this is a this is a this is a concatenation I think that's a I think that's a word hold on a second concat yeah concatenation I think I use this right I use this I use a big LinkedIn word here uh a series of interconnected things so I guess that no that's that's not the right definition anyways who cares um so this last one here or no I got the word I'm looking for yes and amalgamation which means the action process of resulting of combining or uniting this is definitely a LinkedIn

28:27

word here um this last one is an amalgamation for the other ones you're being a little that's the last one you're being a little you're not making calls you don't make calls your beliefs are jacked up you're coming up with all these reasons not to do it and I've done these things before I should have had a park two months and for me searching for one but I was being a little I wouldn't put a deal under contract I wouldn't send an Loi because I thought it obligated me to something but look if

29:08

the deal is good put send out an Loi put it under contract if it's a great deal you're GNA figure out that deal and if it's not a great deal well I mean just because you put something under contract or send out an Li doesn't obligate you to buy it if you're like man want this deal and then you go in and find out there's a million dooll wastewater treatment plan issue well then you don't you don't have to buy that deal you don't have to buy that deal you don't have to buy that deal so

29:45

you're not obligated to do that now one thing I do hate you don't want to be the person that's just putting under contract and hopes to retrade people or to just get it under contract you want to be a serious buyer we've only backed out on one deal ever when I put a deal under contract I know I'm getting that bad boy unless there's something wrong right and I'm going to retrade if something is wrong if there's an issue if there's a boundary issue a survey issue if there's a zoning issue a

30:15

flood zone issue if there's a infrastructure utility issue yeah I may back out or ask for a discount we actually bought a deal where we found that there was you know a pretty big infrastructure issue turned out not to be that bad but we were going to go back and retrade but we wanted to this was a great seller and we just like look we're going to go in and pay this is what we decided to pay we're not going to do that but number 10 uh before I get off here but you're being a little and quit being a little set

30:44

your time every day pick up the phone call wholesalers call Brokers call your list I don't give a how bad the list is call your list and things will happen all right so if you want to learn more about this you can watch the other episodes of the MHP Show podcast I'm on YouTube uh you can check it out I post stuff every day you can check out the master class um that I did um and the ebook I'll put all this in the uh in the show notes here and if look if you want to partner on a deal I'd love to partner

31:23

with you send me a message send me a deal if it's a good deal we can figure out how to make it happen um and then also if you want Direct mentorship by me I can come in and partner with you and help you buy your first Park and help you every step of the way you know we can put that in there you can reach reach me at um reach me at my email or shoot me a DM and we can set up a call um yeah so look guys number 10 is the most important don't be a little and I will see you guys next week on the MHP show we have some

32:01

really cool stuff coming um some more shows some deal underwriting shows we're going to be doing it's going to be live where people can call in uh we're gonna have a freaking blast doing this um if there's any guests that you want me to get on the show or is there anything that you want me to talk about send me a DM send me a an X I was going to say tweet whatever um and then we'll do that you can also jump on our Facebook group it's um Mobile Home Park investing Pros we're really growing that now I think we're

32:35

our our members have have increased because we give a ton of value on that um in that Facebook group all right and so I will see you guys next week I appreciate you watching and tuning in to the MHP show send me a message hey on iTunes you can like And subscribe um please leave me a comment come on man all right I'll see you guys [Music] bye

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