In our last discussion, we talk about how pursuing MHP ownership of vacant lots is a much more efficient use of your time than the alternative. That’s because there’s so much more leg work and possible headaches when trying to renovate a run down park. This boils down to one factor: I don’t have a lot of spare time.
As such, I’d rather buy something that’s either already stable and cash flowing, or something that I know I can populate within six to twelve months’ time. This way, I eliminate a lot of the aforementioned leg work, making life much easier.
Using Other Real Estate As A Model
This applies to most forms of real estate. Take, for example, my recent purchase of an office building. It was vacant, and all I really had to do on the front end was get a cleaner in the building one time. From here, I can focus on getting the tenant in, which I did! They’ve already signed an LOI committing $600,000 in property improvements.
This is great because, even upon the tenant leaving the space, I get to keep the improvements made. I benefit from their efforts even beyond their time spent in the space. This also increases the value of my property in the long run.
Plan, Profit, Reinvest
So let’s break down the math. It cost me plus or minus $800,000, including down payments, attorneys, mortgage, taxes, insurance, and so on, to get into the deal. Since I’ve already gotten a national tenant willing to put up the mentioned figure, my building is already worth over a million dollars if I refinance. And that’s only the start! They take on the brunt of the responsibilities, and I get the lion’s share of value.
From here, I can take that profit, and reinvest it into another space, replicating the system. After 5 to 10 years of doing this, even if it’s only once a year, you’re sitting pretty. Even with a bank financing this deal, you still get to keep all the profit. You get to leverage the profit, and get back what you put in tenfold. Even if you sell or refinance it, it’s still worth it. It’s essentially free, infinite money. And even though my example is from an office building, the MHP space offers the same opportunity. You can multiply your money by 5 to 10 times, though it will likely take a bit more leg work on the front end.
The MHP Expert
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