Fighting Rent Control and Owning 4000 Lots with Julio Jaramillo

INTRODUCTION:

Welcome to Episode 41 of the MHP Show podcast! In this episode, host Derek Vickers sits down with Julio Jaramillo, founder of Evergreen Communities, a company that owns and operates over 4000 mobile home park sites across 12 states. Julio shares his entrepreneurial journey and insights into the mobile home park industry.

KEY TAKEAWAYS:

• Julio's journey: From starting in accounting to becoming a successful real estate investor in mobile home parks, Julio shares his experiences and lessons learned along the way.

• Value of mobile home parks: Julio emphasizes the importance of mobile home parks as both investment opportunities and solutions to housing needs, highlighting their potential for responsible ownership and long-term growth.

• Industry challenges: The conversation covers topics such as rent control, property management, and the need for creative solutions to improve communities and investments.

CONCLUSION:

In this engaging episode, listeners gain valuable insights into the mobile home park industry from Julio Jaramillo's extensive experience and expertise. Whether you're a seasoned investor or new to the industry, this episode offers valuable perspectives and lessons for navigating the mobile home park market.

WATCH IT IN YOUTUBE:

TRANSCRIPTION:

[Music]

00:06

hello everyone welcome back to the MHP Show podcast I'm your host Derek Vickers on the MHP show we talk about anything and everything that has to do with mobile home parks operations Acquisitions crazy stories crazy things that people have seen in mobile home parks crazy things that happen because I feel like every guest that that I get on I hear a crazier story and that's just what you get with this business and so we talk about that stuff here on the MHP show and before we get started today I want you guys to go check out my site

00:38

it's Derek vicks.com masterclass weinar it's a free webinar on Mobile Home Park investing it'll take you through the basics all the way up to more advanced underwriting than mobile home parks and so you could literally learn everything you need to know to go and get your first deal or even touch up on your skills just from taking a look at that webinar it's about an hour long so check it out it's D ER vicks.

01:02

com masterclass webinar so today I have another guest on Mr Julio Haro how'd I do that was good that was good okay okay I I so I took some Spanish in high school you know so I know some words I bet if I went and spoke it for a couple months I'd probably be able to uh speak it decently but um welcome to the show Julio thanks thanks for having me looking forward to it and uh you know what love to share my story and my experience and been in the business many many years so uh H happy happy to be here yeah for sure for sure and so

01:40

you're you're the founder of Evergreen communities you guys have over 4,000 sites is that correct that is correct yep and how and you're in 12 States yes got it absolutely yeah so so that's awesome man and so I like to so getting to that point where you are now so was there an initial entrepreneurial Journey that you went on before real estate investing uh absolutely yeah so I I actually have started in this business right out of college I was at UCLA here in here in LA and um picked up an accounting job for the Carlile group and

02:18

this isn't the hedge fund this is Ron singer uh here out of Beverly Hills and was was I studying aerospace engineering if you can believe it and and uh decided like H I don't want to work just strictly in the defense industry and went into accounting picked up this job here and went to work for Ron just entry level accounts payable and learned the business from the ground up and that was in in 1989 if you can believe it and uh you know Ron taught me the business how it worked he you know saw what he what

02:53

he had what he had built and he and I was like what you know what is this trailer parks what is this garbage and you know next thing I knew I realized like hey this is a great great investment for from the investor side and it's a and and then from the responsible owner side this is this is a good solution to our housing needs and everything else that came along with it so um you know we spent 11 years there became the CFO controller then the CFO and um director of Acquisitions and I really had no urgency or desire to be an

03:27

entrepreneur I I sort of fell into it and in 99 now Flash Forward you know 11 years later 99 was the.com boom I was 29 you know all these all these people were getting the new PT Cruiser at the time with the people that worked for pets.com and all this you know us young guys are seeing all that and you know we we had we had um met with Ron on on some Equity ownership stuff and and it it was going to be complicated and and you know he said hey guys um you know you you can run this out of a out of a he'd say back

04:01

then out of a uh a phone booth you know back you know when we used to have the old phone boots and he you can run you can run this out of a phone booth you know go go do your own thing so um it it I really went from a I went from a sixf figure CFO salary to zero overnight I mean I was just like oh [ __ ] I got to go out and build this before I start a family and and get married and and um I figured hey that this is the time to take the risk and I pulled out I had 401K so you know some of the some of the newer younger guys starting out you you

04:34

you got to start setting up those reserves and so cash out my 401k you know unfortunately at the time but it was like this this is my shot and and then started Evergreen B bought my first property up in Syracuse New York it was a 100 space little beater uh got seller financing and just sort of went for it and you know I I know a lot of people think you know what what's it take what do you got to have how many connections you have to have I I had none of that and you just got to take it one step at a time and and I did everything I was

05:08

doing before I went out to the property I walked the property I looked at the area I looked what was going on I looked at the fundamentals um and and then said all right I'm going to give this a go and and got some investors some you know I had to raise 200 grand for that first little property and uh you know got some investors and they you know most of them were like right Julio I I don't know anything about this stuff but I I know you know I know who you are I know I can trust you I know you're a smart guy and

05:38

you're you're you're going to put your whole life into this so they just they just went for it and and it did well my first deal I was Cash on cash I was you know quarterly distributions of 177% returns and and then wow you know the guys were like all right when are we doing the next one and then I bought my second and third deal in New York and then and then started spreading out over the years so um it you know for the for the how do you become an entrepreneur it's it's basically just doing the right

06:09

things and you know taking your time the the the little decision stuff I learned from Ron singer was you know you just got to be right 51% of the time he would tell me and uh you know and those things are true you ju you just got to go and look at it longterm you know some of these people come in and they make these outrageous models and they think I got to get this kind of return and go jack up rents 200 bucks and that you're undermining your whole asset and everything you're doing to satisfy a greedy partner or investor or whoever it

06:41

is so so you know my my my uh advice for the for the new group and the young guys and the is this is this is a long road I'm now you know evergreen's 25 years old um been in this business 35 years and this you know this starts to snowball and and you just do it take care of the proper and you don't need a lot you know these people oh I need to have 40 50,000 spaces I don't want I don't want 30,000 spaces I'm happy with four we pick up one or two deals a year we take care of them we we manage them

07:13

we're Hands-On we walk the properties I go out and see them myself and and you gotta you got to get down there in the in in the dirt with your managers I I was out there we had a home being delivered and and I think I put it on my LinkedIn and and we there was a mound of dirt still on there the home came 2 days early and my manager's down there clearing traffic and I'm I'm Shoveling dirt to get it off the site so the home could come in so yeah you you you gotta get oh I went to Yale or I got this or I

07:42

worked for Blackstone I don't give a [ __ ] yeah th this is your investment buddy and you got to get in there and take care of it so that's a little bit of of my background and entry into it and and now I you know I love it and we'll talk more about it yeah for sure well dude that's that's an awesome Story and there's I I was taking notes here because I'm like man there's a so many things that we can unpack from that and and the first one like so you went from a sixf figure job to zero

08:11

overnight now you know I I think you know typical in society it would take a lot for someone to do that and so what was going through your mind that night or day when you made that decision to like hey I'm going from this you know I'm making six figures I'm doing seemingly well you're you're in California though so I don't yeah but yeah but that was that was in 99 so the six figures was still pretty decent but yeah you're right okay yeah because I mean I when I was out there I'm like I

08:42

don't know how like you have to make at least 150 200 plus to even like be sort of comfortable out here but anyway so what was going through your head that night did you have like you know the the the the bad side of you talking saying don't do it or what was that like oh yeah no I I I uh it's funny because I I remember that night vividly and I remember laying on my couch and thinking holy [ __ ] what have I done like what the hell's gonna happen but um I mean I think the the good thing is I knew I can

09:16

replace that job I'm like hey I I I'm I have an accounting degree I'm smart I know what I I you know I know I can get in there and go get another job maybe take a small pay cut until I show and prove myself but I was like I'm going to give myself six months and you know and I got I got my reserves the the other thing is some these people Liv lean man you don't you don't need the the portion the Ferrari right now you know when you're starting out I was live in lean I just bought my house and I was like okay

09:46

I got a mortgage I got these expenses and it's this amount per month and let's say was at the time it's like five grand a month and and I got 60 Grand to parked away I'm going to or or it was it was less it was like 30 I I was like okay I got six months I'm going to give this a shot if not I'm going back into the labor force and uh and then and then yeah definitely fear and panic and but then it just makes you it just makes you hustle and and it's like you know I remember that first deal we closed in

10:14

December in the snow up there in Syracuse and you know I'm from sunny California and I was I was in there doing due diligence sitting in a bar you know going over the these handwritten spreadsheets from a seller and you know check in the rents and and I was like hey this isn't this isn't rocket science you know it's it's addition subtraction and and percentages it wasn't derivatives and you know calculus that I was doing at prior to UCLA I was at Caltech so I was like all right I can

10:46

handle this and and then um and then and then yeah you're gonna you're gonna pardon the EXP you're gonna [ __ ] your pants you're going to be worried you're going to think I can't do it you're going to fail you're going to have some failures and some losers users but it it's just having that that ability to say all right I can keep doing this I can keep doing this until you know until it happens yeah for sure and I I mean it it's really like a it's like a Viewpoint

11:13

that you have to like you know constantly say hey I can do this when you get those doubts in your head you know and I still feel like it happens if we're closing something or working on the deal I still get some doubts and you know in this business there's going to be something you don't like about the property I mean it's just inevitable and you know sometimes I still have those things coming to my head and you just have to have that Viewpoint like no we can get this done we've done it before have been

11:39

successful in these other things you just got to have that that Viewpoint and so I think that's great for our listeners um to hear because you know you just got to prepare for those doubts and you know they're coming you know they're coming because I you know people in in my group in my um Inner Circle program some of them are still working nine to five jobs and they have that app apprehension of going over fulltime and um it's always good for for everyone to hear about people who who did that um yeah and and be I'll just

12:11

elaborate on that before you go to the next question is uh the and a lot of things like you know take the knowledge from others like you said that have lived it that have done it and you know I still remember back things again that I learned from Ron singer and we we'd go into meetings with GE Capital and some you know some sellers that were and uh you know and I was young and intimidated and you know Ron would be hey Julio those guys put their pants on one leg at a time just like you and I do you know and I remember that I was like

12:39

I don't care if it's Jeff Bezos or whoever the hell you're dealing with they put their pants on one leg at a time like you and I they get up in the morning they have uh later I I saw one of your posts about working with partners and all that I have something I use now is you have eight8 to 10 working hours a day I don't care how smart you are how badass You Think You Are you have 8 to 10 working freaking hours a day so you better use those wisely you better share you better delegate you better not think you have all the

13:08

answers and then the other one he used to tell me was you know we'd go and we'd buy a a one two3 million deal and then and then we look at a 20 $30 million deal and he'd say that's just another zero it's just it's it's the same process you're going to get the same loan loan to value you're going to do this it's just another zero at the end and so he he he taught me a lot of things that gave me confidence he' he'd say Stu don't worry about the money if the deal is great the money will find

13:35

you don't wor you know and and so I followed a lot of those things said all right let's let's do it and and uh you know nine nine times out of 10 they're not going to tell you all the bad stuff you're gonna hit and you're GNA hit it but um you just you just gotta you got to get that that that tough skin and say all right I'm rolling rolling back into this yeah yeah for sure you you definitely have to I love that what what he had told you about the deals because you're right the the process is the same

14:01

on a $1 million deal as it is on the $15 million deal it's just more zeros on the num for sure exactly the the other thing I wanted to touch on is that and so you C you you talked about cashing out your 401K like did you cash it out to zero uh I did I did at the time yeah unfortunately uh you know I had to pay the penalty and the whole thing but it was it was my my my sort of my desperation move and and you know now you know 25 years later was it was the best decision of my life so yeah some sometimes the things you know

14:37

you you you can't look at them in a vacuum you got to look at it and say all right here here's what I got to do and and you know see what's what's worth it yeah for sure because you know and I resonate with that because so my first deal I got in I was an operating partner and I got equity for doing the Dirty Works and none of my personal money was in because I didn't have any but in the insurance business that coming year I got a Bonus and so I think I had like a 100 Grand a little bit over a 100

15:03

Grand and we were closing on four deals that I had found and I literally took the entire amount in my savings account wired it in without any apprehension at all because I knew that this was going to work I knew these deals were were home run deals and obviously easy to bring Partners in at that point because like look guys I went to zero kind of like you like your partners are like Julia like we see that you're invested in these things and I'm like you know it's funny when people ask am I invested

15:34

in stuff absolutely you know my entire net worth is in is in mobile home parks I believe in the asset class and but I I guess my question is was there some apprehension to to doing that where you like oh my gosh like this is my Nest Egg I'm going all in now uh yeah yeah yeah no good question it it was but like you said you know when when you have no other choice and you believe in it you know I I was lucky to have worked and and saw what Ron built and you know he had a home in Beverly Hills and up in Belair and all

16:05

this and and and he's like this is just this is just a widget and this is just land you we're we're basically holding land and these tenants are are are paying down this land for us is how you got to look at it and you got to take care of that and you got to take care of those residents and so so you know I saw like this this works and you know if if you buy in the right places you take care of the property um you know it isn't it isn't just what some people think you know I'll put it on autopilot

16:32

mailbox money uh you know they it is it's a lot more than that as you and I know I mean we've got sewer plants and wellwater and contamination and U but you you just got to take it you know one step at a time one decision at a time and then and then you amalgamate all those and that's what's going to be a great career and a great Nest Egg like you mentioned so so yeah I I was definitely worried about it they're going to be worried about it and there's there's other ways to do it I have later

16:58

we'll talk about some some joint ventures and partners that I've done now and I have a I have a guy who still um is is you know has a family and is in his 9 to-5 but found a property and brought me in with them we we we joint ventured it and we gave him Equity he brought the property we're running it he's doing stuff with it on his off time and and getting his feet wet and then eventually he's going to make the transition from a from the 9 to5 so there's different ways to do it you don't have to go to zero but um but you

17:28

know just know that you know at some point whether and it's not for everybody some people like that stability of a career and some people want hey I don't want those golden handcuffs because I want to be able to chart my own you know future so yeah yeah no that's great and I mean I think that's good for people to know because yes you know like if you so one thing about it and and you kind of touched on this earlier like when you do go to zero or quit that 9-to-5 job it does bring up that in the necessity level a little bit

18:00

you know necessity is the mother of all invention or whatever that quote is someone said that yeah um it's true because when you're backs against the wall you're going to do things that you weren't doing before you know the apprehension goes away because you have to figure it out at this point and sometimes I think if you can create that necessity it can Propel Propel you to to the heights that you never thought were possible before and so um it sounds like you did that um you're right you don't

18:31

have to do it like that but just know that crazy things can happen and you can create a lot of stuff if you do do something like that absolutely yeah and and and anyone can do when I when the people out there anybody can do it there's no there's no again uh you know I'm I'm I'm not smart enough I don't have enough money I don't I don't have a network of of Rich you know California investors neither did I and and that's why you know we'll we'll go into later when when we we talk about some of my

19:00

background and and why I I speak up for our great free enterprise and country is like anybody can do it I mean my you know I go speak to my high school and and set up a a scholarship for the kids because there's just so much nonsense in the media and you know stupidity about this oh you got to have this privilege or you got to be this and you gotta that and I go up there and I stand and I say look my name is Julio Haram it's not John Smith I'm Not 65 with blonde hair and blue eyes I'm 56 with you know

19:29

Hispanic alol was born in medene Colombia and this is the [  ] greatest country in the world you dump bucks if if if you want if you want to start attacking it you're you're a dumb [  ] why do you think people are flying flocking to get in here so I go over there and just I I get pissed I get pissed because I'm like you stupid do you not see it so um so that that's why I go and and share that because to me it it's silly how how it how how easy it is and how great our system is set up to

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succeed if if you if you take care of of all your stakeholders if you're going to go in there and think you're going to be a pig and and just you know but I I I hope your where your uh podcast I like to cuss because it's just so dude I I I do it all the time on here so good yeah if you're going to go and just [ __ ] on your tenants and think you're GNA oh these guys can't go anywhere and I can screw them and just drive them into misery you're you're again you're a dumbass because those are the ones that

20:25

are paying your your investors those are the ones that are paying your man those are the ones that are paying you so you got to take care of those people and you got to do it right and you got to bring them to Market methodically that that I don't care if you're $2 $300 under Market they've been living on that budget paycheck to paycheck or social security or whatever they're paying you and they can't absorb a 200% increase I I don't care who you are who you think you are even if everything around you

20:50

isn't you got to get there gradually you got to get there through through vacancy you know a a turnover and bring people to Market but anyway so my my my point so I'm saying to all these people is you know the the only the only fear is is you is you and your own insecurities and I had them and I have them believe me and and then but you just got to go out there and say all right hey the worst thing I can do is work my butt off and and and if I fail then I'll go work my butt off for somebody else and and

21:21

they're going to need me because we all know just just hiring managers maintenance people good people to work is already tough as it is so if you're willing to work and do it for yourself you know nine times out of 10 you'll be successful yeah absolutely and I couldn't agree with you more and especially on the thing you know like you you came to this country you threw all your excuses to the side you didn't blame anybody else for problems you didn't blame you know and it's interesting how this like entitlement

21:51

mentality has sort of morphed and came in more so over the years and it's just a switch in Viewpoint like you either have the guy who takes responsibility for his for what situation is he that he's in and goes out and changes it or the person who doesn't and says oh it's someone else's fault and unfortunately I think the numbers of people saying it's someone else's fault now are are more unfortunately but people don't understand when they say that that takes you out of out of the position of

22:21

self-determinism responsibility and it takes away your own power because you're just giving it to someone else and um you you obviously are you know you've came and you've done that you're a great example of the American dream and I just I I commend you for that and and and I love it I love it thank you thank you no and and that and that's why I you know and you you mentioned earlier and we'll we'll talk about it you know speaking at the city councils and all that is yeah I'm gonna

22:49

show it I'm gonna show it okay show it and then we'll talk about it yeah yeah I'm going to show it so this let's let's just go to this little video and you have to let me know I'll make sure the the sound is g to share here just give me a thumbs up if you can hear the sound Julio when I started here okay good evening vice mayor council members my name is Julio har um I spoke here before on RI control and I wanted to speak tonight just to expose the hypocrisy of the city in this Council so

23:24

I made a I made a little graph hopefully so our our constituents can see it we we we talked tonight here about equality and I want the constituents to know that the owners landlords and people who have succeeded or held on to their property in Burbank are being proposed and they're working on a rent control of 5% limitedness here at 5% which California already has an 8% which we know uh limit on rents but when the city Burbank Water and Power and uh comrade Constantine straight out of his social straight out

23:57

of his social Playbook when they need their money they're going to give you a 20% increase over two years approximately 20% increase and they're not considering the riders that are on strike and not making any money they're not considering tightening their belt because they don't have to because it's not their money but when the owners who no longer have insurance companies I hope you heard State Farm and um I believe it's Allied or All State have stopped writing policies in California

24:27

well guess what in your four page pamphlet that you have hidden in here it said well the water department needs it because of rising operating expenses I you meal like the owners didn't have those same Rising operating expenses but you want to limit what they can charge to again hurt the renters because now you're actually going directly into the renters Pockets because they're going to pay the same 20% uh increase over two years that the owners have paid so it it's just it's just hypocrit critical

24:58

and I think the residents of Burbank that got Bamboozled into voting for the Socialist agenda need to know that you're driving this bus right down the same path uh absent uh mayor Constantine from Oakland same path that San Francisco's going commandante Perez stay pass to Central America Colombia Venezuela Kuba do you want me to remind you and why don't you ask our neighbors from Russian Armenia who've lived under Soviet socialism where this leads so you're doing right now there's there's

25:29

one set of rules for you guys and another set of rules for the owners we're going to cap you I don't care if your operating expenses are going up if you got to pay your electrician your roofer your janitor more to come do the job you're only getting a 5% cap but we got to eat and you guys get the scraps we got to eat our steak and get our 20% increase over two years so let it be known it's a disgrace it's hypocritical and it's as we say in in colia SAS thank you and again God bless Burbank United

26:00

States of America and quit trying to turn this into a socialist republic thank you very much boom and dude first of all first of all I want to say how that's just [  ] awesome like because you're calling them out on their [  ] and you know the the interesting thing and so I I I know a guy he's Cuban and we somehow got on the topic of some of the stuff that we were referring to about entitled people and stuff and he's like these people don't [ __ ] know like I live there yeah I live there

26:40

right yeah and it's not good yep and I I just love that you're standing up for that and I don't know how you live in California dude and then I'll you can comment but man you live in California yeah yeah no I I get that all the time and uh yeah like I said other than this amazing weather and and and mountain biking that I do I mean I have a friend who moved to Florida you mentioned and he's like man I'm riding my bike but there's no Hills it's all flat so uh but no I mean I personally I I I think it's

27:12

my responsibility to do it I mean I I I tell people and i' and I've done a couple of those other ones and like I'm a I'm a guest in this country I appreciate it I came here legally and this country opened up its you know its system to let me work at employ people develop a portfolio and uh and the beauty is all of that I didn't prepare a speech but it's it's all very calculated that I I throw in the Spanish I throw all of that that's all very calculated so they can't come up with this oh what

27:46

are you some kind of a of a racist right-wing Republican yeah then I'll answer them in Spanish uh and then so so they can't use that against me and you you you didn't see the stuff that happened before me but that was in June during during um LGBT Pride week so sitting in in that when I was speaking there to the left of me there was there was a gal in blue hair and it was a big LGBT pride and then the one next to me next to her was a was someone from the trans community so it was great they honored them and and that's why I said

28:18

well we talked here about equality but you're treating us owners like like we're we're we're dog poop and um so no I I mean I I think it's like you said and i' and I've seen it I've traveled all over the world on my bike we we go I I have friends from Venezuela we ride our bikes in Colombia and and I've met many people they they've had three over three now close to five million Venezuelans come into Columbia as they're all now coming here you probably know um and and these people my my buddy

28:50

just to give you one quick example my buddy um the karacas Venezuela the capital Venezuela was was the strongest economy in Latin America uh the oil money everything then the then the Socialist came in uh and they destroyed it and then so my buddy his wife her mom was dying and and she died but she she's in the kakas hospital he went to visit her and he said Julio this was the this was the Mayo Clinic of of of of of the US the karacus hospital was he said we were there the power would go on and off there was no power she had the [ __ ] in

29:26

my my mother law he was telling me my buddy Randy had a [  ] in a bucket there were cockroaches running around they have destroyed everything and the the this this fallacy and there there you know our youth and everything you talk about it's all calculated they want them to feel all oh I'm oppressed I'm this so they can sit back okay here let me give you some scraps take care of you and keep voting for me because you know we're going to keep manipulating you into this [  ] that doesn't work you

29:53

know so anyway I I have a passion for it I'm not afraid to speak about it someone doesn't like me for it adios I don't give a [ __ ] uh but um my my belief in in you know I grew up under Reagan Reaganomics and the free market and the minute the government comes to your door and says to help you you got to run or or pull out your shotgun uh but uh you know that it it it doesn't work I see it everywhere I mean I go to the Post Office it's it's it's it's inefficient I go to the DMV it's inefficient I go

30:26

everything I see deals with the government it's just it's not anything about politics or party or red or blue you just got to understand when there's no incentive and you're going to get the same you know salary and you're going to get the same pension and the the the the longer you drag out the work the more you know everything our Cal Trans here anything that's government run does not work so you know you just you just got to realize that and and that you know so that that's a passion of mine and and

30:57

I'll continue to keep fighting for us uh red blooded Americans and the people here don't don't appreciate and realize what they have I mean this this whole system and this great experiment and and you know the the why so many people from 150 people clamoring at the border and they they you know I mean that's a disaster and and I wasn't born here I'm like no you got to shut the down you want to come in you come in properly the right way and you know when we need this many workers okay come on in because we

31:25

we have a declining population and if you know economics okay we need workers but come in this way we're going to vet you you're going to do it right and then happy to have you let's go participate contribute to the process and so uh yeah so that that's that's a huge passion of mine and and I see it I a lot of that I learned through the mobile home parks and seeing it in this great country uh and I encourage the young people I go to all these states we just bought something in North Carolina and I go and

31:50

uh you know meet meet great people who you know and every everybody's treated me well nobody like oh you discriminate you get one or two idiots who doesn't like you like who cares how many people you expect everybody to like you I mean and so so anyway it's it's a it's a big passion of mine and and I'll keep fighting yeah dude well we keep fighting because I mean I mean it's awesome and it needs to be done because you know and I I don't know like it seems like from my observation

32:22

that you know they're just you know it's the Frog boiling in water they they do it slowly over time and no one notices and the more that they you know spout this agenda on everyone it's like you know and during covid I feel like they stepped up the totalitarianism we just need more people actually talking about it because before we know it dude I mean and some people may say this is drastic but we may look up in a number of years and be like damn dude like we can't do anything if I say something wrong on

33:10

Instagram I can't go spend money because my our money's All Digital now and they just turn me off yeah yeah yeah I no it can get to that very easily so it's scary and people do need to be made aware of it and quit getting into these these two camps I I I tell the I tell the that at the high schools and and this is here in Burbank there's a big Armenian community and Hispanic community and and Jewish community and black community and I I tell them all like I like you all get into all your little groups and all that you're you're

33:39

you're you're pathetic I I think I said you think if I only relied on Colombians and just kept in my little circle I I I I I wouldn't have a $350 million company okay my my my first investor was Jewish my my cfo's Armenian my my some of my my best friend Sean Miller who I grew up with and and and trusted me in his first deal is as white as snow can be and and a great loving American and and has treated me like a brother since we were in first grade so if you're going to keep getting into

34:10

your camps and now they have these things on oh you know Hispanic only graduations or black only like were you stupid I mean it it so if if you're letting yourself you think they can put you all of our as diverse and different as we are into two little buckets of thought you you're you've falling right into their stupid trap because it's it's pathetic so uh yeah I mean I encourage everybody out there to just you you got to fight this I again I don't care what party you are or what you are you you just gotta fight fight

34:39

the madness yeah yeah for sure for sure and when you went into that um the town hall meeting or the city council meeting like did did anybody come up to you afterwards and they're like great [ __ ] job Julio I've been waiting some for someone to say that yeah oh yeah no the the first one when I did I mean they were cheering and and they were like man I one one guy came up to me and he goes I I work here in in the in the movie industry and he said I I can't even tell anybody that I'm conservative or that I

35:08

have these thoughts and you know I I'd be blacklisted he goes I I've been I've been wanting to say this and share this with my kids and I I'm like well you you you don't you don't need to do it destructive you don't need to be hating them my my best friends that I ride bikes with and many of my great investors and even my Colombian buddy communities are all very liberal and and I and I get them and and I and I I'm you know there's certain things that that that I I have liberal thoughts I mean I

35:36

don't I don't care what color race size who you love I a give a crap show up let's get the job done and let's kick ass and that that's all I care about so but uh the you know is is just going and talking to people and letting them know hey I care about you too I love this but do you see this is hurting you too even you know when when when they when they and and and I say that and and it's it's so destructive because you can't keep isolating all these groups and then it's

36:05

happening right now you I remember telling my brothers and my family like you can't plate all these different groups oh we're you know black lives matter and Hispanics and this and that and and and all of a sudden you're going to have a group that they're contradicting oh you're supposed to support the Jews but now oh what about the the Arab community and and now you're so what are you going to do how you going to handle this and so it's all [ __ ] it's all it's all crap it's all

36:29

part of their plan keep us all a mess and and worried about dumb things like that and closing down freeways protesting while while China and the rest of the world is eating Us Alive so yeah it's it's dumb yeah yeah for sure for sure and so I'm glad you know and I think me my personal opinion of this is that I don't think although America I believe has gotten a little bit you know more stupid in in many ways but I think there is still a vast majority of people that think the same way that we do like

37:03

they look at some of this stuff and they're like dude it's not right like it's just weird like you know the guy in the movie industry I guarantee you there's more people in the movie industry that he thinks that they're liberal right it's it's just that the media portrays like oh everyone thinks this way oh everyone thinks this way which is not the case in my opinion because as soon as you like start talking to someone and you touch on some of the things that we've talked about

37:29

here they're like oh yeah like me too I think this shit's [  ] [  ] yeah right so in my opinion I think it's a definitely a sensationalized you know belief system that's not as popular and far-reaching as is promoted in the media channels yeah no so true yeah so um but yeah so how often do you go do that uh you know it it it actually came up again out of out of Entrepreneurship and and and the as much as I do it and care about it I I bought a a management company here in in Burbank an opportunity a good networking

38:13

uh friend of mine a lady was retiring sold her management company and we're like okay let's buy it it's completely different from mobile homes completely different from Evergreen this was just a little side management company that g that had 900 units under management duplexes triplexes Apartments we're like oh we'll get a first look at some of these when they when they come up for sale and and uh so a lot of the owners we were managing were like hey they're trying to put rent control in there and

38:41

the the mayor you know he came up here and won somehow burbank's a fairly conservative City but um he's a young slick guy and came up and and you know it turns out he's a Democratic Socialist and and you know loves AOC and all this and I'm like what what who's this guy so uh I went to speak against this rent control and then you know in the first one you know I was telling him about just shooting him down on socialism like you I was like you you it sounds great you know socialism we're all we're all

39:10

equal and we're all this and like but that's not how life works because it it you know and and and I've lived in scene where where socialism has been put into place and it it doesn't work and everybody's equal everybody's equally poor and everybody's equally famished because there's nothing there you you just devour any bit of of of of capital of of Entrepreneurship everything that we do that we build these MH businesses and and the Socialist like okay well why am I going to do this why am I why am I

39:40

in here right now when when you know half the other government workers are off for the the Christmas holiday week and I'm here still trying to close a deal and getting stuff done it it you you got to have an incentive so yeah you do have an you you have to have an incentive and I think this crazy this ass backwards incent like the incentives are just so misaligned now and they're getting worse it's like we're rewarding people for bad behavior down statistics and we're punishing people like there's

40:09

a smaller number of people that are moving the world forward and we're punishing those people for for doing that and taking action unfortunately yeah um and so actually moving forward in in this industry and talking about this stuff what what do you see as you you know in my opinion I'll get to my question is like I I have the fear that there could be some national oversight on on rent control or something that literally you know either kills the values of our Properties or something um as far as an industry shakeup but I'd

40:47

love to hear your opinion on that and what do you foresee that could happen that could really you know turn make this industry to a 180 yeah yeah I know that we we have that conversation here rbni I are CFO all the time and um that that's exactly right and that's why I preach to some of these a a either the new guys the hedge fund guys the some of these big companies that have come in and they're pounding their chest that we bought all this and look at our returns and and you don't know behind the scenes

41:15

they put in two back-to-back $100 rent increases and it gets the attention of an Elizabeth warrant or some of these people out there that want to put in a a national rent control and and the fear is that you know we all love our our agency Fanny Freddy financing and they've really pushed out a lot of the cmbs lenders and and they're they're the go-to and they've already started it with these tenant protections and and and they're good and they're fair you know some of them it's like okay you got

41:42

to give somebody 30-day notice if if they're going to do this or if you're going to sell the property hey we're going to give you x amount of notice because this is going to become you know a Walmart and you're not going to have a place to live anymore okay so doing some Fair things but when then if it starts into oh you can only put in two or 3% rent increases or this and that if you if you want to borrow our money or um we're in we're in New York New Hampshire is has has brought it on there there's

42:11

already forms of rent control and new New York had put in a 3% which sounded great you know under the last Administration where inflation was two two and a half okay 3% not the end of the world um but ever since you know we stopped drilling for oil and everything else and inflation went through the roof uh 8% inflation is like 3% I can't even keep up with expenses so you you get that so so that that's something we got to watch for and and again we want to always just all blame the the the the city planners and the and the and the

42:46

the the lefties out there but we as owners have to be responsible not get ourselves in the headlines not be like oh look at these returns look what we're doing and you know not taking care of the parks i' I've been through some you know some good portfolio owners there out there and some of their parks and I'm not saying mine always look perfect but some of them they're you know look like like they don't even give a [ __ ] they're just putting in the next rent in crease and they's you know just Mayhem

43:14

everywhere tarps on roofs and and it's like let's put some pride into these places and the you're going to get the returns and you're going to get the the the the growth you you you got to let has happened over many years a lot of these models that some of these people put together and I know it's you know they're getting money from Pension funds and this and that and they got a fiveyear window but and then they got to sell the property so they got to jack up and get all these things working in five

43:40

years that's when your property just starts getting in stride I mean I I have a property White Birch EST States up in New York and uh we bought it in 2000 we're on our 24th Year and that thing is just cranking and the investors are are getting mid2 returns and cash on cash and they've gotten their cash back four or five times already so they're happy and and the property we're we we maintain the trees we put in a playground we added a dog park we're doing we're always keeping it up so you

44:10

can do the win-win where the residents win and you win and the investors win and you just you just got to know I got to have a long-term window I can't be uh I think one guy was on um Andrew Keel great guy um he quoted he he he said we used to call that long long-term greedy so we we use that now here say hey long-term greedy you don't you don't got to get this in two three years and and you put stuff up on a spreadsheet and this and that and you know what I I I grab that spreadsheet and I say because

44:42

you know 99% of that is just it's all in your mind and to put in front of the loan committees and and your money guys you got to get out there on the ground see the property see how it works and and take care of it and show hey this is is a nice place before before the the like you said the national the national call comes hey look at the look at these greedy guys and blackstones getting into here and Apollo and and and the Carlile group and all these they're all they're all just making this money these places

45:11

look like [ __ ] and these people are complaining about this this and that and uh and and we get some kind of a national uh you know moratorium on it yeah and then we're then we're all dead you know we're we're all we can't get the financing or we can't replace when refinances come up we say oh I'll just sell it okay no one wants to buy it now at the cap rate you thought because they can't do anything they can't take it to the next level so uh it's definitely a concern back to your question it's it's

45:38

definitely a concern uh it's it's staying staying low and steady on the radar you know you could you could cheer your returns and everything else but you know show the good stuff you know a lot of them do it there's good companies RHP talks about hey look what we're doing for our residents and we're giving out scholarships and we're throwing these parties for them and and you you got you got to give back to to you know keep them keep them happy yeah yeah you totally do you know and that's why when

46:05

we buy you know when we're doing our value ad projects and stuff we always you know it's a Paving the road thing it's a putting up new lights thing because most of these parks and you probably know I mean you can't see your hand in front of your face at night yeah it's it's it's awful and um you know putting a fence up putting a new sign up keeping the place cleaner not letting Johnny lot 13 you know run an auto uh mechanic repair shop out of there getting rid of the tarps you know

46:33

getting rid of all that stuff it all lifts up the community then you know all the other neighbors see that and they're like okay well we can't do that anymore it does take take some training you know if you buy from Mom and Pop they've been living like that and that Mom and Pop have let them you know work on three cars in their driveway for 15 years so it does take some some training to get that but I I'm 100% with with you you have to invest back into the community it's super super super important yeah

47:03

and and I'll and I'll follow up and I don't want to be all Skies folling too the the the flip side of that well quickly on your training we we just bought this community in North Carolina and we had that same hey you know the previous owner let used to let us do this and we go in there we we paved we put in a new sign and we say look this is helping you in the value of your home and and now they see it you know with a a home in there they used to sell for 30 35,000 North Carolina just they let anybody in here now we've cleaned up in

47:35

there and now they're like oh my I just saw my neighbor sold this place for $899 and it's a 2003 and I'm like well yeah because it's a community where people want to live and we have rules and and there's safety in here and lighting and so doing those things helps your your residents educating them about it and it helps you and your value and uh but now on the flip side of you know the the nationally I think our asset class is still way undervalued as you see where rents go and apartments and alternative

48:03

housing we we have we have a long way to go there there should be rent growth for many many decades you just got to get Do It systematically um and and don't think you got to get it all at once um it it's still a great great property type and when you go in a nice property and even even the mom and pop ran it pretty good and you take it to even another level it it it's amazing that we have we have a property in in New Hampshire by the Sea Coast they call it over there by Portsmouth and the the previous owners

48:35

it was nice it was cute it was uh but there's old metal homes in there and they let people do what they want we went cleaned it up and and now it's 100% occupied and now a a a single 16 by 76 home in there we just brought one in there got evicted some guy it was just a mess and it sold for two 239 239,000 in that market a single white home and and we see and yeah and uh we're just amazed it's like wow people want to be here in this area and if you can provide them a nice Community they're they're going to

49:12

they're going to pay the freight and you're you're going to start getting the returns and we're now actually you know we probably had 110 into that home so you could imagine the the profit margin on it and what you can do on the so now any metal home comes up oh yeah we we'll take it we'll buy it here here five grand have a good life um we're going to demo this thing and and make make 100 Grand on the next home so if you do the right things again and and there's a and there's a beater down the street Adams

49:39

mobile home park I know it well that you know all the all the all the druggies and and and still looks like hell and and they they you know when they're ready to sell that thing's going to be redone but um so it pays off to be it's not oh Julio you're so nice and you're doing everything for the tenants and you're such a good guy it's like no you idiot I'm doing this for the tenants and us and our investors and so um do it take that long-term Vision yeah for sure for sure and then your your deals

50:09

so you're are you doing like do you do a fivey year or 10-e plan for your for your deals or you're just kind of play it as as you go if someone comes and offers a great number you'll take it what does that look like for you and your business model um we we much like to hold longterm we sold a few things and another owner operator that I talked to he called it Trim in the tree you know we some markets were like ah we haven't really built up around this Market it wasn't that great and someone

50:38

else is buying some communities there and we've sold in a few other markets but we like to hold them long term um if if the if the rates are good like you know back back uh you know a couple years ago we locked in in our Lima Ohio deal a 10year fanny loan at 2 point I I I think one of the lenders told me I we think I think you hit the lowest bottom on rates I think we got 2.

51:05

53% 30-year fixed uh it was a 10 year 10 year loan but so on that I'm like I'm not taking five give me 10 I I'll take 10 years um and and it depends some people with their model they only want to do five years so they can refinance get Equity back out to their investors but our our investors are like and have been trained to like hey I just want the cash flow and if there is a capital event let's put into some more deals they they don't want to pay Uncle Sam um they don't you know they don't they don't want to just you know keep

51:34

leveraging everything up we'll we'll we'll lever it up a little bit pull some money out and then go buy another deal with them uh but yeah they like they like the cash flow yeah for sure for sure yeah yeah and that's that's the same with me you know I'm more of a long-term hold kind of guy you know if we have you know I like that analogy of trimming the trees because you may buy some assets and you don't end up building up like we have one right now that I'm thinking about it's kind of out

52:00

there assets doing well but if we wanted to trim the tree that would be one that that we would do that with yeah yeah and and don't be afraid to do it there's other buyers and you think you know I mean I I remember the guy who bought we had these Southern Indiana deals and they just weren't we weren't getting to them enough couldn't build around there and we sold them and then the the guy who bought it from us you know at first was like what did you sell me some piece of [ __ ] or this that and and then he

52:28

moved the rents up a little bit and then he sold them I think he bought them just round numbers he bought them from us for like three million they were these small little deals and then he sold them for 8 million and then and and then when I saw him again a couple years later he was like damn I'm glad I bought those from you so someone else someone else will take him to the you know you can't be greedy and think on every deal you're going to win and they're going to lose let it be a win-win let them take it to

52:51

the next level you got your stuff out of there and redeployed somewhere else um so yeah that that always happen we're in under contract on a deal right now in North Carolina and and it's a it's a national operator and they just haven't been able to fill in around that area and and we're we're H we we just bought there and happy to bring it in and again it's going to be a win-win they're happy they're going to redeploy they're doing other stuff and um and and we're adding

53:17

to our base there so yeah that that's awesome man um last question here and so like you know your deals you're you're looking at now I know the the market here the last year has been it's definitely slowed down transaction volume has been down how are you finding yield in in deals now and are you find well you have deals under contract and Deals you're closing on so obviously you are but are you looking at it hey this is going to be thin in year one and year two and then we're looking at it long

53:46

term or how are you looking at that yeah yeah good question well and and I know as we're needing to wrap it up the first thing I want to say is that I I I love to help people I'm open book you know these people like oh why am I going to tell you about this deal some guy just sent me some deals and they were too small for me and I said hey why don't you contact this company um they they buy in that area and they were like oh wow do I have to pay you commission I'm like no just so help help each other out

54:11

there there's only there's only certain amount of players in this the the better we all make each other the rising tide and um you know we've we've done our last 12 deals believe it or not have been you mentioned you saw I saw it on one of your LinkedIn we've done joint ventures and um brought in brought in so I love it um brought in some uh today's my daughter's birthday so she just turned 14 so I I know the I know the feeling that's great yeah and um we we again we're not greedy we're like hey

54:44

you you you you're on the ground there you're going to help us run the property we're going to give you some Sweat Equity some have their own Equity investors to bring in with ours some don't um so we do a lot of partnering uh and and we have these last few deals we've done have been seller financing and they you know we' trained our investors hey where we used to start we're going to get you a seven eight% return out of the box the these are going to be four or five but by year five and six and seven they're going to

55:14

be you know approaching 20% but with their under Market rents we still got to pay for it but we're going to get them there over time and we're going to bring in some homes and infill so yeah you got got to be creative the the key is getting the right money partner people think oh this guy's going to give me money and and then they get in trouble and this guy they want to control them or they said you promised me 20% irr year one and it's like well dude if I do that I'm going to destroy your property

55:40

for the next 20 years I'm going to everybody's going to be fleeing here we're going to have a terrible reputation I'm not going to spend a dime on the property and I'm going to jack up everybody's rents does that make sense to you is that the you want your money today only or you want it for the rest of your life so you you got to get the right money partner and and explain to them that this is a long-term game and and they will not regret it yeah for sure for sure yeah and I I think that

56:06

you know I had Ryan Smith from elevation capital and he talked about that quality Capital being long-term patient Capital because you're right you know I have some groups some bigger groups that are like hey you know we'll we'll throw we'll give you a 100% of the equity for the deal and I'm like no I know what that comes with I'm good you know I'm going to help my friends out and the people that that trust me and the people that are that are patient and are not going to you know want expect a 20%

56:35

prefer you know IR in year one or a 30 you know something crazy yeah you're you're you're uh good advice there for sure yeah yeah absolutely absolutely well well Julio um it's great uh I appreciate you coming on the show is there anything you'd like to to leave our listeners with before you go yeah yeah no well sorry I talk a lot we probably we could have gone probably four more hours you and I for sure for sure I um just that I I I love what you're doing you know a lot of the young guys Andrew Keel and and and um Ferd and

57:08

so many of the guys I've I've talked to them about and just to know that that hey I'm I'm I'm here I'm a reference I've had guys call me hey what do you think about this deal what should I do I've giving them insight and and that's it no no money Char I don't I don't I don't need a fee I don't need anybody's money we're we're we're comfortable we're good I'd rather see you guys and all of us do the right thing and make the right decision and not not blow up

57:32

our industry with greed but do it right um so yeah I mean I'm I'm Evergreen communities.com is our website Julio juo at Evergreen communities.com I I've talked to a lot of uh people hopefully some of your listeners and you know just just advise them all to slow and steady wins the race take it take it don't don't be stupid don't be greedy and and you'll get there and uh and and reach out reach out in our industry I think we need to continue to help each other out and and help you know guide each other

58:06

for sure for sure well thank you uh Julio for coming on and thank you for everyone for tuning in to the MHP show we are releasing episodes every Monday you can reach out to me with questions at Derek at dvor.com go check out the free webinar we will see you all next week peace all right happy happy New Year thank you [Music] guys

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