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Today we continue on our real estate theme with Jon Fedro from mobilehomeinvesting.net. Jon, you're going to teach us how to get rich in no time, right? That is not what I promised, but I will teach you a lot of good stuff. So you work in this little real estate niche of mobile home investing.

How did you wind up with this area of focus? You know, it is so weird how life turns out right now. I never lived in a mobile home, never grew up in a mobile home, didn't even know they existed. Well, I knew they existed, I suppose, before I purchased my first one, but I really failed.

I didn't want mobile homes. I fighted that mobile home name like I'm the mobile home go-to guy in the area because that was embarrassing. Until I saw the money coming in and the need that we're filling, the demand that there really, really is. So yeah, it definitely took a while, but I fell into it.

I failed from single-family homes is the very, very short version. How do you mean? Tell us the story of your growth as a real estate investor. Yeah, I picked up a book from my roommate's wall or his book collection of, it was Ron LeGrand, I believe, at the time.

Ron LeGrand, like three seminar things, and I looked through all of them. It was just, you know, real estate deals, pie-in-the-sky numbers. I'm like, I can do this. This is amazing. So, you know, this was like the heat of the market in Florida back in the very early 2000s.

So, I mean, anybody could make money just cleaning a window and reselling the home, but I couldn't. I was too, I mean, I wasn't too anything, but I was very young. I was insecure, unsecure of what I was doing. Drove a terrible car, didn't, yeah, just I lived with my parents.

So, but I was, for me, I was a go-getter. I did have a lot of fire and I was knocking on doors. I was trying to help people. I was making a number of offers, doing the things that I really had learned in the book. I had a life savings of $3,000 at the time and that dwindled down over the course of, like I said, about three months.

Just trying to knock on doors, bang on, you know, mail people. So, anyway, I didn't get any deals all that time. And then my first deal was this mobile home in a park for eight grand was the asking price. And I didn't even know it was a mobile home.

I was so green that I didn't even ask that. And I just got a call and like from my bandit sign and I'm like, oh my God, $8,000 for this home. Are you kidding me? This is amazing. So, I went there and I saw it was a mobile home.

I'm like, what is this? I don't know what I'm doing. And I was actually so nervous at the time because I could hear the desperation in this woman's voice, which was so weird to me. Because that's something I've never heard up until that point. So, I knew this was a very motivated seller.

And I was so nervous right before I pulled up to the, in the driveway of the home, I had to pull to the side of the road in this mobile home park. I was going to say trailer park and that's a definite, that's a no, no. And I got sick.

I threw up and I purged on the side of the road. Just because I was so just flooded with emotions and scared. And even right now I have goosebumps as I'm telling this story. And I remember pulling down that visor mirror and just looking at myself like, do I keep going?

I'm already scared. Like this could be a good excuse just to put my tail between my legs and postpone the meeting. But I didn't. I went there. Who knows how my breath was smelling. But I got the deal, $3,000. I talked, negotiated for $3,000 with, remember I didn't have any money.

So, well I was working two part-time jobs, but very paycheck to paycheck. So, $3,000 total price, payable as $300 down and $300 a month for nine more months. So, you know, zero interest. So, that opened my eyes. And this was a four bedroom, two bath, gorgeous double wide that I would have lived in at the time.

And it was nice central heat and air, all the appliances. The first time I sold it on payments for about $27,000. The next time I sold it for the mid-30s. And then the third time I resold it. Because a lot of what I'm doing is purchasing them and then reselling them on payments.

So, I did get the home back twice and then I finally resold it a third time for the very, very, very high 30s. And then that actually just paid off early last year. That was my first deal. And then the first year I had over 14 homes. And it was just kind of like, it went from just, it was really that thing of like just the light bulb effect.

And after that first deal, the demand was there, the supply was there. Nobody was doing this. Financing sucks. Buyers with cash are few and far between. There was hardly any investors doing this kind of thing. You know, mobile homes, there still is. So, it was just kind of the perfect storm in hindsight.

I mean, I would have never known that at the time. But in hindsight, just stayed active and saw the opportunity and really, really went with it. So, what does your real estate business look like now? It is still all mobile homes. Nothing, a lot's changed, but nothing's changed. So, it's still all mobile homes.

I mean, I know, I'm pretty good with mobile homes. I know very little about a lot of real estate. You know, there's just so many things to know about real estate. But my business is the purchasing individual mobile homes in parks, just the rectangle with like out the land.

Or it's buying that rectangle, you know, that mobile home with the land, with like a small piece of, you know, there's a city lot, a quarter of an acre. Or maybe it's in the country and there's an acre or two or three acres. Or now, actually, early last year, I purchased my first mobile home park.

The entire community of homes and land. So, that's it. And I'm also helping people. I write a blog, you know, to just kind of show some of the things that I've done, the mistakes I've made. A lot of the mistakes I've made. So, you kind of fell into it.

But you've obviously since then, I would assume, that since then, you have made an intentional decision to continue in this particular market. Why? Not just keep going with it, but really, I guess brand is, for lack of a better word, but yes, brand myself as, you know, in my areas, in my territories, as that mobile home go-to guy.

I mean, if mobile homes weren't able to be the vehicle to get me where I wanted, you know, if they didn't make as, if they weren't as lucrative as they are, if they weren't as plentiful, this is not something that I would do. I mean, I'm not, you know, just, this isn't a hobby for me.

You know, this is definitely a business, something that absolutely makes a good deal of value and income. So, that's the big reason, you know, I stayed in it because it was lucrative, ended up helping just a ton of people and got so much value inside of me. You know, that kind of the proverbial, like, with real estate investing, we show up as investors and we're just that, you know, we're the knight that comes in and saves the day.

And, you know, the sellers are just crying with joy. And that never happened to me. And I do purchase some single family homes, you know, here and there, because some of my marketing is ambiguous. But with mobile home people, buyers and sellers, it's amazing to hear the gratitude and how happy the sellers are when we can purchase their homes, how happy a lot of the buyers are when they're purchasing these homes and they're owning a home, and they would have owned it no other way, and we make everything affordable for them.

So, yeah, bottom line is the reason why I kept doing this, to get back to your question, was because it was lucrative. And then I did brand myself and I very much, you know, internalized that. Like, after six months, after I really started seeing, you know, some of the people that I started investing with, you know, that we started going to the same real estate clubs, like, I was busy and they weren't.

And they were following, you know, the same, "I gotta get some homes, I gotta flip something, I gotta, you know, buy a new..." Like, just all the kind of cliche, like, normal things that we know of when we first get into it, wholesaling and things like that. And then eventually, after six months, I stood up at the real estate event and I let people know, like, this is what I'm, you know, "John Fedger, mobile home guy, here's my number, mobile homes." And then that was a huge source of leads.

People were actually coming up to me like, "Oh my goodness, I'm so glad you said that. I got these leads, I don't know what to do with them. I throw them away because mobile homes are stupid." And so it's like, "Hey, send them over to me." Well, it definitely points out a major business lesson there, that differentiation is incredibly valuable.

Differentiation makes you referable. And that can be a huge benefit. So, I'm a potential real estate investor. I'm thinking, "Okay, I need to make a plan, make a strategy, make the business case to me of why I should consider following in your footsteps." Oh, that's good. Well, I would say first that it's so, you know, anybody can do a deal.

I mean, it's easy to do a skinny deal or just buying and selling a mobile home inside of a, you know, park. When we're talking about buying and selling mobile homes inside of a community, like a pre-existing park, that's very akin, well, it's not very akin, it's similar to buying and selling an automobile to some extent.

And I mean that because it just happens so darn quickly. Mobile homes attached to land, just like single-family homes, you need typically a 30-day process. There's title work involved. There's some, well, possibly underwriting involved. But with a mobile home in a park, there's none of that, hardly any. So we're buying and selling these very quickly.

There's not that many people doing this in the area. And, or there's most likely in your area, not many people doing this. Spoken because I'm working with people around the country. But for the fact of doing this business, you know, for the people listening, don't just do R.M. in my mind.

You're going to be setting yourself up to get the deals that I would want anybody to do. And it's so easy to do a skinny deal. And the deals that I would want anybody to do, Joshua, and for the folks listening, is like that litmus test of, hey, should I do a deal?

Is this a good deal? Like a quote-unquote good deal. And whenever we sell a mobile home, if you're selling it for cash, you know, buying it for cash, selling it for cash, we want to minimum double your money very quickly. But if you're selling it on payments, there's kind of a test of what you want to do.

You want to make sure that when you sell that home, you're making all your money back in the first year. So, you know, you purchased the home and you have acquisition. You purchased the home for this price. You have this many repairs in it. You want to get this much labor, this much holding cost.

You want to get all that back in your first year. You want to make $300 minimum cash flow per door. And when you're selling these, you want to hold them, if you're selling them on some sort of structured payments, you want to sell them for at least five years worth of payments.

So five years worth of $300 payments minimum. So that's in my mind, that's what I'm getting up for. That's a good deal. If it's not going to do that at the moment, it's not worth our time in my mind. So that I think is the first thing to like, let's talk about and let's have everybody understand, you know, just because you talk to seller down from $20,000 down to $10,000 doesn't make it a good deal.

So it's a good deal if you can make your money back quickly, you can make significant profit, and you can sell it for the next five years minimum with payments, if you're selling on payments. And then the case for going ahead and you know, once you understand what the deal is, these homes, like you said before, not that many people want them.

The, or well, other investors are willing to kind of give them away. So working with affordable housing, working with housing that nobody else, that very other few other people want, has been amazing. The folks that I'm working with in my business as well, we are doing, we're having to fight a lot less, I feel, than a lot of other our competition.

We have the luxury, like the luxury in this business of mobile home investing to be patient, to help sellers, to make offers and not step on any other, not step on any other competition, you know, to not have five other investors fighting for one mobile home. And then once you do do one deal, the way that, well, and I guess this is, you can run your business any way, or any way that you want to.

The way that I work with folks is that, you know, anyone listening to this, try not to just do one deal. Really brand yourself in the area. Everyone you talk to, let them know how you can help them. Let them know how you can help them with mobile homes, because it's not a big, it's not a big world out there with mobile homes.

Like mobile home people in your area, no other mobile home people. And there's not many of us investors helping them. So I'm not sure, I think I kind of went off on a tangent, Josh. I do hope that that answered a little bit of the question. It does. Follow-up question.

What are the driving factors in the deal? Let me give you a little bit of preamble so you can understand what I'm driving at. I'm comfortable with the idea of looking at real estate, thinking about the supply and demand. Single-family houses, my area, I see economic growth, people going to need affordable housing, this type of housing is attractive, blah, blah, blah.

There's underlying factors that are going to be driving the rents versus the values, mortgage rates, accessibility of credit, et cetera. I can understand single-family houses. I can understand the dynamics behind commercial real estate depending on the type of real estate. If we're talking class A office space, now our demand is going to be driven by these various business trends.

If we're talking about warehousing, these are the trends we're going to look at. What are the driving factors though with regard to mobile home investing? Because for the first statement you said of selling it in cash, obviously cash is less lucrative than – let's just stick with cash. Selling it for cash and someone saying double your money, what's driving the numbers of the deal?

What are the forces that are acting upon the mobile home marketplace? Great question. So that is a – I feel like to answer that question, in some respects you need to understand the sellers, you need to understand the buyers because the sellers and buyers are drastically different. In many cases, that's obviously a very blanket statement, but they're very different than single-family home buyers and sellers.

So when we're buying a mobile home, let's say in a park, let's say for – you're buying it on payments or cash or who knows. But when you're selling it, every seller of a mobile home, they want basically two things. They want the most money they can get in the shortest period of time.

In most areas, in most markets around the country except for the really hot spot markets like really – people are just going into these areas and spending money on anything. They're just – because there's so much lack of housing. So in most areas of the country besides those really, really hot spot like targeted areas, there are more sellers of mobile homes than there are cash buyers.

And mobile home sellers, they typically do not want to take payments. I'd say maybe the Hispanic demographic might take payments a little bit more. But they typically don't want to take payments with average civilians that want to come in and buy their home. The people that want to come in and buy their homes, it's tough to go to a bank and say I want to get a loan on a used mobile home in a park.

And they don't typically have that cash, 10,000, 20,000, 30,000, even 6,000 or 7,000 cash to go ahead and own any of these homes. So the buyers are – with cash are kind of few and far between. Financing stinks. There's not a lot of us investors doing this. Now I say that because for the seller, most – I'm not going to say most.

Many sellers that we talk to are sort of paycheck to paycheck folks. And that's not good or bad. It's just sort of indicative of sellers that there's a timeline. Like they need to leave in the next two months. They haven't paid this month's lot rent. They're being evicted. They have no cash for their first, last insecurity on the next place.

Right. So it's just a breeding ground where there's not a lot of buyers that can pull the trigger. And then sellers that have this like kind of guillotine above their head that's eventually going to kind of come down. So the market in a lot of areas when we're talking about cash, if your plan as an investor is, OK, I want to do everything in cash, buy homes for cash and sell homes for cash, buying them, you're not going to have a problem.

Selling them – like we're not magicians, Josh. We're not going to fool people or hypnotize our buyers into thinking, hey, I got this mobile home. It's worth like double what it's really worth. So if you can provide a value, if you can buy a home and then put some sweat equity into it, do some repairs to it, then you can legitimately raise the price.

Maybe as an investor, our job – and I say maybe, but it's not maybe – our job as an investor is to find deals, is to shake the tree. Not just find the easy ones, but find the people that need to sell or they're motivated or they're embarrassed about their situation.

So I'd say part of being an investor is finding these deals and then capitalizing on it when you do find it. But not much of my business, I would say 20 percent – in fact, most of the people I work with, about 20 percent or less of their business is reselling for cash.

So sticking on this cash theme, there's not a lot of buyers out there for cash. And the ones that do, they want a deal. They know my money is valuable. So I hope – so the market dynamics when we're talking for cash, very, very different than ones with payments.

So what I hear the primary value that you bring as an investor to the marketplace is liquidity because you're coming in as a buyer. So you said maybe 20 percent of deals are selling for cash. So 80 percent of your selling of your units is owner financing. You're financing the buyer, right?

That's what you just said? That's correct. So in that situation, what you're doing, a major service – I mean the biggest one that stands out to me is you're providing liquidity. You're coming in. Somebody needs to sell. They're trying to move. They want to get on to the next place.

They need money. They lost their job. They're trying to move back across the state. I mean when we're talking about lower income, sometimes it's a more transient population. They need money to get to the next place for first, last and security so they can rent an apartment in downtown where they can get a job.

So they need to sell. So you come in. You're providing a ready market of cash at a price that solves their problem and then you're providing the financing on the flip. You're improving the property, fixing things that need to be fixed, renting usable housing and then providing some of the financing for the person on the backside who is – who needs the financing.

You just go down to the bank. They're an immigrant. They have an unsteady job and you're providing the financing. That's a huge benefit. Is that the major – is that an accurate understanding of what you're saying? That is accurate, yes. As long as they have the ability to repay their good folks, then yes, we do provide financing.

And then I will say maybe 30 to 40 percent of the deals that we acquire, we're purchasing them from the seller on payments. So we're giving the seller payments versus an all-cash price. So how much do the values – I wouldn't even know where to start with valuing a mobile home because it would be such a different marketplace than something like standard three-bedroom, two-bath, single-family houses.

How much do the values wander around and how much are those – and what are the driving factors behind those values? If there are comps that – like if your strategy is purchasing however you're going to purchase and then selling it for either cash or FHA or conventional financing, which is perfectly – which can be done, a mobile in a park, a mobile on land.

There's certainly financing out there. But if that's what you want to do, then – I'm not sure if you can edit this, Josh. Can you go back and ask that question again? Sure. Okay. What then drives the values of a property in terms of what are the driving influences underlying the value of the mobile home marketplace?

That's a good question. I want to make sure I give you a good answer. So before I answer, I just want to think about that. You're referring to when we sell a home. Could you give me a little bit more context? I want to make sure I don't go off on a tangent.

Yeah. I guess what I'm thinking is – let me give you a little background. Let me give you a little background to this question before we start. What I'm trying to understand is what's going to drive that marketplace. I've never considered being a mobile home investor until doing this interview.

But I am working on being a real estate investor. And so I've been going out and I've never lived in a mobile home. I remember one friend of mine who did live in a mobile home but I don't spend a lot of time in mobile home parks. I looked at in my area when I was trying to find what's the best deal on housing.

I went and I drove a couple of local mobile home parks that I could find to see if that would work well for my wife and I to live in. But when I ran the numbers, I didn't find any compelling financial thing that got me to say, "Hey, this would be what we should do." I've been researching and studying the local neighborhoods here in my area and looking for – to understand the different markets.

I found a few mobile home parks that I didn't even know existed. I've driven through them and said, "Wow, OK. Now I didn't even know this was here. I just drove past it on the road and here's this huge mobile home park." But I've never considered going into it and investing.

And my biggest nervousness would be that I don't understand the market. I don't understand what's going on in the market. I don't understand what the driving factors are behind the values. I'm much less comfortable going into it and saying, "Yeah, this is a deal. Here's how I know it's a deal.

Here's how I can expect the price to move." That's the preamble to this question. What are the driving factors that are going to drive the values or the supply and demand of these units if I were to go in and start buying mobile homes? OK. Because you originally – does this question also have to do sort of of how are these valued or how do I – just the value.

Is there like a 70% ARV minus repairs? Is there some sort of formula? Sure. Absolutely. Is that akin to what you're – to kind of what you're asking? Well, more I'm asking the marketplace, meaning that how do I know if there's going to be a demand for this unit?

How do I know if I'm getting a good deal? Oh, OK. Oh, OK. Perfect. OK. Thank you. It's funny because it's like when you say a certain thing or just people in general, you can say one thing and it just clicks. So, OK. Yeah. That makes perfect sense. So understanding your market, like clarity is by far one of the biggest keys to my – to my god, any kind of getting started in any new real estate, especially with mobile homes because it's so easy.

I know I've said this a few times, but it's so easy to do a skinny deal. It's so easy to do a bad deal. You think you're doing right and it's not. So the driving factors to know before you pull a trigger, we have to know what these homes are going to sell for.

We have to know what they're going to sell for cash. We have to know what – if we sell them for payments, what our buyers are going to pay for them. We also have to know the park application requirements. Also, what is for sale in that area, in the park nearby?

What's for – what's being sold on payments? What's being rented if you can rent in this community? What's being sold for cash? And then is there a lot of homes selling for cash? In most parks, there won't be. In some parks, few parks, there will be comparable sales of five homes this current year were sold in under 30 days to a cash buyer or to cash buyers for $50,000, $40,000.

So in some parks, there's actually comps. And if your exit strategy was selling all cash, that might be valuable to you if it was a newer home maybe or even if it was an older home just depending on the inventory. So homes on land versus homes in parks, I mean they are apples to oranges.

But homes in parks, we're looking at everything from the park manager to the park itself to the lot fees to the safety to the application process and a lot – and the repairs of course. And then knowing buyers. What do your buyers want? Do they want a handyman special?

Do they want a home that's ready and fixed up to the nines? Do they want to buy something, two-bedroom versus three-bedroom? How much will they pay? And that kind of loops me back to what I was saying before. We have to know what buyers will pay before we can purchase a home because remember one of the kind of litmus test things I told you would depend on a good deal is if we can recoup all of our invested capital in a year or less.

So we have to know what we can make in a year worth of down payments and payments, what we can make in that first year to then say, "Okay. Well, this is how much I can offer for a home in a park because I want to be recouped in my first year." And then make profit from that point on.

Did that help a little bit? Did that make sense? So where do you live, John? What part of the country? Well, a lot of my business was started right there in Florida and now I'm currently in Texas. What part of Florida? The Tampa Bay area. Okay. So I live in West Palm Beach.

Here's the question. Why do people in the places that you own mobile homes, why do your tenants or why do your buyers choose to live in mobile homes? Good question. So I've noticed around 2009, 2010, maybe 2011, I had most of my people – well, let me actually go back even further.

Before that time, before the 2008 crash, the folks I sold to, most of them lived in a mobile home. They knew about mobile homes. They grew up in a mobile home. They lived in a mobile home before. They understood it. They fixed them. They just knew what was going on.

It was affordable to them and they were used to it. After 2008, for about three years, I noticed people that were jaded towards single-family homes, maybe they had a foreclosure, maybe not. But they were coming to me and saying, "Oh, my gosh. I can purchase this home for 30 to 40 bucks a square foot versus the home I just came from," which was three or four times that.

I'm selling at a pretty good upper-end retail price on payments. I'm happy, obviously. Then these people moving into these homes are happy. They're saving so much money. So I did notice that for about a three-year period after 2008. Then after that, since then, I've noticed that the folks I'm selling to more currently now and for the past few years, they've been the same people as before.

They've grown up in a mobile home or they lived in one before, but it's what they can afford. Flexible with the move-in fee, flexible with the down payment or the monthly payments. I want to make sure we put good people in all of these homes. They have the ability to repay.

We're not going to get them back. So that is the most -- I'd say that's the bottom or that's like the reason. It's affordable housing. I think if people had a choice if they want to move into a mobile home or a single-family home, I think most people that would choose a mobile home, would rather live in a single family.

I don't think anybody listening is debating that, but it's just affordable housing and it's nice housing. I mean it's not slum lordy. There's a lot of that out there, I'm sure, but what we're talking about is not. These are roof walls, central heat and air, appliances, decent carpet, paint, smells good, nice people, good neighbors, good park, decent park probably.

I guess I'll have to go out and spend some time in the parks nearby me trying to understand the economics of it. My only experience with mobile homes was looking at one park that was near my office as a place that I thought about renting. And when I just went in there because I thought maybe I could save some money, I'm unencumbered by any kind of stigma that other people have.

I don't really care about what people think about where I live. So it wasn't a problem for me, but I just wasn't impressed with the finances of it. I didn't find that there was a major benefit. I didn't find it was substantially cheaper as far as the rental costs than other options.

Now maybe I should have taken it through and run it all the way out, but the park that I was looking at was a nice one, but the lot rent, just to rent the lot, it was I think $500 or $600, $700 a month. Now again, there was a nice park in Palm Beach Gardens, but the lot rent was so high that I just ran the numbers.

I was like, "I don't understand why people would live here when there's lots of other places to rent that are more cost effective." Parks are on a case-by-case basis. There's ones that have the mom and pop owners haven't raised rents in 20 years. Then there's other parks where they know what the market is and they go above it.

They know that the people in their communities, let's face it, it costs $2,000 to $10,000 or more to move a mobile home and then reset it up somewhere else. A lot, well not a lot, mobile home park owners know that and some of these park owners, they try to gouge, get as much money as they can.

So in some parks, it is very inflated, the price, and it's tough to make $300 on a two-bedroom or a three-bedroom. Now I'm glad to say that that's a minority of parks. Most parks want to do right by their people. They want to provide, they want to get paid and make a profit, but most parks are average lot rent.

The one you might have went through might have been a little bit higher or might have been a five-star park. Maybe it had a golf course or tennis courts or some other amenities. Yeah, it was very nice and I'll go and look at the other one that I've been to recently that's much more basic.

It's much more of, "Okay, this is working class housing," and I'll dig into the numbers there. So I need to check that out. How do you deal with the major fear I think that people have that the value of mobile homes goes down? It's so funny to me. I'm sorry.

I don't mean to laugh, but you're doing this for 14 years and I forget the basic questions, the basic fears that are on people's minds. I remember thinking these. I remember right in Hurricane Alley, which is Florida, I remember thinking, "What am I doing? Why would I buy these?

They're just going to be gone in a year. They're going to blow away." Obviously, that's a fallacy. The homes that we're purchasing are 20 years old, 30 years old, 10 years old. They've been there. They've lasted. They might go somewhere, but it's not likely that they're going to be blown away.

And then as far as – no, that wasn't what you were asking, but it kind of equally – although this isn't a fallacy. Mobile homes do depreciate, that's for sure. When we're purchasing these mobile homes, anybody that purchases a mobile home in a park, on land, or any piece of property, don't buy a mobile home thinking you're going to make money or hoping you're going to make money.

Buy it knowing that you're going to make money. Mobile homes absolutely do depreciate, but the value when you're purchasing them, you can purchase them from a seller that wants to get out, they need to get out, they're willing to sell, they've tried to sell, the market has spoken, and you're the one coming there to make them an offer, whether it's cash or payments.

But you're purchasing that – if you're doing your numbers correctly, you have a lot of value in there. You have a lot of potential profit to be made. When we're selling – hope that wasn't too loud. When we're selling the homes, it's on the opposite side of that spectrum, where we're not selling to somebody that just – where they kind of can get a home or they can go to a bank.

We're selling to folks that want a property, that want to live here for the next five, six, seven years, that are tired of renting for the last 20 years. They finally want to own something. So we're selling to those folks, usually on payments, sometimes for cash. But mobile homes do depreciate.

Even on land, the homes depreciate, the land sort of appreciates. And you can end up – I guess if there's comparables around you, you can absolutely buy a home conventionally at one price and resell it conventionally and make a big profit in between. So the whole argument of mobile homes depreciating is not the question that you want to be asking.

It's is there a value there? Can I create a value from the point when I buy it to the point when I sell it? And obviously that's on a case-by-case basis, of course. But I think that's the real question that people should be asking, not so much the depreciation, because that's not even a question.

It's like, yeah, they do depreciate. Everything depreciates. And if you doubt me, even stick-built houses on a foundation, they depreciate. If you doubt me, you have two houses that are next to each other, identical. They're the same price. One of them is 30 years old and one of them is brand new.

Which do you choose? You choose the one that's brand new. Even if there were a difference in price and you're paying more, you pay for the brand new. So the only reason that a house wouldn't depreciate, land can depreciate. The only reason a house wouldn't depreciate is if it's been maintained and improved and if the underlying market dynamics are increasing the demand.

Otherwise, things wear out. There's a reason you get a depreciation expense for real estate ownership because your house is depreciating in value, no matter what's going on. But I ask it because a lot of people have that question that they've been taught. Well, you wouldn't want to own a mobile home because it depreciates, but you would want to own a house because it appreciates.

It goes up in value. I agree with you. Run your numbers and ask yourself the actual question on an actual deal. I guess we can say I think that we can all agree if you're going to buy a mobile home in a park, and this is something that's really sad.

I get this at least once a month where it's a seller who purchased a home. They might have purchased it new or they just paid retail. They paid cash for their home five years ago. And now -- or not even five years ago, two years ago or less. And now they want to turn around and resell it for cash, and they can't even get a fraction of what they paid for.

So, yeah, mobile homes do depreciate. If you're going to hold on to it for a long time, you want to probably -- there's just so many -- I think I'm kind of going off on a little bit of a tangent here, but I see it regularly where people fall into that.

I mean there's the general public, and that's probably where a lot of these horror stories come from is, you know, I bought a mobile home for this price, and I couldn't even get half my money back in like two years when I went and sold it. And because that seller sold it for cash, which, again, there's not many cash buyers out there, and everyone's competing against those same ones.

So there's -- all around the country I think that there's a lot of bad tastes in a lot of people's mouths just from being maybe just uneducated or just unclear on the real world, like behind-the-scenes mobile homes because they are valuable. Will they last another 10, 20, 30 years if they're taken care of?

Absolutely. But do people have the cash to pay and do they depreciate? Yes. I'd like to ask you a question because you have an interesting entry on your website about titling property into land trusts and personal property trusts with a special emphasis on mobile homes. Tell me about land trusts, personal property trusts, and how and why you use these entities.

Oh, my goodness. Well, that's something that when I started, I was always using them. My mentor at the time in Tampa didn't know too much about mobile homes, but I had a mentor and I was bugging that mentor almost every day. And land trusts are very popular and so are personal property trusts.

So with the help of an attorney, with the help of some other preexisting documents, went ahead and started purchasing these mobile homes in parks, on real land, in personal property trusts. And that was just the way that I got started and it's sort of just been conditioned over time.

Now, we do use those for anonymity purposes, for probate, and just because that's kind of what we've been doing for so long. But it's nice to keep names off of public record as well for a few different reasons. Not any reason that we would be taking advantage of folks, but we certainly don't want to be a big whale when folks are Googling your name to see how much property you own.

And if you're going to be reselling these properties, then you wouldn't even be owning the home anyway. But I'd say for lack of a better way, it's been out of habit. And then the fact that they do allow for that sort of veil of anonymity, that's why we use them.

So habit and anonymity. So the idea here is you establish an entity. This is a trust, so it exists as a document. And the trust is the entity that owns and transacts the deal. And because it's listed on the public records as 123 Maple Street Land Trust, and that's the owner of the property, it's not necessarily connected to Joshua Sheets.

So anonymity is great. However, question, how much cost does this add to a transaction for you? It adds zero cost. Why? The documents are there. You just use a boilerplate document every time. One, correct. Got one that works, that's state specific, and now around the country that's state specific.

Correct. And then those are filled in. Now, if there's something that needs to be different, then that will be different. But no, 90% of the time there's zero cost or more than 90%. What about the cost of a separate taxation entity? Are these structured as a flow-through entity, or do they file tax returns?

They are flow-through. So you don't have to file any additional paperwork with a land trust? With these particular ones. Interesting. Any recommended resources on the topic that you've found to be helpful, specifically on real estate ownership and titling? With regards to trusts? Yes. Mark Warda in the states, I'm sure you've – or maybe not.

Mark Warda is a big name. M-A-R-K-W-A-R-D-A, I believe. He writes a lot of good trust stuff. Also the NOLO, N-O-L-O dot com. That's a good sort of legal reference, a legal aid reference that folks can use. But definitely get yourself – you have an attorney on your side in the beginning.

Last question, John – or second to last question. Do you – obviously you're pretty deeply invested in the mobile home business. But what's your least favorite aspect of this investment strategy that you've chosen for yourself? The least favorite was the three years that it took me – and I'm a slow learner, apparently, with this.

I learn things fast sometimes. But it took me three years to properly screen people. The first three years of my business, I had a 100 percent default rate. I put people in that didn't need to be in. They had no right being in my homes. They were unemployed. They were homeless, living in a church.

I would fall on my heart so many times and it would end up burning me. I can't remember a time when it didn't burn me. So screening people, the people that we're selling to, if you advertise a home with owner financing – and nowadays there's mortgage loan originators to help.

There's closing attorneys. We have to make sure that people have the ability to repay. But back years ago, you didn't have to do a lot of that. So it was on me to pre-screen people. And I just did not pre-screen people correctly. So you can do everything correctly – the acquisition price, the negotiation, the repairs, the holding costs you manage.

But then you resell the home to somebody that rents it. You rent it or you resell it on payments. And you put the wrong person in there that just causes you a headache. I mean – and more than a headache, obviously. Anxiety, headaches. They're the wrong person. They were never the right person.

So I would say that. And I guess that kind of boils down to the people. But I don't want to say the mobile home people, buyers, are any different because I think that there's flaky people. And there's malicious people and there's bad apples in every group. Very wealthy people, people that more need affordable housing and everyone in between.

So more so I would say just with real estate or – for me, it was like pre-screening people. I followed my heart too much. I listened to what people said instead of really understanding who they are and knowing that somebody – you don't have a crystal ball. So somebody's past is typically going to equal their future.

I mean people can change, of course. But looking at somebody's past is a good indication of their future. So that was a big eye-opener for me that took way too long. Tell us about your website, courses, podcast, any action that you'd like my audience to take after this interview.

Sure. If you're interested, I hope there's a lot of free actionable items, videos, case studies on the YouTube channel that I have on my website, mobilehomeinvesting.net. You can reach out there and it's been going on for I think since like six or seven or eight years now. So there's a lot of content there.

So check it out. And if you have any questions, don't hesitate to reach out. John, thanks for coming on. Thank you so much. I really appreciate it. I hope it was valuable for listeners and everyone. Thank you for having me. Thank you for listening to this episode of Radical Personal Finance.

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