Jim at Bargaineering made a post about this really cool and addicting Flash game called Mansion: Impossible.
The object is to buy the £10 million mansion as quickly as possible. You start with £100,000. Houses pop on to the market — literally, as in whack-a-mole style — and you proceed to “flip” your way to fame and fortune by buying low and selling high. Playing it is its own explanation. It's a cute game. Try it!
Did you try it? If so, the rest of the post is about the game.
For as simple a game as it is, learning how to play the game reasonably well (getting the mansion consistently in under 17 months) uses some real-life real-estate investing strategy:
- Buy at a discount. The good price predictably occurs right when the house “pops” on the market. This isn't always the case in real life, but if you can find opportunities that other people don't, deals pop up, for you.
- Sell at the right time. This is true of any investment — especially true when flipping real estate.
- Know your market. Did you notice that some of the cheap blocks were generally more expensive than other cheap blocks? Knowing this gives you an edge regarding potential upside of any given deal. Is it a favorable location? That helps with the price.
- Sometimes the opportunities don't appear immediately. Sometimes it takes a while to find a suitable property at a suitable price. Sometimes when playing the game I needed to wait three game years or more for a property that I could afford to pop up.
- Sometimes you might sell far from the top to take advantage of another opportunity. This game has no commissions, but it's often a good strategy to sell even when the price of the property is still going up because there's another, more valuable property to buy. This is a trick that's useful at the beginning of the game to get enough cash to buy the medium houses.
- Getting the brass ring requires bigger risk. Sure, you can keep buying the cheap properties well after you can afford to buy the bigger ones, but to get the mansion in a reasonable period of time, you have to start flipping bigger houses.
- But don't forget the little deals. They help, too.
- Learn to sense the peak. There are signals that the market is peaking. (Aren't we getting a lot now? :)) You don't have to wait for the up arrow to change to a down arrow to sense that the top is near.
As I mentioned before, there are some shortcomings of the game — like no real-estate commissions, predictable peaks, always rising prices when the houses hit the market, etc. But for a cartoonish flash game, it captures a fair bit of the essence of real estate investing.
