Best Bang for Your Invest/Time Buck


#1

Best Bang for Your Invest/Time Buck

What business or invest do you think is the best bang for your buck?
Example:

  1. On a chalk board you draw a 3 foot line from left to right
  2. You make 10 vertical lines that intersect to the 3 foot line
    |----------|----------|----------|----------|----------|----------|----------|----------|----------|
  3. On the left side of the line you write the lowest pay worst way you can make money
  4. On the right side of the line you write the easiest or best way you can make money

On the left you may have working for someone digging a ditch all day in the hot sun for 3 or 4 dollars an hour with no benefits and on the right you may have 3 million in the bank and you are living off the interest.

So now that you have this line where do you think that the billboard business falls in?


#2

That’s a good question. Alot of it depends on how good you are at it, and how fertile your market is. Particularly flipping leases, for the time invested, it would have to be pretty far to the right, based on cash flow. But you would not be building any equity. If you were to build, own and operate the signs, it would have not that impressive cash flow while you are paying off the debt, and then explosive once you own them free and clear, or sell out.

Another measure that your line leaves off is how much you enjoy what you do. I enjoy the billboard business. I always have. I’d rather have fun and be at the middle of your line, than hate what I do and be on the right hand side. And there may be people who like to dig ditches (I’ve met some), so that graph is equally important.


#3

Frank, why do you enjoy the Billboard business?

“Another measure that your line leaves off is how much you enjoy what you do. I enjoy the billboard business. I always have”


#4

I like the win/win aspect [everybody is happy if you do it right, from landowner to advertiser], the continuity [you build one sign and it’s up for your whole life time normally] and the challenge [finding a legal location and finding the right advertiser for it].

In alot of business models, there is constant pressure of litigation or under-delivering. Billboards are very low pressure. Normally, everyone you work with is happy.


#5

Thank you for the reply Frank, that is great that you could own a business doing something that you like.

In one of your phone conversations you said that you loved the Billboard business but the reason that you are going to buy Mobile Home Park verses getting back into the Billboard Business, is because you can buy one mobile home park and have the same income as 10 billboards.

If a person does not have $50,000 to $100,000 for a down payment on a Mobile Home Park, do you think that it is best to start with billboards and then maybe move up to a mobile home park or other larger income producing asset? Example: storage buildings, car wash, Apartment Complex, etc.


#6

John,

The mobile home park business is fairly capital intensive. It also requires obtaining a lot of debt. The billboard business can require no capital (flipping) a little capital (wooden signs) or a ton of capital (monopoles) – but at least you have a choice.

I would probably have stayed in the billboard business if I had not been bought out. I jumped to mobile home parks at the time since one park is like having 100 small billboard faces. But it is a whole different animal and, to be honest, not as much fun.


#7

Good information,

I had looked at MH Parks about 5 years ago but felt bad for some of the people living there and did not want to be the person to have to evict them for no pay. Also, I feel sorry for people and would probably not make them pay rent.

In one of your phone conversations you said that you are a loner and would not have employees if you had the choice and I feel the exact same way.

Not that I have anything against people but I do not like hierarchies and do not want to be responsible for creating them.

To me it would seem that it would be better for 5 different people to own 5 different billboards in a given location then to have one big company owning all the billboards. Decentralization seems like it gives more liberty to the individual.


#8

You are correct that mobile home parks are not a “happy” business. It is actually a very sad business, with a lot of evictions and problems.

There are actually some efficiencies in owning multiple billboards. For example, if you trying to rent one sign on a road, why not try to rent three? Where the efficiencies end is when you become so large that nobody is accountable.


#9

Agreed!


#10

I am just getting started in the billboard business so I am unable to speak from much experience in this business but I am able to speak on the mobile home ownership\renting business. I started out buying one mobile home and renting it out, then I bought a second, a third and so on.

Renting mobile homes is full of problems not associated with renting billboards. When renting living space people generally do not take as much care of the rented property as they would if it were their property. You can plan on receiving calls 24\7 365 days a year for valid problems, such as water leaks, ac stopped cooling, washer won’t spin anymore to the less serious problems\complaints “The neighbor is playing their music too loud.” The neighbor’s dog keeps tearing into my trash", “The neighbor parks 1\2 their truck on my parking space”.

You won’t believe how many complaints and problems renters can come up with. Now I am not saying many problems are not valid and need to be addressed right away as a landlord such as low water pressure or a water leak; however, many problems are actually caused by the renter.

Then you have the ugly problems you and Frank mentioned such as evictions. Also you can plan on trips to the courthouse if the renter refuses to leave.

Frank can attest to the problems and hassles associated with renting billboards but for me I look forward to having structures with individual clients that cannot break your property. Yes weather can damage the structures but I’d rather take my chances there than with people. With billboards the obligations seem to be much more hassle free for the owner. In the same token the mobile home rental business can be profitable just be prepared for allot of headaches.


#11

Yes, you’re 100% correct.