When it comes to mobile homes and mobile home investing, we consider John Fedro the guru of this industry. We interviewed him on our YouTube channel because we want you guys to hear his story, discover some pro tips, and feel inspired. So, who is John Fedro?
John Fedro’s First Sale
“I’m in my mid-thirties now. Born in New Hampshire originally. I graduated high school and then moved down to Florida. Soon after I moved down, I realized I was not a very good employee. So, I was looking for other things to do with my time and with the fire that I had inside me.”
John was doing different things at the time trying to earn money while figuring himself out in college. Eventually, he dropped out altogether because he caught the mobile home investing bug.
It started when he saw a binder of information about real estate investing that his buddy got from one of those late-night infomercials.
“I read through the book a couple of times. I’m like, I want to do this. And it was just like pie in the sky numbers, like ‘Get a house under contract for this much, clean it up and fix it. And you can make so much. And owner financing. But what’s owner financing?’ It was so awesome to me.”
He didn’t have a real estate background or anything of that nature. But by trying his luck with the mobile home parks in Tampa he bought his first home. This first mobile home is something he’s kept getting back to fix and flip many times over the years. How cool is that?
He says it’s okay to be nervous about the first sale. It can’t be any worse than how he felt when he was driving up to the house that first time.
“I was getting up to the home. I felt this wave of nausea coming up. I had Eminem’s music playing pretty loud at the time. ‘Cause I wanted to get pumped up. And I was confident until this flood of emotions took me over.”
He pulled over to the side of the road and threw up. He remembers looking into the rear-view mirror thinking it would be so easy to just go back home or make an excuse and come back tomorrow. But he didn’t. He made the appointment.
It was a four-bedroom, with two baths, at this pond. It needed a few repairs because it was about 20 years old, but it was beautiful. The seller said she wanted $8000 over the phone but John negotiated it down to $3000 and he didn’t even have $3000 on him at the time. He made a deal with her to give her $300 right away with 9 more payments of $300 due.
“And I don’t even know where I came up with that, sort of. Just, like I wanted to… I knew that we had to make a, you know, an agreement here.”
“I felt good. And I felt like I could help this person. And I did. And so that was the first mobile home I purchased. I sold it right away for payments. I believe the first time I sold it was for $27,000 with $2,500 down. And I forget the monthly payments, but that guy stayed in I think a year and a half.”
He says he would still get sick to his stomach even after that first sale because he felt like just this kid out in these mobile home parks telling these older people that he’s going to somehow help them. He felt like he didn’t know anything. But he kept learning, stayed in the trenches, and figured it out.
Words of wisdom after 16 years in the business
John was in Florida for over a decade before moving to Austin, Texas, where he operates from right now. 90% of his career success has been through dealing with mobile homes. And he eventually got into single-family homes, multi-family properties, long-term rentals, and so on.
With 16 years of experience, he’s seen a lot, sold a lot, and learned a lot. And he’s taught us a lot too.
“It’s going to take a lot of time even to get your first deal. Well, not a lot. Like 40, 50, or 60 hours of dedication – of hard work, you know? However fast you can cram that in. It’s going to take time. But I don’t think we could even debate on it, it’s clear that mobile homes are one of the more affordable ways to get into real estate.”
His advice is to manage your expectations while staying dedicated. Assume that you will not be able to quit your job for about two years or you might even have to bust your butt for five years. Just make sure to keep driving towards that goal and keep that determination alive.
You need to realize your time is valuable so follow the path of least resistance. Get clarity on your marketplace, make a plethora of offers, and then move forward strategically. Just one at a time.
John’s first couple of deals got closed after at least six months of trying. He used to go to real estate investor club meetings weekly. By the end of the first year, he had just over 14 deals, most of them closed and some were in the works.
But he noticed that there is a lingering stigma out there about mobile home investing, and that made him a little embarrassed about his career. He was young and he wanted to be flashy. He didn’t want to be ‘the mobile home guy’. He felt insecure about it like it wasn’t real property or real land. And that it wasn’t a big enough feather in his cap.
“It’s definitely the stigma of, you know, lower-income, trashy people, which is so ridiculous. And it’s easy for me to say because I might have some alternate agenda or something. But no, these people… there are good people in every sort of demographic. And we look for those good people. Like, we want to sell to good people. We want to have good renters, people that are quality people.”
Don’t get caught up in any kind of stigma. It’s all in people’s minds anyway. By being open and confident about his area of expertise he gave himself a chance. And then other people gave him a chance. He was surprised how many people at those real estate investor meetings supported his efforts by supplying leads.
Learning about people and getting to know people is a big part of this industry. John says one of his biggest takeaways from all of this is how it was a crash course on human nature.
“Everyone’s human and human nature is… you should protect yourself. We need to trust but verify. And so, it’s like that. It’s like the human nature aspect of working with contractors and renters.”
“So, I think just the crash course in dealing with people and I’ve gotten burned a bunch of times and it’s, I’m so glad and thankful that it was like, minimal enough to where it didn’t put me out of business or it didn’t make me want to, completely run away.”
He says it can be difficult sometimes because of competing interests between people like contractors, renters, tenants, buyers or sellers, realtors, and other investors that you deal with. If that makes you nervous and fearful just remember this. Questions are your friend.
Pro tips from John Fedro
Asking the right kind of questions is one of John’s top tips, and it is something that we will be teaching you here at Trailer Cash Academy.
“You should ask questions. Don’t feel rushed to jump into anything. Go slow now to go fast later.”
“If you’re scared about something, then you don’t know enough about it, or you don’t have enough clarity.”
“If you’re starting something brand new that no one’s done, okay, be a little tentative. There’re so many unknowns. But if you’re doing something that people have done, there’s a recipe out there. There are steps that you must go through from A to Z and there are things to look out for. There are pitfalls.”
“So, ask a lot of questions, talk to a lot of people. And if you don’t feel like… if you’re still nervous going into a deal, that’s a red flag or it’s at least a flag to have to bring some more people in and have like double or triple or quadruple check on what you’re thinking.”
Getting clarity from asking questions will help you catch the red flags. We asked John to tell us more about what he considers are red flags or deal-breakers.
“Like the home itself? If it was functionally obsolete, if it was in an area where there was a mass Exodus and people were leaving, or if it had chronic problems like there was just mold. Mold in one or two spots is manageable, but just throughout the home, I mean, that’s a chronic issue.”
“Try to stay away from something below 600 square feet. Try to stay away from a senior park when you’re just beginning. Try to stay away from anything too destroyed or a one-bedroom home. ‘Cause they sell the least. And there are fewer people that want one-bedrooms.”
Here’s another great tip he gave us: take people to lunch. But don’t just pick their brains. Make it meaningful and friendly.
“If you can, take those people out to lunch and ask them questions and develop relationships. Not pick their brains, nobody wants that, but ask them, make it a conversation. You know, if you’re going to really be in this business for a long time, these are the people that you want to know.”
Before we got off the call with John we made sure to ask him which markets are the hottest right now.
“Here’s the thing that makes it like a hot market. In most areas around the country, financing is difficult. It’s difficult to go to the bank and finance these homes.”
“There’s not a lot of people that want to buy a used mobile home in a park that has 20 grand laying around or 40 grand laying around. You know, they’re out there, but there’s not many of them.”
“That’s going to drive the demand for mobile homes up in those metropolitan areas and those areas where people want to be. In the coastal areas, people have money. Like some people have money. So, there are just more people with cash.”
“You might have to buy the home for more, but you can sell it for more, or you can sell it for a higher down payment or get cash easier. So, there are pros and cons. But to answer your question – definitely Metro areas. More so than like coastal areas.”
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