challenges in finding and acquiring mobile home parks with Craig Schneider

INTRODUCTION:

Join host Derek Vickers in this insightful episode of "THE MHP SHOW" as he sits down with Craig Schneider from RYZ Communities to discuss the intricacies of mobile home parks and RV parks.

KEY TAKEAWAYS:

• Challenges in Acquisition: Craig highlights the lengthy process of finding and acquiring mobile home parks, noting that it typically takes around two years.

• Operational Insights: The conversation delves into operational challenges such as tenant management and infrastructure issues, shedding light on the realities of managing these properties.

• Investment Landscape: Craig shares insights into the investment landscape, including concerns about potential national rent control and market fluctuations. The importance of market knowledge and patience in real estate investment is emphasized throughout the discussion.

CONCLUSION:

Tune in to gain valuable insights into the mobile home park and RV park industry, and discover the keys to navigating the complex world of real estate investment with patience and expertise.

WATCH IT IN YOUTUBE:

TRANSCRIPTION:

[Music]

00:06

hey everyone welcome back to the MHP Show podcast I'm your host Derek Vickers and here on the MHP show we talk about anything and everything that has to do with mobile home parks operations crazy stories talk about things real estate and really dive into this asset class and anything else and you just never know what we're going to get into on this show so today I have another guest I have Mr Craig Snider with it's ryz communities correct R YZ rise communities got it rise communities yeah welcome Craig I know we've talked like a

00:40

hundred times on the phone and I'm like man we should thanks for having me yeah I I'm like man we should just hit record on some of these conversations that we have because we always have good conversations so glad to have you on welcome thank you so much yeah we've experienced a lot of the same things just different parts of the country yes for sure for sure so what what do you guys so tell us about rise communities like what do you guys what do you guys buy them what have you bought in the past and just tell us about it yeah so

01:12

we're we're strictly value add buyers so we typically buy the mobile home parks that are a little less desirable and then we have a team that goes in cleans it up and basically tries to bring it up to no market value and then we're typically Buy and Hold investors we're not really a syndicator so this way at least it gives us a Val you know value ad opportunity where we can increase rents provide affordable housing for people uh we also have RV parks as well and we're looking to expand in both

01:44

those asset classes as we keep growing nice nice yeah I know and that's that's kind of the same as what what we've bought you know I know you and I have talked a bunch of times about some of the interesting value ad stories and we'll definitely get into some of that um but what are you guys so what are you guys seeing out there in in the market the deals that you were buying in the last year or two are you seeing those available out there now now we're seeing a lot of I'll say newbies coming into the market I

02:14

probably get a call once a week for people that want me to invest in their syndication and I asked them you know what's their history and what's their experience and the asset and it's very shallow to say the least so we um it makes a little nervous this gets a little frothy uh so we do see people paying a lot of money uh we've had offers on our properties that we sit there and are somewhat dumbfounded uh and we kind of want to sell it at those numbers but then you got to find something to 1031 into so that's the

02:47

catch it's like you kind of want to take advantage of some people who are trying to break into the industry uh but then on the other side it's harder to purchase assets that make some sense because there's so much people so many people out there there with a lot of money that are able to purchase these properties or purchase the properties you know without the necessary knowledge to run them we do see a lot of people with money on the sidelines we talked to a lot of people who have been in this industry and the multif family industry

03:16

you know a lot longer than I've been a very wealthy successful people and they're sitting on their hands you know for another some are telling us 18 to 24 months to wait and see what's going to happen yeah wow wow and that's interesting and that so you're getting calls with people to invest in their Syndicate you got people cold calling you for that well the people that know us uh you know from the past uh people who are saying hey you guys are investing we out State investors right you know um so they're like oh you guys

03:47

out of state we're getting involved in out of state investing you know I see this you know mobile home park and you know I'll use Ohio as an example and oh there's so much value add the OM says x y and z and I'm like yeah you got to do your own due diligence but they're raising money because everyone hears that this asset class is you know it's the greatest thing since sliced bread and you know running it is a different animal than even an apartment building as you know yeah yeah yeah and so you're

04:16

getting like oh there's you know a 100 vacant lots and there's so much value ad we're just going to bring on new homes like it's so freaking easy that drives me nut than anything I wish it was and I tell people I say you know typically if a deal is being advertised online it's already been offered to you know a lot of people already yeah for sure and they they've passed on it and you know I I I wanted to touch on so like when you excuse me when did you buy your first mobile home park 18 maybe

04:52

2018 somewhere around then maybe 17 but it took us two years to find the first mobile home park oh W before we actually first saw one actually took us two years from finding this one to close on it that's been our typical MO is it's a two-year process to typically purchase most of our assets from the first time we buy them a lot of the buyers a lot of the sellers end up going through a lot of headache where they'll sell a property or they think they sold it to someone who's not educated they don't

05:24

realize you can't get financing like an apartment building so then they don't have the capital to put into the property and we always stay in touch and one of our favorite stories was one guy that um we spoke with we had a deal and really nice guy and he he called me up I was talking to him for months he goes I need your opinion I said what is it goes this guy told me he's G to give me 300,000 more than you I said I would take it if I was you but you got to make sure it's legit so signed the paperwork

05:53

and then I had a whole seller sending it to me to buy it and I forwarded it to him and he cannot believe the headaches it was causing because they had random people walking in the property you know 10:00 at night he getting phone calls and he got out of the deal because they couldn't get the financing and he just sold it to us but you know that's what happens a lot of times yeah for sure and we you know we we were talking we were on site talking to a seller yesterday and he's like you know I got three other

06:22

offers higher than your offer sales tactic on them by the way and I'm like just take it man you should take that offer because I'm not moving so take it right and it'll come back to you when the other offer isn't real yeah that's what happens all the time we're working on another Park it's been going on two two and a half years we had contracts and then one of the limited partners in the deal said oh we can't sell it there's still things that can be done there's nothing that can be done they

06:50

overpaid for the property substantially a few Year many years ago and nothing's changed um but you know what maybe they'll change their tune in four or five six months but you can't get aggravated you just got to go with it and it's just nothing personal just business you know I'll find another one we'll look for another one there'll be another opportunity so you know you just got to keep looking and keeping positive because it could be very hard sometimes yeah yeah it gets you know it can get

07:17

frustrating but luckily my stint in the insurance business with you know grinding out deals for you know nine years gave me that you know that even keill persistence that you need especially in these last you know 18 months here to kind of not go crazy yes absolutely that's that's a good background to have yeah for sure for sure um so what I was talking so you got your first Park um you know a few years back what did you learn you know because you mentioned that you've got a bunch you know you've

07:52

talked to some people that are new in the business and they're not what I always see is that they're underestimating the operational headach so I oh I'm just going to pay someone you know 20 bucks a month and I'll give them you know 10 bucks off their lot rent to manage the property and it's a value ad deal so we know what involved in that but what did you learn on that first deal that kind of maybe not necessarily shocked you but it was different than what you had initially thought about the asset

08:19

class say the the construction of the homes uh was kind of surprising you know we're like oh you know because we've renovated multiple you know you know multif family for years we had our own team up in New York for years our own crew our own license Contracting license like how hard could these things be just to renovate and put back on the market and then you start realizing well in 1960s trailer versus a 2010 manufactured home you know it's a little bit of a difference you can't just put a roof on

08:53

a 6070 trailer put tile in or you know heavy weight because they can't handle that weight so that we've experienced before uh setting the homes sometimes people don't realize because especially in Florida with this ground being a little softer than other parts if it's not done right those homes shift that's not really looked highly upon by the tenants when they wake up in the morning and their home is half off uh so that was a few things um certain tenant bases don't want to pay for City water so they

09:26

disconnect the water and the sewer connection we learned and then and all of a sudden you're on site you're like why is that dropping out of the trailer like that we thought it was broken we we fixed it and then a week later it's the same scenario oh my gosh never heard that before that was an interesting story to hear but I think the more you do it you know when I first got into real estate from accounting and uh one one guy I spoke with many times he's got 95 multif Family Properties and he said he could

09:58

read books and follow all you want but until you buy it and live it that's when you actually learn the what you're doing on a daily basis you know different personalities different people you know someone in in Jacksonville Florida who's a tenant just communicating with them versus someone who's in New York is it just a different person and different way to communicate with them so that's another thing that we learned with our first uh mobile home park is just the communication of it um I will say on the

10:25

other side you know a lot of people don't understand that the the mobile home park is you know it's a it's a really great asset class for people who need affordable housing and that want to live in an apartment so we didn't even think of it that way in our first one but that was you know positive that we learned yeah that's great man and it's like you know it's funny you mentioned um I've never heard of anybody undoing the sewer and water themselves but you know it's funny you mentioned something

10:54

about setting the trailer I thought about something so we brought in a home in our first Park I brought it in and uh you know I I found like the cheapest mover a cowboy a trailer dog and he you know came in and set up the trailer so like two weeks later we pull in this girl was drunk driving into the park she hits the hitch trailer moves and basically falls off the uh the cinder blocks and because it wasn't done right it wasn't tied down he did a terrible job and um needless to say they weren't very happy about it so we ended up

11:31

having to pay to get it done right and it's just you know things that you learn in the beginning you're trying to do things cheap but you know that's not always the best way to to do it at all not at all because when the when the next guy comes in and sees you try to be cheap they're going to be like well this a little extra now yeah for sure for sure so you guys are buying so what is your mix between multif family properties and mobile home parks like what's your portfolio's mix I guess from

12:04

a percentage perspective so we have uh it's 70% uh mobile and RV and then 30% is multif family um I mean we still have some multi family up in New York that it's just easier to leave rented for the time being uh but other than that it's it's mainly uh mobile home well one of the mobile home parks is a larger RV park yeah that we stumbled upon but we're looking for you know just to keep expanding in areas that grow yeah cool cool and then the RV park that you have is that like a long-term RV park or is

12:39

it transient or what kind of deal is that it's mixed you have a little bit of both you have some people that do stay long term and some people that don't you know yeah yeah yeah and the reason why I asked because we you know I actually have um first full RV park actually under contract and it's more of like a long-term RV park so I'm just just you know learning as I'm going through due diligence learning going through the assets a little bit different it's virtually the same but um I I love RV

13:07

parks and uh I I think we'll you know end up buying more of them because the cap rates seem more favorable going in than what we're seeing on Parks right now because I'm still getting sent stuff it's like all right how is this even possible to make work we get those every day as well probably the same mailing list probably probably yeah you know one of my concerns with RV parks is they're they're they're easier to create so I think we're very careful on when we do an RV park is we probably got four or

13:46

five RV parks in the same you know western part of Florida and oh he just built it and he's trying to sell it this guy's just built it trying to sell it so I try to look to see is there any any way to have any long-term tenants there and if it's a more transient and more of a desolate area it becomes a little more concerning because then why can't someone else who buys it and could build it for you know 50 cents on the dollar they could undercut everybody else and they put you and whoever spent a little too much out

14:17

of business yeah yeah I I like the long-term aspect the transient that really does not Tickle My Fancy at all I like the the long-term aspect because generally operates like a mobile home park like this one that we're looking at direct build electric so it's not you're not have you don't have this crazy electric expense so I like that um and again just to reiterate I love that because it just operates like a standard mobile home park yeah with the RV parks it's very easy to use technology to assist in

14:51

filling the lots and paying and all those items for for the residents yeah yeah so what did you you know I I'm skipping around a little bit here but what did you do before I know you mentioned accounting so you were an accountant before did you do anything else entrepreneurial before you got into this crazy business so yeah have an accounting degree I spent a couple years doing uh forensic auditing I was actually on the World Trade Center cleanup audit uh after 911 so that was definitely an experience um opposed to that I didn't

15:28

really like accounting so I got into uh real estate appraisal and then I thought okay I'm going to go buy some foreclosures at the steps uh in Queens New York but that was a very difficult task to accomplish but um pretty much then we just I start working in property management and then we started I started saying hey I'm going to go uh go flip houses I didn't know anything and I started doing you know 10 houses at a time you know we did about 30 a year and we had our own crew and like wow this is

16:03

this is tough because it's constantly one on one off tax liability is substantial compared to let's say an apartment building and um you know the barrier to entry is very simple to flip a home so we ended up saying okay uh let's just still Buy and Hold so we started buying dilapidated apartment buildings multif family and then um renovating and renting them and then uh we ended up selling most of them in a 1031 to start buying the mobile home parks wow wow so you were 30 houses like I can't imagine like the management

16:42

aspect of that with all these crazy con I know how these contractors are dude I I mean and you're manage them managing them on 30 projects well that's why we did our own inhouse group that's the only way to really make it somewhat viable it's still very hard even though you have like you know you have a one of our guys with the head contractor and he'd oversee the work but it's just a constant flow of homes coming on homes coming off and then you know you don't realize it but the taxes that you're

17:12

paying on the profit of those flips is something that a lot of people I still talked to today that want to flip a house and well if you think you're going to make you know 50 60 70,000 you got to make sure you're understanding the tax liability that you're going to have at the end of the year that's going to offset what profit you may have on paper yeah because you're going to be paying 30 to 50% right especially if you're in a in a state that has state income tax or if you're in New York you have state

17:40

and if you're a city resident you have state city and federal tax yeah does go up pretty high so you live in New York right I do live in New York yep I'm on Long Island okay okay yeah so they're getting you up there probably closer to 50% up there they WIP collecting their money they do they do yeah we we need to get you down in Florida man I know you own a bunch of Assets in Florida you probably like I'm surprised you haven't made the jump yet that that's that's that's the that's

18:10

the long-term plan uh you know we have two young kids so once there through school that will be one of the opport one of the things that my wife and I will be looking at yeah yeah yeah and that's interesting so after you did all that that's when you started buying multif family and then you got into you know mobile home parks how did you find like did you just stumble upon a mobile home park deal or was it just so we were originally going to start doing some maybe you know larger multif family and I spoke with the same

18:40

guy on 95 properties and he's got to ow them are in five burrows uh and he's nervous about what was going on as far as the rent regulations they have and the rent control and rent stabilization and just just a lack of common sense so we said okay we can't really in invest in New York so let's start investing in other spots and then you know the biggest need always been affordable housing it's still going to be a need going forward um and they're like okay what's the most affordable

19:10

asset class and that's when we started looking at these mobile homes and you know someone could come up with you know a little down payment or they're handy they could own something and pay $300 to $600 in lot run a month you live a pretty good life versus you know I'll say similar person on Long Island you know for a three-bedroom you know in an average area at best you know it's $3,500 for a house so it's much much more yeah we also noticed some of our tenant base up here was relocating out

19:39

for the same reason they went to the Carolinas and they said look I could live a better life so that's that was like you know sooner or later you got knocked on the side of the head enough you realize what's going on yeah yeah yeah wow wow yeah no it it's interesting and it you know it'll be interesting to see in the next 10 years like if the migration continues to to happen because you're right someone living in New York you know or California or somewhere like the cost of living is massive but the

20:12

interesting thing is that the people are coming down here to Florida and driving up the cost of living here like go to Miami dude like I was in Miami for a conference and I'm just going around like whatever I'm like I do not know how someone that's working in this hotel even pay like how they even live down here you know on on a normal like you got to have three jobs other or you're splitting your rent with three people well that's what it's like on the island so some of the units we have you

20:44

may have even some of the houses that sell here you have what's called multigenerational living so you'll have two or three generations you'll have let's say the grandparents and sometimes you they two kids with their families living in one house wow cuz they get the Senior Star exemption for taxes and just things are so expensive so you know when I talk to some people say northeast Florida they like oh it's so expensive I'm like yeah it's not that expensive when you factor in that everything is

21:10

going up uh the cost you know and then in in New York City which has been a big topic is they that rent control and rent stabilization and people think it lowers and it's better for lower income people and you maybe in some cases but what's happening they have right now which has been big in the media they have 100,000 V units of Apartments because if you rent them out you're get between $5 and $800 and you have to renovate them which would cost you 50,000 you better off leave it empty you don't have to pay the

21:40

heat your insurance is less there's no management so that's the other side of of that so the only real way to lower rent and lower cost is to just bring on more Supply and it'll artificially just do it it's worked everywhere but you know Miami is tough cuz it's also very congested in one certain area but there's going to be sprawling as you could see and we're starting to look in other areas outside of Miami just to pick up some of that Trend as well yeah for sure for sure and this you know the

22:11

the whole rent stabilization topic is just you know it is what it is like in my opinion it doesn't work for various reasons one of them like perfect example what you had just mentioned but it doesn't obviously it doesn't incentivize Someone Like You Craig to go in and pave the roads and fix the place up if you can you know increase the rent eight bucks or 10 bucks whatever the the percentage just doesn't work right especially in Florida typically when you're buying from a mom and pop your

22:40

your first50 to $75 of rent increase goes to the property tax increase yes so like if there was rent wouldn't even Insurance increase yeah right so they everybody wants affordable housing and we need it you know but you could say you want affordable housing but you can't raise the cost of insurance you can't raise taxes you can't raise labor cost material cost and expect someone to go and build something or create something that's affordable so you got to look at both sides you look at the the expense Ledger keep that down

23:15

and that'll help build something that's a little bit more affordable where you just saturate the market with Supply just supply and demand that's the best way to do it yeah yeah for sure for sure and that's like so I love this asset class I guess anything it could happen with anything but my fear my biggest concern in this asset class is that somehow some way you know the stars align in Washington DC and they pass some national rent control on in mobile home parks or whatever and then the value of our stuff just you know

23:53

plummets that that's scary to me a little bit what's your opinion on that so the other side to that coin is if they do that there'll be a lot less people buying them and less competition and the barrier to enter the field will be harder so no one can go just build or create a mobile home park they're not going to do it so if you want to be in that asset class where you don't actually home the mobile home you know hey it's it's it's more it's harder to do so your asset may go up a little bit

24:24

so that's that's unfortunate that New York's a perfect example in the city when you now you have so many vacant apartments and so rent stabilized that when a landlord has another vacant unit that they could charge Market rent the people who are you know paying taxes and contributing to society they're the ones who are now paying a higher rate so if the if the government comes in and says Okay I want 25% of your Park to be run stabilized okay well our costs aren't going down so then the other 75% have to

24:54

you know help offset that reduction in income uh so we could pay the note pay the taxes and keep it a nice safe place for people to live so unfortunately if that happens there's two sides of the coin right yeah yeah for sure for sure it's just definitely you know if you buy let's say you buy a park at a six cap this year or last year and then they pass national rent control well your property is not necessarily going to be worth that anymore because if you can only depending on what the what the law would

25:29

say you know just it just wouldn't be and you you understand that and that's just something that you know I just I just don't trust the government I'm one of those guys and like I just whatever these guys can do I mean who who knows what they'll come up with the other side of that is you got to realize the politicians all have to make money right and they're not doing it in their day job so if they're invested in real estate they may talk a good game it's like they talk about oh

25:56

we want to run control and right stabilize and the average person's like oh that's a great idea it's wonderful yeah go do the research and realize it actually hurts them because right now there's no place for a lot of the people who are the working person making $20 an hour in New York is there's nowhere to live but if you would to say hey you have a 100,000 Apartments we could just get the market let's get them on there there's going to be a lot of opportunity for people who are working who are good

26:21

people trying to contribute a nice place for them to live and you know it gets money flowing in the economy yeah yeah for sure for sure so what do you see guys what's what's the future for you all what what do you what's 2024 looking like well I think right now we're kind of in a holding pattern we're always looking for deals um more look for to bit larger deals uh than we currently have but that's what we're just doing we're just out there looking for deals we're improving our current assets

26:53

trying to increase you know cash flow and uh waiting to see how things just transact over the next few months yeah do do you think we'll see any opportunities come out of people that are you know I guess uh in distress in some way shape or form there will be some people that will start to trickle out that are in distress the question is is there so much money on the sideline right now that are waiting for that opportunity that you know it may drop 5 8% drop 12 to 15% that's the only time we tell yeah yeah you're right because like that's

27:33

exactly what would happen because we're so if if someone told me today hey Derek I got a freaking 150 space Park it's you know 85 cents on the dollar do you want I'm like yeah I want it and then you hear about it and you're like dude I'll pay 87 cents on the dollar and then somebody else hears about I'll pay 91 cents on the dollar for that and then before you know it we're we're back at at square one right yeah because that people are buying deals and we're looking at them and you

28:02

and I spoke about this they're they're losing money day one and if you're in an area you know in a market right now where rents are compressing what's what's your goal to get it to get you know profit and if you're a syndicator you have preps that you got to provide your investors and they're going to want some upside as well so um you know if those people can't refinance not just mobile homes but Apartments over time or you see a lot of the commercial real estate office and retail when those

28:32

loans come do it' be very interesting to see what happens yeah for sure for sure and I'm always going through the whenever I see get these deals that you and I were talking about that we get these beautiful for caps and these four and a half caps that we see like the only sense that I can make of it yeah I mean maybe someone has some 1031 money and they're just going to drop in and pay cash for it yeah they could do that the assets in the great location it's going to do well over 10 years for

28:59

sure um you know that's one way or I you know if you have a fund model and you're raising 50 million bucks and you've got you know assets that are providing great cash flow you can throw in these trophy type assets to kind of offset and having that nice asset in your portfolio the other one sort of offset the returns there but yeah just buying it one out is just like you know what whatever but I will say the deal that we looked at yesterday was the nicest most meticulously taken care of mobile home park that I've ever

29:36

been to from Mom and Pop I mean it was Immaculate right and it's in a great location it's a five cap and so I'm like man I want this deal like instead of bringing in investors me and my partner my two partners we can probably just fund this one ourselves I mean I would just like to have this deal because over time like it would just be a great deal to to have and so I could see something like some thought process happening like that on these four and five cap deals that are really nice long term and it's in a good area

30:09

where you see growth you're better off buying a deal there you know that's why being out in the market and knowing the area and the environment gives you a lot more insight than just someone who you know randomly coing Brokers or coing sellers or buy or Property Owners try to buy it you you have you know the feel of the market if trend's going to go up in the next 5 10 years you know what you might as well grab it but again these things aren't going to go down 40% it's not going to happen because if they went

30:38

down 20% you and I would be out there buying everything yeah yeah for sure for sure yeah now let me ask you this Craig so the four cap deal that came across your uh email two days ago I know you got one I wasn't looking at your email but I know you got one are you going to be mad in five years years that you didn't buy buy at least one of those deals that came through uh if I could find something that's better in between no okay good answer good answer good answer because I always think like you know when I was

31:12

first looking for deals you know people would be like oh yeah well 55 a path this is in Orlando I'm like oh you're [ __ ] crazy dude I'm not paying that like no one's paying that and like that same deal today would be you know closer to you know a 100,000 a pad maybe even you know there and so I I actually found this old list here there was an old little pipeline list that I had of deals and I'm like oh my God like this deal in Coco for 40 a pad I'm like dude these guys wouldn't fire

31:46

sale it for 80 now you know all those deals yeah and so I you know I always go back to you know will I be saying that again in in the next five years and that's possible it is possible I remember you know 2008 you know and the market just kind of stopped and there was tons of deals all over the place but got to realize this is the first time in our lifetimes and people who are much older than us they're actually in a in a rising interest rate environment no one really has experienced that you know you know

32:21

unless you're maybe 70 at this point yeah to see what's going to happen and the results of of of what's going to hit and it takes a long time for the interest rate increase to actually hit the market and for people to feel it that's why we talk we talk to people who have been in the business for a lot longer got a lot of experience not just in the multi not in the MH but multif family and all other aspects and when I see people who are you know very successful owns tons of real estate you know wealthier than you could expect and

32:53

I see those people are sitting on the sideline waiting but I have all these newbies calling and paying you know $100,000 a ped for Ohio and like you know what it sounds a little froy for us at this time yeah so there should be there has to be some correction at some point yeah and the people that you've talked to that are sitting on their hands what are they saying that they're waiting for the correction they're waiting for the interest rate hike to be priced in uh they're waiting for people who had a

33:25

5-year loan they were expecting to refinance and pull money out uh now having to come to the table to get another financing uh because they're not going to pull money out they won't even get the same deal they had prior if you had 3% you know fiveyear rent trust only and your rents were th000 and now you know they're they're 950 and rates are six and a half you may have to come to the table with money and it's it's hard when you're a syndicator to save your investors yeah we need money and you're

33:57

going to make less yeah yeah yeah for sure it's not a not a conversation that I want to have at all no you probably don't and it just takes a long time for it to filter through and you know you got to be patient and unfortunately that's one of the things that I need to work on as patience we want to have everything yesterday but I think the patient person will win yeah well I mean we're entrepreneurs I mean what's the patience is like horrible like we are very patient but at the same time we're like

34:30

we hate it right we want everything to happen now like like you said yesterday but um you're right um we've been extremely patient um here in these last you know 18 months or so 20 months and now we're starting to see some movement on some deals we're like okay well we can make sense of that um you know but it's just so interesting because it's always going back to like will this deal be cheaper if I this if this is still around next year if it comes back next year I'm like no it's

35:05

not it's got to be if it's a good deal and you're looking to long term it makes sense that's great I wouldn't buy something thinking you're going to flip it in you know 12 months to make money that wouldn't do but no you're GNA hold something for five years and you have a team in place and you know the market you know like you know I don't know the market for example in you know in Michigan I'm not going to go randomly invest right now in Michigan but there's something in a market I'm familiar with

35:32

I'm like yeah I could see the levers here I know there some business is coming people are moving demographics getting younger you know that's something you you put some money in and you hold on to it but that's why we do more of the Buy and Hold versus the buy and try to you know put some paint on it and then sell it to the next person going put paint on it and sell it to the next person right right right right yeah and that's that's the same but you know I I always say that I'm a long-term hold

36:01

guy but if like you know someone's going to come and offer me a three and a half cap yeah you know sure sign it sign it up man send me some non-refundable money and we'll we'll we'll we'll sign the contract right yeah non that's that's when it usually stops with the non-refundable money yeah right exactly yeah I I I think I tweeted something one time I was like you know I keep getting sent these three and a half caps I will I'd sign a contract today if someone you know will offer me a three and a half

36:32

cap for this stuff because it's like you know a buck 90 a pad or something yes and I actually had a broker reach out and was like hey Derek you know some knucklehead and he's like hey Derek you know I got buyers you know they're they're still paying you know three three I'm like whatever no you don't man you know we'll sell it all you know 10 million hard day one you know for the portfolio five million maybe whatever of course nothing can yeah one one there's a lot of really good Brokers but

37:03

one one problem that we always run into and you have like a a residential broker has a mobile home park listing and they don't know how to Market it and they're like well you know the rents are 1100 I'm like what's lot rent no it's 1100 I'm like you're not going to get financing on 1100 because they're renting out the home nope and they tell the seller they're going to get oh it's 1100 time 50 at a five cap then the seller has a huge number in his head and it's just false yeah and we've

37:32

run into that a lot of times so you know and they're doing disservice to the seller because they just don't understand what they're selling yeah and and they literally essentially ruin that guy's ability to sell for however long because they don't know what they're doing and so they're they're saying here but I mean we I just ran so the guy he sent me something on LinkedIn he's like Derek I got a park you know it's 35 pads and oh you can oh there's there's 20 acres for development which I'm

38:06

always like dude if it's if you're pitching the extra acreage like whatever man but and I told him I'm like dude a 100 a pad in this area like no like that's just not good he's like oh well you know the rent same thing you just like similar to what you just said oh yeah well the rents this I'm like whatever think I said one of those on LinkedIn this week as well oh okay okay yeah I think you know people just you know need to learn the game I think the game is changing and I think some of those deals

38:40

with higher Park owned home rents there's some creative ways to kind of make some of those work if it's in a great location um but still the bank is only going to Value lot rent so you have to still think about that but you can still get creative with it and if if the deal is you know hits the right kind of circumstance if that makes sense yeah that's why I know in a market like you know in a certain area you know I can go in here and and I'm okay that's that that's a huge advantage of it what

39:14

you have especially in the deal you looked at yesterday knowing the area knowing the market it makes a big difference for someone like you versus someone coming from outside area yeah yeah and I wish I wish you could have seen this park dude never they literally have like this t- room there where the laundry is they call a t- room and it's literally looks like my grand my great grandmother's like back porch it's like stuck in like the 70s like it's like you know the floral kind of like yeah it was just really

39:48

fascinating the residents love the t- room oh my God yes absolutely absolutely well well um Craig man is there is there anything that that you want to leave with our listeners for some of our you know maybe maybe new people in the business like what advice would you give them in you know hey they they've actually committed they say hey I want to invest in mobile home parks I'm not half ass about this anymore I want to get into this space what would you tell that person to do get your car and go drive every

40:22

mobile home park in the vicinity which could be miles could be 50 miles depending on where it is I would drive through it I would talk to people and talk to everybody you can and I would also talk to local municipalities and check the zoning as well I'd also talk to multiple attorneys as well not just rely on one if you're doing an out of state you kind of also want to rely on a local attorney not an attorne in a different state yeah they may not understand the laws that are there so but I think getting your

40:58

getting your you know we call it up here you know they have a lot of subways and trains I say the 11 train number 11 train which is your two feet uh start walking and you'll learn a lot and once you start talking to these residents they will tell you everything everything you need to know yeah yes yeah and I and I love that you said going out and driving because that's important just to understand what you're looking at right you start to understand it more you say oh this park you know this this is a

41:27

trailer park this is a mobile home park this is a manufactured housing community here you learn the differences between those and there's nothing like that I think I heard a guy online say oh it's a waste you're wasting your time driving Parks I'm like you're an idiot dude every time you go to a park you know we been to Parks set just talking to people oh come on in come on in and then you could just see what their unit looks like are they keeping it nice or are they sloppy or there bugs everywhere

41:55

or is it you know we always say is there a vacuum cleaner or a broom at least in the unit which is a sign that these people are caring and taking care of it and you just learned so much and you follow up with the people and you never know maybe they say oh they're trying to sell this or this person trying to sell it and it's a long-term relationship game you know you can't expect to buy your first Park a week in to saying I'm buying Parks you know again like it took us years so yeah yeah well thanks Craig

42:25

so people want to reach out to you or where where can they find you they can call call me in our office it's uh 94757 5000 the best way to reach us just ask for me and uh you know we're open to talking to anybody you never know when you could find a deal together yeah for sure for sure well Craig thanks for being on the show I really appreciate it and everyone please like And subscribe on iTunes and Spotify just hit the like button dude it's not that hard man just hit like like we get and we get almost a

43:00

thousand downloads you know like probably a good bit every week and we just don't like people don't like just click the like man come on all right well we'll see you guys next week thanks

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