Editor’s Note: Welcome to the companion article to Episode 17 of the MHP_IRL podcast! The purpose of this article is to expand your podcast listening experience with additional content. Companion articles will unpack larger concepts that we talk about during each episode that will give you practical and most importantly, actionable advice that you can apply to your MHP investing journey.
You can have all of the money in the world….
But, if you’re not determined, if you don’t want it bad enough, it’s not going to happen for you.
These wise words come from my friend, the database legend himself, Charles DeHart.
That’s right, if you’re new to the industry, Charles is someone in the industry that is KNOWN for having one of THE most comprehensive databases. (And they’re not lying—I’ve seen it myself!)
Here’s the thing: Charles didn’t start out with a huge database. In fact, he wasn’t even in the real estate industry at all.
When Charles first got into mobile home parks, he was working as a government security contractor in Baghdad, Iraq, for the United States Embassy.
“There was this company called Triple Canopy. It was paying $150,000 to $200,000 a year. I took that job, which is kind of like a black hole, and I felt like real estate was my way out,” Charles said. “Somewhere around my ninth and tenth deployment, I got into mobile home parks.”
“I found it through a real estate agent. Then, I went to a Frank and Dave bootcamp, and then I started to work on my database. Building the database was my way out from this blackhole of continuing to go overseas. It was a huge necessity to build it and then eventually it became really good.”
Building a comprehensive database can be a lot of work. It’s time-consuming, you have to do a lot of research, and it has to be organized.
In Charle’s experience, he believes he has an advantage, “You have to understand my typical day there. I’d wake up at five or six in the morning, and we were doing something around nine in the morning. But, my workday was done by 1 PM every day. So from 1 PM until 10 PM, my day was pretty much wide open. During that time, we weren’t allowed to do anything. We weren’t allowed to go out in the town. You were stuck there in the embassy. So there were a couple of options. You could watch TV. You could play video games. Instead of that, I did databasing. So, for me, it wasn’t like this epic grind. There was nothing to do so I just did that.”
Charle’s rotations were four months at a time. For 10 hours every day, he would do databasing. Now, 10 hours seems like a lot of time to be working on something like this, but for Charles, “It took me forever to figure out how to do that database. I did not reach out to an owner until about 90 days into the project and during that time period, I spent the last 15 days of deployment reaching out to them.”
Now, in hearing Charles’s story, I had to ask him what were some challenges that he faced. I mean, let’s think about this….
Charles was overseas. He had no connections. He couldn’t leave the embassy. There had to be something.
His challenge? Making phone calls.
“The big challenge was that I had a phone in my room, and it was a California phone number and then when you dialed it, it would go to a switch board, and you would have to dial a seven digit room number. There were a whole bunch of hoops that you had to go through to get to my room. I couldn’t use that number. I also had a cell phone from Iraq and if it came on your phone, it would be 18 digits. No one was going to answer that. Then, I had my cell phone which was three dollars per minute. I had to make all of my cold calls from my cell phone. Our wifi was absolutely terrible. We couldn’t use Skype or anything else. It would cut out,” Charles recounted.
Not only does that sound time-consuming and frustrating, it also sounds expensive. Imagine having to pay three dollars per minute to make, sometimes, fruitless calls.
In the end, Charles had this to say about his experience, “The experience was fun. Having multiple moving pieces, all of these things standing in your way, I think the test is really the fun part. When you’re starting out, you don’t really realize that you’re in it. But when you’re done with it, you look back and you realize how fun it was.”
To play off of Charle’s, and others like him, experiences, being a beginner in this industry can be nerve-racking. It can be hard. It can break you.
When you’re in the eye of the storm, it’s not so fun. From building your own database, raising capital, getting your deal and so forth—shit can feel soul crushing.
But, here’s the thing, even if you think you’re starting out with nothing, you have something. This thing is, many times, something that the others around you may not have.
Determination.
“You are starting with your own determination. You could have all of the money in the world, but if you’re not determined, if you don’t want it badly enough, it’s not going to happen for you,” Charles advised. “I think that’s the mentality you have to have. If you’re not coming in with family backing or tons of money, it’s just you...find out what the one thing is that you’re willing to do that no one else will. Then, you got to go do it. That’s what’s going to make you successful - being the person that’s willing to do whatever it takes.”
The good news? This industry has a TON of room for growth and innovation.
“There’s a ton of dinosaurs out there. Someone is going to approach our industry and do it a different way that’s going to make a big wave. That innovation will make way for someone who is paying attention to get into the industry. So, just pay attention.”
These days, it seems like everyone and their mother is getting into the industry. It’s definitely not like it once was. Not that that is a bad thing. It just demands smart, strategic thinking.
“I think the best opportunities I’ve seen lately are infill projects so if you can set yourself up to do huge infill projects and do them quickly and better than everybody else, it seems like those guys are really making money these days. Whereas the people who are just trying to buy really well, and do an operational turnaround, you don’t really see operational turnarounds that look like good investments,” Charles said.
Here’s something to remember with projects like this. You’ve got to keep your costs down because the numbers don’t look good if you’re spending $15,000 to $20,000 to bring a home in and slap someone in and not be able to sell it.
As my good friend Mike Conlon says, “you can only take on a certain number of projects at once.”
If you come into this industry with this mindself of “I’m going to scale up this portfolio in 12 months” you may be able to do it, but I gotta tell you I work every day and it is really difficult. It is easy to outsmart yourself and buy some stupid properties. It is really difficult to find something where the investors are happy, you’re happy, and the tenants don’t get screwed over.
I’m not telling you to scare you off. In fact, it’s the opposite. I think people should get into this industry. I think we need more smart, hard working people because there is a serious crunch on affordable housing and I think people who really care about others should get into this industry.
Those who are willing to grind it out, who have the determination, who are willing to make the sacrifices, those are the ones who are going to come out on top.
Where will you stand?