More Money Podcast - 026 Mobile Home Investing - Rachel Hernandez, Author & Blogger at Adventures in Mobile Homes

Episode Date: November 11, 2015

Rachel Hernandez is arguably one of the hardest working solopreneurs out there. Having had an entrepreneurial spirit from a very young age, Rachel shares her story of working long hours to pay for university and eventually starting her own successful mobile home investment business. Long episode description: My guest for this episode is Rachel Hernandez — arguably one of the hardest working women I know! Not only does she have a strong work ethic, she’s basically been an entrepreneur since she was in elementary school. Who else could come up with an idea to sell pencils and stickers to kids (as a kid) but someone who would end up becoming a successful real estate investor. In this episode, Rachel shares her story of how she worked her way to pay for college, turned down a chance to do her MBA and took a huge leap of faith by starting her own real estate investing company. Although she now predominantly invests in mobile homes, she has a wealth of knowledge on single home investing as well. She’s even so knowledgeable that she’s penned 3 books about real estate investing (and counting!). Thanks again Rachel for being such a great guest. You’re story is incredibly inspiring and I hope that I too will become an property investor down the road, though probably not in Canada if I’m being honest. Then again, I might actually be able to afford a mobile home in Toronto or Vancouver? Since we mentioned a few resources on the show, here they all are below. And make sure to leave me a review on iTunes or Stitcher to let me know what you think of this episode! Blog Posts Rachel Mentioned I Ditched Graduate School to Invest in Real Estate, Here’s What Happened Investing in Mobile Homes: Why I Enjoy Mobile Home Investing Rachel’s Books Adventures in Mobile Homes Real Estate Investing Sucks Real Estate Investing Sucks Pt. 2 Shownotes: jessicamoorhouse.com/26 Learn more about your ad choices. Visit megaphone.fm/adchoices

Hello, and welcome to Episode 26 of the Mo Money Podcast. I'm your host, Jessica Morehouse. And today I'm going to be talking to Rachel from Adventures in Mobile Homes. She was actually one of the first people that reached out to me and asked to be on my show. And when I looked more into her, I'm like, hell yeah, you're going to be on my show. I've never heard about anyone who is into mobile home investing. That's a thing apparently. And it's actually pretty lucrative. So you've heard about real estate investing. So this is kind of a whole different thing. So I'm very excited to talk to Rachel about what it means to be a mobile home investor. How can you get into it? What are the costs involved and all that fun stuff? Thanks, Rachel, for being on the show with me today.

Thanks, Jessica, for having me. You're welcome. So let's kind of get into it. What inspired you? What was the motivation for you to kind of get into personal finance and investing in specifically real estate investing? Was it something to do with your, just how you grew up or what kind of sparked that for you? Sure. No problem. Well, as a kid, I mean, I wasn't one of those kids that said, well, I want to be a real estate investor when I grow up. There's just no way. I don't think most kids say that. As a kid, I, you know, I grew up with a family of professionals and we were the family that moved every five to seven years.

And I hated riding in the car, looking at houses with my parents and the real estate agent. It was just not fun as a kid. So and did you have to move around just because of their work schedules or they moved a lot because of work? No, it's just, my mom would always want a bigger house. Oh, okay. Yeah. So, I mean, it was just, I want a bigger house. I want a better neighborhood. And it was hard for me growing up as a kid, which I eventually learned to make new friends, but it's just like, I left my old friends and I eventually learned to make new friends, but it's just like I left my old

friends and then I had to make new friends and I transferred schools a lot. And so, but then I guess it kind of helped me as an adult because it improved my networking skills. Absolutely. Yeah, that's a good skill to have. Yeah. But basically growing up, I was not frugal by any means. And either were my parents. One thing my dad taught me was work ethic. He taught me if you want to buy something, you got to work for it, like physically work for it. And so I was always the kid that I had the lemonade stand. I had always a business on how to make money even at a small age. I got stickers for good behavior and doing well in school. And I would actually sell those stickers to kids because I wanted to find a way to make money to buy candy. That was actually amazing. I love that. So it was always like that and um one I mean I was always getting

trouble for doing that um one business idea where I didn't need to have any money I didn't need to have any startup fund as all at all was I had a friend and when it was recess time I'd have a run to the swings grab a swing and guard it and then we would charge people to ride the swing. Oh, my God. That's amazing. And I got in trouble for that. Well, yeah. That's kind of not fair, but it's a great business idea.

Yeah. And, I mean, we made – I mean, as a kid, I mean, we bought so much candy, and it was great. But then we had to find other ways to make money because that wasn't going to work out. I mean, the other thing is we had a pencil business and there was this one machine at school. Everyone went to it because had these really cool pencils back then when people use pencils with different colors. And so, you know, we had we got the money that we saved up and we just kind of emptied the whole machine out. It was like, I think two for 25 cents. And then we started selling each one for a quarter and there were no pencils to buy. So I was always having business ideas, but I was getting in trouble for, so, uh, yeah,

to answer your question, I learned how to make money, but I wasn't, you know, very educated on like saving and being frugal by any way. I guess I kind of came later. I mean, yeah, it's not something that I think that's amazing that you were so interested in making money at such an early age. Yeah. And I actually had a mission because I just loved candy. And my parents had your goal. Yeah.

Limit the amount of candy that, you know, I had. I mean, come Halloween, it was great. But then when that candy was out, then what, you know, back to square one. So I guess did that kind of, uh, passion for making money kind of follow you, you know, in your teenage years and your, um, early adult years? Yeah. Um, in college, um, college, you know, I went the route of being an artist. I was a humanities major, and my parents wanted me to be practical. My dad has an MBA, and they were basically, we're not going to support you as an artist. We just are not going to support you as an artist. So I basically paid for college on my own. I mean, it was pretty hard because I had like three jobs.

I mean, I'm sure you can relate, Jessica. Yeah, it's not easy paying for school yourself. Yeah, I got three jobs and then I had to get loans. And it was kind of hard because, you know, it was just one of those things where I was trying to make it on my own. My parents had no qualms about paying for my brother's college education because they were doing something practical with their lives and dropping 40 grand a year on each of them for college. But, you know, it made me who I was. So in college, I had a couple of other entrepreneurial ventures, but they were more legit. Not pencils anymore. No, no, no. I mean I was kind of a little bit ambitious in college, and one of the things I did was I had applied for an internship position in Washington, D.C., and I landed an internship at the Justice Department. And so from there, I landed all these different experiences from there, like jobs and stuff

like that. So by the time I got to my, I think it was my junior year, I started a career consulting business. Amazing. And resume service. And basically I was charging people like $20, which was so cheap back then, $20 to do the resume and then put it on a disc. And, uh, I think the place there was charging like over, it was going for like a hundred, 150 or something like that. Yeah. But the problem with that business, it was dependent on me.

And I had like all these people. I don't want to do my resume. Let me make you look better. But then it was on my time and then I had work and school and it was crazy. So I had to shut that down. And then after that, I did the career consulting business where I would consult. Now, I was a junior at the time, I think, seniors on what to do after they graduated from college. And then it became something like I charged them something like $20 an hour. And it became one of those things where I became more of a psychologist.

And that really wasn't what I wanted to do. So, um, cause people were willing to pay for it because, um, cause I had some experience to back it up. And then I also had the resume service, which also helped. Um, but there was actually a waiting list at the career counseling center for people to talk to counselors. So there was just too many students and not enough counselors to talk to. So they're like, well, I'll just pay this person to counsel me on what to do after I graduate, which was pretty darn crazy. So because I hadn't graduated yet either. So yeah, so that was another entrepreneurial venture. And then I think, oh, yeah, the other thing, my school paid me to write cliff notes for classes. So basically I'd write these notes and then the school would sell them and they would sell me like pay me as an independent contractor to actually write these notes.

OK. Yeah. And I got that job through networking that program that I told you about. I actually became the director of helping other students get to find internships in Washington, D.C., too. So, wow. Yeah, I did a lot of crazy stuff. Yeah, you were a hustler in college. It's awesome. Yeah, I was. Yeah, but I really I didn't have much of a life. Jessica, I'm like, I don't think I did in university either, quite honestly. That's just kind of part of it. The people that are like, oh, yeah, I was so busy partying. I'm like, I mean, I guess I did a bit of that, but I was also

at school a lot. Yeah, I missed out on that. And I had friends who like they joined a sorority and they wanted me to, but it was so much time and I didn't think I could handle three jobs and do all this and handle all the you know events of a sorority and so I missed out on that part which you know I don't know you know in Canada I don't think they're really I mean I could be wrong but from the universities that I know are the people that went to the universities that I'm aware of like I don't think sororities are a thing here. So you're just, you know, being Canadian, like we don't we don't know what that's like either. So you probably did miss out. It's probably fine. OK, I'll keep you posted on that.

So so after college, was that kind of when you I mean, if you went to art school, is that something that you wanted to pursue after college? Or did you change your mind kind of, you know, closer to graduation date? It really wasn't art. I mean, I was a humanities major. So it was basically more writing. So it wasn't like, oh, right, you know, arts. And I got more into business because I kind of looked at, you know, all the stuff I did in college. I'm like, business is the way to go. But I always want to have my own business. But I

thought the way to do that was to actually apply, you know, work for a few years, apply to MBA school, work for another few years and then have a business. That's the only path that I knew. And my dad just wanted me to get my MBA and work for the man forever. So that wasn't my plan. So basically, in college, I applied for this pre-MBA program. It was a top tier business school. I'm not going to mention the name. but basically their task was to help prospective applicants prepare for business school. And the people in the program had actually graduated from college already. So me coming in as an undergrad, I was the youngest person. And I remember and I wrote an article on this, Jessica. It was called I Ditched Graduate School to Invest in Real Estate.

I can send it to you if you want. Yeah, I'll include that in the show notes. It sounds interesting. But basically what I learned, I mean, I went through the program and while in school as an undergrad and while working and doing all the crazy things that I did and having no life. But I went through the program and the director, she sat me down and she's like, Rachel, seriously, you cannot have a business at your age. You have to work for a few years, get your MBA, work for another few years, and then you can have a business.

And my whole thing is like well how about Bill Gates and you know I mean we see people you know now like Mark Zuckerberg and and you and she told me that's not you oh really yeah and the good thing is I had a mentor who actually supported me and she's like Rachel you're not gonna fit in here seriously and my mentor was actually she was Ivy League, really smart. I mean, she had a bachelor's, a bachelor's from an Ivy League school, a master's, a PhD, and then she was getting her MBA there. And she was like, Rachel, you need to just do your own thing. Forget this and just go start whatever business you want.

I mean, I didn't know at the time what I was going to get into, but I knew I wanted to do a business. And so I left the program, decided not to go to business school. They kept contacting me because they wanted me to apply because I was through the program. I mean, the whole point was so that you can apply to their program so they look good. You know, it's all political anyways. And fast forward a couple of years, my mentor who I kept in touch with, she's like, Rachel, I'm so glad that you did the real estate thing and you didn't go to MBA school because her situation was that basically she became a senior consultant for a top

consulting firm over there, you know, and she got her MBA and everything. But she's like, I work from home, but the company controls my time and I can't do the things that I want to do. And if I had a business, I could do that. But I can't because and now what I do, you know, because they had a family and she had kids and everything. And she's like, at the end of the day, it's about time and managing your time. And so I kind of took that to heart when, you know, this was at the beginning of my real estate investing career. I was like, well, I mean, I guess I'm just going to give this real estate stuff a shot and then, you know, go from there. So I worked for a few years since I have a background in networking and all that.

I got a job as a business-to-business sales executive for a Fortune 500 corporation. And anyone who's listening who's graduating or going to be graduating, these companies are always looking for salespeople. I was pretty lucky, but since I kind of knew how to network and I sent my resume directly to the sales manager and she called me up because she was an English major. She was just so cool. You're in humanities major. And so I kind of hit it off. She hired me and I was like the youngest person on the team. Everyone there was like probably like 10 years older than me or something like that.

And I got some good experience and then saved up some money. Then after that, I got into real estate investing. Get groceries delivered across the GTA from Real Canadian Superstore with PC Express. Shop online for super prices and super savings. Try it today and get up to $75 in PC Optimum Points. Visit Superstore.ca to get started. So why did you get into real estate specifically? Was it just something that you've always been kind of curious about

or did you know someone who did? No. I read Rich Dad, Poor Dad by Robert Kiyosaki. And that book, I know it's cliche and people are like, oh my gosh, that book is so basic, blah, blah, blah. But honestly, that book changed my life as well as other people's lives around the world. And the reason being is that because before I thought there was only one way to make money and that's through, you know, you're earning it at a job and earned income. Or if you're self-employed, you earn it yourself. I had no idea about passive

income, income coming in no matter what from rental property or from royalties or what Bill Gates did when he was a kid. I think he was really young, like 19 or something or younger than that. He made a program, a software program. He sold it to a company and he got royalties from it. So that really changed the way I saw things. And I saw that Kiyosaki had done things through real estate investing. Now, I don't like looking at homes, but the thought of actually getting income without me being there excited me. And it's not just through real estate investing. I mean, it could be through anything. So but for me, I chose the path of real estate investing. And then so I got interested in it, learned it. And I started out just getting paid and looking for deals for other investors.

I already had a sales background. So this is helpful. Yeah, they would tell me, OK, Rachel, I want to find this. And then I'd find it, they'd pay me. And then I kind of took a step further. And then I put deals together myself and sold the contracts. And on my first deal doing that selling the contracts, I made a whole year salary. And I'm like, Oh, my God. Yeah, this is nice. So after that, I just kind of built up the cash. And then until I started buying properties to hold. And it was at a time where financing was easy. So I got lucky on that.

And also, I'm assuming property was reasonably cheap. Like where in the U.S. were you investing in property? This was over there on the east coast right um so basically i mean homes were going for at that time um in the neighborhoods that i was buying a hundred thousand two hundred thousand three hundred thousand versus i know the the market in canada is kind of yeah it's just so it's so sad. Yeah. But yeah, yeah. I mean, and also the timing was right. It's just at a point where it was easy to get financing. I mean, because they were given loans left and right. Yeah.

And they were flipping the loans and selling it to the next investor. And I mean, it was crazy. And then look what happened. But that's a podcast. Yeah. But yeah, so I did that. And then, you know, I kind of got burnt out doing that. And I just decided to sell my entire portfolio. And then after that, I got into mobile home investing. The reason why is because having

a home and having a mortgage, it's really like it's a lot of pressure. Yeah. And the market was crashing and I wanted to sell these homes and get out of it. And, you know, someone has to cover the mortgage, especially if the homes are vacant. So basically, you know, it's not fun. So with mobile home investing, I'm a free and clear real estate investor now. Okay. So yeah, I'm very curious about like what, what it means to be a mobile home investor. What goes into that? Let's like, yeah, you explain it to me. Cause I'm just like,

what does that mean exactly? Sure. Sure. Well, I had an opportunity to actually get into mobile home investing back when I started my real estate investing career. But like a lot of new people starting out, I had one bad experience and I said, well, that's not for me. You know, and then so, you know, I decided I stayed in the single family home market for the next about mobile homes and had a different perspective because I had experience. And so I tried to do it again, and yes, it was hard. I visited 200 communities in the beginning. It took me almost a year to do my first deal as a mobile home investor. And it hasn't been easy. You know, I mean, it's, I mean, you can, you hear in the books and the courses, they make it sound so easy.

They get to the point where like, I put the deal together and then this is what happened. But they don't talk about what happened before the deal. Exactly. Leading up to that. And it's tough. It is tough. And it's one of those things where you really have to make the decision that this is what you're going to do or give yourself a kind of deadline. I mean, it could be years. It could be months. It could be years. You could get lucky, but you don't know. But what really attracted me to mobile home investing was that you can get into a deal for relatively a smaller amount of money than a single family home. My first deal, it was my first deal.

I bought the home. They were asking, I think they were asking something like $5,000 for the home, which I know for you, you were like, whoa. Damn, I should buy a bunch of those. Yeah, exactly, exactly. And then I negotiated them down to $3, whoa. Damn. I should buy a bunch of those. Yeah, exactly. Exactly. And then I negotiated them down to $3,600. Wow. And, you know, then I resold the home. I got this family came in, a nice starter family. They gave me $1,000 to move in.

And then I got $250 a month for four and a half years. Oh, okay. And that was my first deal. And I was like, I can do this. So you don't have to worry about where they you're just responsible for the actual mobile home, not like the land that it's on. No, basically, I work in communities. And there's a rent for the communities for the home to sit on. And I make that the responsibility of the residents who are living in the homes. Like you have to, you know, make sure that you pay this. Now I have a deal with

the park management. If they don't pay it, then I'll bring it up current. And they're just like, that's fine. You know, we know you. And again, that's networking and you have to build the relationship and the trust and all that. But it took me almost a year to do that deal. Yeah, wow. Yeah. But like I said, it's, it's a lot of work. And I'm not, you know, I'm not, I'm going to be honest, you know, I didn't have a social life in the beginning, just like college, I lost some friendships, because I couldn't make all the events. And I remember it was like one of the times I was so tired. It was like eight o'clock at night. I had just been with the plumber and one of the mobile home communities. We had a leak. And my friends were like, come on, come on, you got to get out

and you haven't done anything. And let's go to dinner at least. And I went to dinner. And I was so exhausted. My head almost fell on a plate of spaghetti. Oh, no. So it was just one of those things where I had to give up some of the things that, you know, normal people have, like a social life, to get to where I am. You know, it's not like, oh, yeah, I can do this and this and have it all. Yeah, so you can't really have it all. And that's definitely kind of the similar sentiments that I've gotten from other people who are really passionate about their business or entrepreneurs. It's like you do have to make some sacrifices in order to kind of – for that – to possibly gain a big reward. Yes, exactly. And even now, I mean I'm finding a lot of my friends after college, they went on to grad school.

They became attorneys or investment bankers, and they were like, Rachel, you just work too much. I mean seriously, I do work seven days a week, but it's meaningful work, and it's just not the mobile home investing I do. I'm an author, so I write books as well too. So it's one of those things where I like to work, but I want to do meaningful work and not all work is bad. No. And if you're enjoying, if it's, you know, you're working for yourself, it's your own business, you're obviously going to be a bit more passionate about it and put those extra hours in because it's, it's you, you're, it's on you. Absolutely. So yeah, you mentioned your book. I'd like to kind of talk about that because it seemed really interesting. What, what kind of

inspired you to start the book and what's it about? Okay, I think you're talking about the first book, the Adventures in Mobile Homes, right? How I got started. Basically, Adventures in Mobile Homes, it's basically how I got started in mobile home investing and how you can too. But I mean, it's a primer on if anyone out there is interested on what steps that I took and my experiences. And if you want to do the same thing and learn about the mobile home investing niche, it's all there in the book. I've got chapters on how to get started, how to find buyers, communities. I have sample forms. Oh, that sounds amazing. Because I find lots of

books that you're like, all right, I just want to know what tools I need to do this, you know, whatever. And sometimes you read the whole book, you're like, I still don't think I know. So it sounds great that you're like, this is what you do. Right. I mean, it's a good book for anyone who wants to learn about the niche of mobile homes. It is a how to book. So I mean, it's a lot of like, how wants to learn about the niche of mobile homes. It is a how-to book. So, I mean, it's a lot of like how do you get started? How do you find deals? How do you meet – talk with sellers?

How do you negotiate? And it was my first book, and I'm really proud of it. I have a second book, which this was the book I really wanted to write. And it's more about real estate investing. But I mean, the first book is about if you want to learn about mobile home investing. Specifically, yeah. And the second book, I love the title of it. What's it called again?

It's called Real Estate Investing Sucks. How to Change and Find Success as a Real Estate Investor. Love it. And this book is the book I've always wanted to write. It's about business. And basically, it's about all the mistakes that I made as a real estate investor and how I got through them. Because I see so many real estate investors, they stop and start, they stop and start, something changes. And for some reason, they may not go into real estate investing anymore, or they may wait a couple years to go into it. So basically, this book is about just kind of trying to get through the tough times and what you can do about it and how I did it, and that's basically what it is.

What do you – in your experience, what was kind of the biggest mistake or failure that kind of happened to you while you were still kind of getting into real estate investing and learning? That is a great question, Jessica. It was probably because you get into, you know, you read the forums, you read all the articles, and you want to do what everyone else is doing. And that's what – Yeah, and you want to do it right. And so you're like, okay. Yeah, exactly. And I did all the different marketing techniques and it's in my book.

And what I learned was that going in, you really need to know yourself first instead of trying to do what what's worked for everyone else, because what works for someone else may not work for you because your personalities are different. One of the things I tried was direct mail and I I was I was a failure at it. Because I hate administrative work. I mean, yeah, I'm a writer. I'm an author. I love to write, but I don't want to be like scanning documents in and, you know, I mean, it's administrative work, stuff like that. I don't want to do the like, mail out 1000 mail. No, that sounds terrible. And licking envelopes. But some people, they like doing that. And they're like, oh, I love doing this. You know, I've got everything organized.

And, you know, it's all ready to go, my mail pieces. And I did that. And it was a fair, I even hired people to do it. I even filled out that. So, I mean, it's in the book, so. Fair enough. Kind of looking forward, because you've been in the game for, how years, did you say you've been in kind of the real estate game? It's been over a decade.

I started. Oh, wow. Yeah. So looking kind of towards the future, what do you hope to achieve? Or is there something different that you want to kind of try out? Well, I've been doing the mobile home investing in the communities, which has worked. And it's great. But the thing about working in communities is that there's always – I've been through so many management changes and so many companies buying these communities. And there's always a change in management or ownership, and I'm going through that now with one community.

And they're like, that's cool. You could still do business here, blah, blah, blah. But every time there's a change, there's different rules. I meet, I meet, it could be a new manager, new maintenance staff. And there's all these changes that, you know, anytime something could happen where it just doesn't work for my business anymore because I don't own the land, they own the land. And so my next step is to actually look into buying some land and either buying lots or land and having my own community and going from there so that I have more control. Totally. It seems like a natural next step for sure. Yeah.

I mean that's the stuff on the real estate side, just to kind of stay within mobile homes. And what I love about mobile homes, and I forgot to mention is that it's mobile, so you can always move the home. Yes. Try doing that with single family, but it's, it's been great. I love it. And it's just what I love about mobile home investing is it's like a community. So you kind of know, everyone knows each other versus the other niches, like single family. There's so many people and, you know, so many different routes, but with the mobile home community, it's kind of a small community. People know each other. So it's kind of like more of a small town feel with the people I work with. So that's kind of nice. I enjoy it. So that's kind of where I'm going with that. And then

just writing more books. What do you think your next book will be about? My next book is coming out actually in a couple weeks. I'm just working. Oh, awesome. Yeah, I'll let you know. Yeah, I'll put that in the show notes so people can find out. waiting on the cover design, but it's basically on hiring people. And so that book is like what I've learned about real estate investing in any business too. It's really hard to find good and reliable and honest people to work for you. And I've got a lot of mistakes that I made that I'll

be sharing in that book. So if anyone wants to have a good laugh, check it out. Well, thank you so much for joining me on the show today. And I'll definitely include links to your books in case anyone is interested. I'm probably going to check it out. I've always been interested in real estate investing, but obviously living where I live, it's not the easiest. It's not the best time. Maybe in the next 10 years, it'll change.

I don't know. But we'll see what happens. But yeah, thank you so much for being on the show with me today. Great. Thanks for having me, Jessica. I had fun. Thank you so much for listening to episode 26 of the Mo Money podcast. And to learn more about Rachel, mobile home investing, and to get your hands on

some of her eBooks that she's released. Make sure to check out my show notes at momoneymohouses.com slash 26. And of course, to find out all of the show notes and episodes I've done up until now, just check out momoneymohouses.com slash podcast. Thanks again for listening and I will see you here next Wednesday. This podcast is distributed by the Women in Media Podcast Network. Find out more at womeninmedia.network.