Ep. 8 "What You See From The Front Lines"

Editor’s Note: Welcome to the companion article to Episode 8 of the MHP_IRL podcast! The purpose of this article is to expand your podcast listening experience with additional content. Companion articles will unpack larger concepts that we talk about during each episode that will give you practical and most importantly, actionable advice that you can apply to your MHP investing journey. 

The mobile home park industry has been branded a lucrative niche for investors . Therefore, it comes as no surprise that capital allocator types want in on the action. 

Unfortunately, even with a financially literate mind, capital allocation skills will not set you apart from other investors. I encourage all you financially minded folks to think about what other skills you have to offer because being financially savvy will not be enough if you want to become a park operator. 

If you don’t believe me, stick around. I am going to recount my year building, not my first, but my third mobile home park, and share the good, the bad, and the ugly while I was operating my first park (and living on the property).

June 30, 2017 - It was a nice summer day.

Ian and I rolled up to La Costa mobile home park ready to move in. In our vehicles, we brought only the essentials - two mattresses, cheap lawn chairs, and a TV with no stand. 

Thinking back now...it wouldn’t have mattered what we brought because let me tell you, we did not know what we were getting ourselves into. 

That summer, our knowledge was put to the test. I even questioned myself on why I left my cushy corporate job with a stable and secure salary. And just to let you know, this was my third mobile home park. 

Truth be told, even though La Costa was our third, it felt like we were going from zero to one, not two to three MHPs. 

From day one, we felt like we were in over our heads. After 90 days, we were still in over our heads, but at least we had six valuable lessons. 

1. If you’re not visiting the front lines, you’re losing out on money. 

You can’t truly know what’s going on with your mobile home park until you’ve experienced it first hand. 

The morning after we got into the park, we made our way to the office. We were giddy with anticipation - it was like the first day of school. That feeling did not last long.

As soon as we hit the door, 8:30 AM, we were bombarded from every angle. 

Suddenly, we had employees that reported to us. Not only were they ready, but they looked at us expectantly waiting for instruction (as if we knew what we were doing). Having never done property management, I can say for certain that I had absolutely no idea what I was doing. 

Tenants were already waiting for us. La Costa was home to 76 tenants, and it felt like we met every single one that day. 

Requests poured in and ran the gamut of issues from rent collections, to home repairs, and some long-overdue park maintenance. Before lunchtime, that day Ian and I were already way over our heads, and to top it off, the maintenance staff only spoke Spanish. This experience seriously exposed the gaps in our knowledge. 

We also met the slick talkers and con artists, who were all ready to pitch why they should live rent-free on our property (did I mention that it was also rent collection week?) Even if you think you are prepared for this, you are not. 

If you don’t know, I majored in psychology in college and even wrote a book about how to use psychology to negotiate in sales. Despite my subject matter knowledge, I was woefully unprepared for the way that my skills would be tested. In those early days, I found myself drawing on every single psychology tool in my toolbox. 

The people who lived here made it their job to come up with THE perfect sales pitch to con me out of collecting rent. And now because the old owners were out, I was fresh meat that they were going to try to make mincemeat out of me. 

I had to learn on my feet how to deal with difficult tenants. I made mistakes and learned a few things. MHPs aren’t for the weak of heart and definitely require courage and confidence, because not every tenant is going to love you. 

1. If you’re looking for a thankless job, owning and managing a mobile home park is for you. 

Owning and managing an MHP is like being mayor of a small town. People wave and smile at your face, and throw daggers at your back when you walk away. 

They expect you to wave a magic wand around or have an unlimited bank account to make everything work. Unfortunately, that is not the case, and rarely will your tenants understand--they don't own your asset, and won't be invested in its upkeep the way that you are. 

But, if you can’t magically fix everything, you shouldn’t expect that of your staff either. 

1. It’s important to trust your employees, but verify they are doing a good job. 

In my time at La Costa, I learned a lot about being a property manager. There’s a lot that a park owner might not even get told by a property manager. And that requires a lot of, but necessary, trust. If you want to scale your time away from the park, you must trust that your property manager is running park operations smoothly. With that being said, this doesn’t mean you can’t do your due diligence. 

I have to say, going to the front lines showed me how much power my property managers wield. There are a lot of things, some important and some unimportant, that my managers shield me from. 

You have to ask yourself, “where is the line on abusing that power of what I am told” and “is it costing me money?”

In your quest to build a solid team, you’re going to make mistakes. 

I’ve hired contractors, who we later found out did not have a business license. I’ve hired people who had warrants out for their arrest. I’ve hired people who have carted out thousands of dollars worth of materials. The list goes on. 

If there is one thing that I learned from this, it’s that you have to let your ego go and know that this is a learning process. 

Once you’ve done that, you’re going to have a team that is a well-oiled machine. 

1. You have to work to get the right butts in the seats. Or, in this case, bodies in the homes. 

If you’ve never been on Craigslist, I encourage you to peruse that website. You’ll notice that a lot of MHPs will advertise mobile homes there. 

Here’s what they won’t tell you: your time is going to be wasted, but it may be worth it. 

Ian and I began with about 30 vacant mobile homes that we planned to rehab and flip. I thought it would be a great idea to advertise both the complete rehabs and “handyman” specials on Craigslist. 

From my experience, and I wish I had known this then, advertising on Craigslist, one out of ten people will become a tenant. 

I would spend days following up with leads, just to come up with nothing. This idea demanded a ton of my attention, and really thinking back on it now, why wouldn’t it? I essentially plastered “free house” on the internet. 

With the advancement of technology and how people are getting their information, I encourage you to look outside of Craigslist to advertise your mobile homes. This could include building a Google My Business profile, starting a Facebook page, and advertising on social media. The possibilities are endless. 

5. After the first 90 days, you start to understand where your knowledge gaps are and can begin to make moves to fill them.  

If you ever want to be knocked down a couple of pegs, get into mobile home parks. After 90 days on the front lines, you’re going to have, what I call, conscious incompetence. By this I mean, you’re going to be fully aware of everything that’s going on and still not know how to fix it. 

After our first 90 days, we learned the landmines that existed on the playing field. Did it make us better park operators? Not quite yet, we knew we still sucked but we were able to start making planning for improving our operations. We put one important action into place, and that was organizing a Google Sheet called “La Costa Universe.” 

We stored everything here - contractor information, sales efforts, key performance indicators, and the list goes on. This excel put all of the small pieces of the pie together for us. It was truly our lifeline. 

Living and breathing La Costa truly taught me lessons that I use today. If Ian and I hadn’t made the decision to pack up our cars and learn the ins and outs of that mobile park home, we might still be making some of the mistakes we made early on. 

6. Because of this I am thankful. After everything I experienced, I wouldn’t change it for the world. 

This article has been strongly negative. I have even stressed how unprepared we were. But here’s the deal...I would not trade it for anything in the world. 

I didn’t have to work 12 hour days. I didn’t have to get down in the trenches. I didn’t have to stay for 90 days. But, I did because I wanted to. 

In those 90 days, I was stressed, anxious, and unsure about my decisions and what I was doing. But the one emotion that I felt throughout the entire time was exhilaration. 

I truly believe I was made for this industry. I live for the chaotic churn of mobile home parks. From figuring out maintenance needs to optimizing performance, every action and decision demands high energy. 

The problem is….you can’t experience this just by reading this article or listening to a podcast. You have to get out there and experience it yourself. 

So, I have one question for you…

If you’re not out on the front lines, then where are you?

MHP_IRL Ep. 13 "Owning 5,000 Lots, Interview with Mike Conlon"

Editor’s Note: Welcome to the companion article to Episode 13 of the MHP_IRL podcast! The purpose of this article is to expand your podcast listening experience with additional content. Companion articles will unpack larger concepts that we talk about during each episode that will give you practical and most importantly, actionable advice that you can apply to your MHP investing journey. 

When it comes to mobile home park investing, there are two types of people. 

Group A is slow and steady. They build their portfolios organically and always strive to stay in control. 

Group B is first and foremost, money raisers. They bring in money quickly and snap up properties just as quickly.

Which one is better? I always ask myself. Is the old adage true? Does slow and steady win the race? Or do you need to be fast and overconfident? 

A good friend of mine, Mike Conlon, sat down with me in 2018 to discuss his experience. For those that don’t know, Mike has achieved what many MHP investors want to achieve - owning 5,000 lots. He got there by growing organically, firmly placing him within group A. 

Growing organically from zero to 5,000 lots comes with a lot of lessons. 

Just because you’ve reached 5,000 lots doesn’t mean you’re done working. 

I’ve talked to many operators who dream of retiring once they’ve hit 5,000 lots. While I'm not saying life wouldn’t get easier, the work is never done. 

Due to the easy-going, passive air that MHP investing has been branded with, many get into the industry and forget that this is a job like anything else. Decisions still have to be made. Rent needs to be collected. 

As a person who has reached 5,000 lots, take it from Mike.  “It’s been a great run for us since 2011. We sold all five parks with the anticipation that all of the distressed stuff would hit the market in 2012. It took a while but recently we purchased about 7,500 lots and we’ve sold about 2,300. We sold our way up, mostly distressed stuff, worked it hard, built it up and then sold it to buy bigger, higher quality stuff. We’ve bought over a thousand spaces. There are still some deals out there, but it’s more difficult than they were.”

But Mike’s success didn’t just come down to him, it also came down to the team he built. 

“A lot of people love my lifestyle. The cash flow is fantastic. I think the biggest thing I did was put the right people in the right place. I put Chris Barry as my chief operations guy. Just hired another regional guy for Atlanta who’s been a friend of mine for 20 years. We have great financial people. We have great managers,” Mike  told me. 

And the story didn’t stop there, Mike continued on discussing how his team was able to be successful. From starting out in the apartment business to realizing what type of person he was, Mike did a couple of things right. 

“When I first started, it was just Chris and me. We were in the apartment business back then. I was behind the desk. I was driven by acquisitions. I am a big picture guy. Most of the people around me are detail guys. It’s a really good place to be at 5,000 lots. I don’t have to do anything tomorrow. I don’t have to show up for a month and everything is going to stay the same. It takes a long time to get there, but it is doable.” 

You might be wondering, “how do I know I’ve made it?” 

Owning and operating a mobile home park is a full-time job, and is never easy. If you’re just starting out, your first deal will be the toughest and the first couple of years will be the hardest. That’s when you’ll sweat the most, which is okay. 

This is the point in your career where you figure out what works and what doesn’t. What do you like about this industry and what don’t you like? By the time you’ve got one or two parks and a couple of years under your belt, life tends to ease up. 

For Mike, there were a couple of indicators of when he knew he had made it, “When you can hire someone like Chris Barry, it takes the pressure off. When you feel like you don’t need to be on the property everyday, when you have someone who is handling the work, and when you have someone else do your accounting.” 

For anyone who is just starting out, that might seem like a tall order. It is. 

Remember that mobile home parks, for all their passive messaging, are tough work. A lot of work and planning are required for long-term satisfaction. 

That’s why I encourage all my readers to think about how they want to grow their business - are you group A or group B? 

In talking to Mike, anyone can clearly see he is firmly in group A. His strategy for his life was built on a slow and steady plan. Not only did Mike start out in a completely different industry, but even as an operator he has maintained majority control in all of his parks. 

Mike first started out in wealth management. Then, after he had moved into the apartment space, he found mobile home parks. Throughout his experience, Mike has applied one rule - get your ducks in a row before going all in. 

“The reason I did that is because, being from the midwest, you tend to be more conservative. In the apartment business, we bought one eight-family building. That was all we had for about six months and we figured out “do we like this business?” Once we determined we did like it, I felt like we could grow it. We sold the financial planning business,” Mike stated. “On the park side, we bought one 80 lot park, and said “let’s try this for a year. If we really like it, we’ll start to buy more.” That worked out well for us. We got to experience it and say “here’s what we don’t like.” Before we got 5,000 lots, we were able to say “here’s what works and what doesn’t.” It was like a test case. That made our lives a lot easier because we weren’t going to make the same mistake on 5,000 lots.”

If there is one thing that you should take away from this, it’s that experience matters. 

Mike didn’t waltz into the MHP industry, sit down behind his desk, and get to where he is now. In fact, quite the opposite. Now, not only does Mike still have a leg in the game, he is also a CEO, which has helped him grow the skills he already had. 

“My skills were already good for this kind of thing. I am more of a big picture guy. I am okay with the details but I am much better at thinking about “where do we want to be two years from now or five years from now.” I read a lot. I try to be aware of what’s going on so that I can anticipate. The sign of an entrepreneur is that you try to anticipate what the next big obstacle is that you have to get around. But really, when you look at it, you have to be able to make decisions. You are always going to make better decisions having been in the park.”

But, he went further to say that being a CEO first will not prepare you the same as if you jumped into your park, “I’ve had a lot of conversations about clients and residents that come in and all of the crazy stuff that happens. You don’t really appreciate it until you’re sitting behind that desk. If you start out as a CEO, you have no relation to what’s going on. It’s a different business.” 

You may be asking yourself, “how do you get to where Mike is?” 

I have one word for you - endgame. If you aren’t sure what you want your end result to be, you won’t know what steps you need to take to get there. 

Do you want to only work 25 hours a week? Figure out how much it’s going to take to get you there. 

Do you only want to make $100,000 a year? Figure out how many parks you need to know to get you there? 

For me, it’s all about the endgame. If you know that, then you can reverse engineer how to get there. 

Mike’s story is similar, “Initially, we bought a lot of distressed project portfolios. We bought a Bank of America park portfolio that had about six parks in it. We still have a couple today. We sold some of them and reinvested the money. We bought a Tixuz portfolio - it was their only MHP loan. We got some of those.”

Mike and Chris did that for a while, and then something changed. “ Someone said to me, ‘Now is the time to get rid of your C MHPs and buy more A and B stuff in prime metro areas.’ That’s what we’ve spent the last three years doing. Cleaning everything under 100 spaces out and buying bigger stuff. We have seven parks over 200 spaces now. It’s very nice. Those parks are very profitable. The end game for me is...the more quality you have, the more big buyers want your stuff.”

But, what if you're a part of group B?

Snapping up deals quickly is a different business, and there are usually investors along for the ride. While this isn’t a bad strategy, it is a risky one. 

“I think with any business if you grow for growth’s sake, you get into trouble when the market turns against you or something in the industry changes. I think you need to be very careful. I get that when you’re a money raiser, you get paid fees when you place parks. The problem with raising a bunch of money, it puts a gun to your head and says “these investors expect ROI on their money. So you have to go buy something. It may not be your best deal, but you have to buy it.” And you’re saying, “if I want to get paid, I need to buy something.” It is a conflict of interest that you’re buying to just buy.”

Mike suggests always trying growing organically first, and if you have to raise money, keep within a small group. 

“I was always leery of going to outside people. I have about 15 people I’ll go to if I need the extra money. I would strongly suggest you have money to work with, but if you can grow organically it’s a lot easier because you can keep control. I am the majority owner in every single deal I have. I have the final say. If I need to get something done, I can get it done in five seconds. You have guys who are money raisers. It’s a little bit of a control issue. You have to go back to the guy with the money to get decisions made. I just never wanted to set myself up like that,” said Mike. 

Mobile home park investing comes with A LOT of tough decisions that might not show results for years to come. 

Do you want to be a part of group A? This slow and steady group can see far into the future, results that are yet to come, and most importantly (to them), they remain in control. 

Or, do you want to be a part of group B? This fast and confident group will surely bring a return on investment for their investors and learn a lot of lessons along the way. 

Which one would you rather be? 

MHP_IRL Ep. 16 "Three Legs of a Deal"

Editor’s Note: Welcome to the companion article to Episode 16 of the MHP_IRL podcast! The purpose of this article is to expand your podcast listening experience with additional content. Companion articles will unpack larger concepts that we talk about during each episode that will give you practical and most importantly, actionable advice that you can apply to your MHP investing journey. 

It’s human nature to be greedy.

Looking back, I am truly amazed at what Ian and I accomplished over the years. The dedication we put into mobile home parks and the painful sacrifices we made—there’s nothing comparable to that feeling. 

But, somehow, in that moment, I still felt slighted at what I actually got to keep compared to the others involved. 

From my perspective, it was like this…

Ian and I did everything. Worked our fingers to the bone. And in the end, this was all we got to keep? It felt like FOMO but on steroids. But, here’s the thing, I agreed to the terms. I signed on the dotted line. It was my fault. 

Why am I publicly admitting I felt I undercut my own compensation? Because I want you to realize that even when things go well, you and those you partner with will feel this way at some point and to some degree. 

But, it’s up to you to figure out how everyone’s incentives can be aligned while also making sure you get paid. 

In this article, I’m going to walk you through how you can monetize your business from the deal itself. 

I’d like to take the time to credit my friend, Andrew Keel, for inspiring the episode 16 podcast and this article, as he once said, “a deal is like a table with three legs. If any one leg is removed, the whole table falls apart.” 

The three legs of a deal include:

• The willing seller 

• The money

• The operations 

Given that the absence of any one of those legs would kill the deal, each leg comes with inherent value due to its essentiality. In other words, you deserve compensation for bringing any one of these to the table.

Now, let’s take a deep dive into each leg. 

The Willing Seller

As one of my closest mentors says, “you can’t force someone to sell you their real estate.”

Without a willing seller, you have nothing. But, having a willing seller is worth something. 

Getting someone to let go of something they’ve owned for years, if not decades, can be excruciatingly difficult, and time-consuming.

Whether you wined and dined someone for a few years, or found an opportunity on LoopNet, there are several appropriate ways to compensate yourself or those responsible for making it happen.

This includes:

• Finder’s fees

• Front end equity promotes

• Back end equity promotes

• General partner participation

Finder’s fees are the easiest and simplest way to get paid. Finder’s fees come in the form of a percentage of the purchase price to just a flat fee. Ian and I have cashed out finder’s fees, we’ve left them in deals, and we have foregone them altogether. It all depends on the deal itself. 

As an offshoot of a finder’s fee, let’s say you obtain a broker’s license and you have a deal that doesn’t fit your strategy. If you can connect that willing seller to another buyer, you can say hello to a nice referral fee from either the seller or the buyer. 

Front end equity promotes is essentially leaving a finder’s fee in a deal rather than cashing it out. With a front end equity promote, you’ll put your own money in the deal, but it counts for more toward equity than others. Sounds too good to be true, right? 

Here’s how it shakes down: If the capital raises $100,000 and you put in only $25,000, instead of you having 25 percent, you could receive a front end equity promote that boosts you to 50 percent of the deal. Your $25,000 really counts as $50,000 and the investors $75,000 only counts as $50,000.

You may be wondering why an investor would want their $75,000 to decrease by $25,000 on day one. Simple, the investor is compensating you for finding the deal and/or for doing the bulk of the operation.

Back end equity promotes is compensation in the form of an equity boost after a certain return or internal rate of return (IRR) is achieved. Be warned like a waterfall structure, this type of compensation can be complicated. If done right, it can also come down to basics.  

Here’s a basic example: If you put up 25 percent of the equity raised of the deal and if you can deliver 15 percent internal rate of return (IRR) in the next number of years, while supporting a boost of your equity to 50 percent, then your equity gets promoted to 50 percent upon delivering those returns to your investor.

General partner participation is when a general partner takes on more risk and is thus entitled to more compensation. If you are also starting with nothing you may have to welcome someone into your GP pool. 

Now be warned: A LOT of people want to be GPs, but not add any additional value to the deal. This is not legal according to the SEC unless it is a joint venture which that party will have to justify some reasonable level of involvement. 

I encourage everyone to pay up for a good attorney to make sure you’re in accordance with the law rather than winging it and hoping you aren’t doing anything illegal. (YIKES!)

Now, let’s get real….

All of these compensation packages come with short and long-term benefits, disadvantages, and implications. 

If you are starting with nothing, I encourage you to gravitate towards front end promotes and compensation packages that allow you to eat in the short term but cap your upside in the long term.

Now, if you have liquidity, the big money is in the back end promotes.

Thinking about your end game, and what you’re trying to achieve. This will help guide your decision. 

The Money

You’ve convinced an owner to sell to you, that’s great! Now, the seller is expecting money in exchange for their asset. If you don’t have access to capital, the deal is off the table. 

What can you do? Capital can come in two forms: 

• Debt

• Equity

Now, we’ve all heard of zero down seller-carry options and all cash deals, but the majority of deals come down to a combination of debt and equity. Usually between 60 percent and 85 percent loan to value, AKA LTV. If you do the math, you clearly see why you want to maximize LTV. 

Now, just because you have a deal doesn’t mean the bank is going to loan you money. First, they’re going to look at the size of the deal. 

Smaller deals are more expensive from both the debt and equity side. Simply put, smaller deals are riskier. You’re exposed to a similar amount of risk from things like infrastructure failing while taking in less cash flow. 

Because of this, your equity partners will deserve more compensation for this additional risk. And unfortunately, banks are going to offer worse debt terms to compensate for the elevated risk. Expect to grind out call after call to smaller more local banks for these types of deals. 

Believe me, I am familiar with this. On our first deal, we called over 40 banks and received 40 nos. We had to have our investor-partner pull a favor to get the deal funded.

With that said, larger deals are no walk in the park. And, your regular investors may not be able to fund them. That’s where private equity shops come in. They can be helpful, but come with their own pros and cons. 

Remember this, where there is difficulty, there is value.

If you can secure debt where others can’t or you have a Rockstar investor no one else has access to, then that’s worth something.

And how do you compensate yourself? The same per usual—finder’s fees, referral fees, etc.

The Operations

Despite how this industry has been branded, this isn’t a passive investment. 

Someone needs to run the park or be there at a moment's notice when something happens. And, if it's anything less than a clean, stable, smaller opportunity, you can’t expect a $10 an hour occupied lot manager to have the motivation and skills to get the job done.

Worse, if you opted for a hairy deal, in my experience, you can’t even expect a $30 to 40,000 a year experienced manager to successfully turn the park around.

You’ll either need to do it in-house, like we do, or find a third-party company to manage the park for you. 

Third party management companies do exist, but let me tell you, they are way more expensive than you think. And again, if your deal is hairy, you should expect to pay up.

I have some seriously good news for those who are starting with nothing. Of the hundreds of people I’ve met in this industry, I can count on one hand the number of people I’ve met that truly enjoy being on-site turning their properties and being knee-deep in operations.

What does that mean for you? Since no one wants to do it, you can do it and for a price.

What are some ways you can compensate yourself or someone else for the operations?

• Asset management fees: a percentage of gross revenue, net operating income (NOI), or distributable cash flow.

• Front end or back end equity promotes: the thought of exchanging my sweat equity for deal equity kept me motivated to consistently put in 12 hour days on-site, hundreds of miles away from my wife, living in a double-wide with nothing in it for over a year. When structured properly, these can prove extremely effective.

• Salaries: you can straight pay someone a flat rate. While this makes budgeting and forecasting easier, you also have to open up the door for an employee not consistently going the extra mile and leaving right as the clock strikes 5PM.

Here’s the thing, incentives are everything. Even a profitable, successful deal can go south quickly if everyone’s incentives aren’t aligned properly.

You’ve really got to cut to the core of what motivates the management and be willing to adjust on the fly if you make a mistake. This even applies to yourself and your own motivations.

*Cue my time to tie up the story from the beginning. 

If you remember from the beginning of the article, I said I felt slighted. Somehow, I had undercut my compensation. FOMO, but on steroids. 

That is all true, BUT those feelings were short lived. I got over them once I remembered I started with nothing.

I had no experience, no network, or money. I was a 20 something with big dreams and little to back it up. 

The individuals we partnered with took HUGE risks on Ian and I, signing full recourse loans, and stroking big checks of their own money. They deserved every penny for stomaching our rookie mistakes and growing pains as a new company. 

Better yet, they’ve continued to be instrumental in our ongoing growth and development. 

It might be human nature to be greedy, but I personally don’t regret a damn thing about what I agreed to in the past. Let my fleeting moment of greed and weakness serve as warning to you.

You must put in the time and pay your dues all while maintaining character and humility. And the best part? It is all within your control. 

MHP_IRL Ep. 18 "The Death Threat"

Editor’s Note: Welcome to the companion article to Episode 18 of the MHP_IRL podcast! The purpose of this article is to expand your podcast listening experience with additional content. Companion articles will unpack larger concepts that we talk about during each episode that will give you practical and most importantly, actionable advice that you can apply to your MHP investing journey. 

Owning and operating a mobile home park can be a dangerous business. 

Don’t believe me? A tenant I was in the process of evicting threatened to take my life, and this is my story. 

Part One: The Situation 

It was a Thursday afternoon at about 5PM and the last week of the month. It was the slowest time of day during the slowest week of the month…or so I thought. 

We had just taken over the property 30 days ago and I was prepping new employees for rent week, as well as implementing our systems at our new property. Since nothing happened for the last couple of hours and my flight home was early afternoon the next day, I sent my employees home so I could continue implementing systems without any distractions. 

With the office locked and closed for business, I continued working. Then, a tenant started loudly banging on the doors screaming, “he’s coming to kill you.” 

Annoyed, I tried to ignore it at first because it sounded like normal rumor mill drama. I’ve heard countless, unsubstantiated claims ranging from “this guy’s a child molestor” to “he's the biggest pill dealer in the county.” 

Naturally, I figured this was another outrageous accusation geared to serve this woman’s ulterior motive. But, as she persisted, her volume progressively increased. Finally, I gave in and opened the door. I demanded that if I found out she was lying, I would kick her out of the community. To which she replied, “I’m not and you need to hear this.” 

Reluctantly, I let her in and locked the door behind her. I knew I was making a huge mistake by encouraging this type of behavior. She bagan, “The guy in lot (blank) comes over once a week and we let him use our washer and dryer because he’s fallen on hard times. He’s started to get really weird especially now that you’re evicting him. He says that he has a shotgun and he’s coming to kill everyone in the office tomorrow.” 

Naturally, I replied, “I’m calling the police so if this is true I need you to wait for them to arrive so you can fill out a witness report and be willing to testify if this escalates.” She complied. 

We called the police. It was rush hour and since it was technically not an emergency, we had to wait an hour for them to show up. At the time, I still didn’t believe her. While waiting, I started digging up anything that I could about this guy, the “killer.” 

The previous management had moved him in only about 45 days prior. The information in his file was fresh. He had a full background check on him. He was in his mid-forties and his only identity was a basic ID card from Wyoming. His proof of income was his own scribbles on a scrap of paper and his background check yielded no helpful information with a very limited credit history. The odd thing was...it was like this guy didn’t exist until about five years ago. 

As the reality of the situation sunk in, I thought through my own memory of interactions I’ve had with this guy. He’s a tall, stout, yet mild-mannered guy with desperation in his eyes. He seemed very weak, a beta male, that would never hurt a fly. But the more I pieced together the puzzle, the scarier his behavior became. 

Had he been some tall intimidatingly, confident, towering figure, I’d say he’s likely just trying to be a bully. Usually, alpha male types get positive feedback over the years of bullying and become all bark, no bite types of people. But, the killer was a beta with a history of losing and those types can snap. 

Next, I spoke with some of the residents that knew him to see if I was alone in this assessment. Every single person said this guy was a ticking time bomb. 

When the police finally arrived, I shared with them everything I knew. Both the tenant and I filled out a report but it was essentially worthless. The police told us that no crime had been committed since the threat wasn’t made directly to me. Worse, this guy was a ghost in their system too. Meaning with no active arrest warrants and since he hadn’t committed a crime, the police had no grounds to apprehend him. 

When I expressed how strange it was that this guy was a ghost for the first 35 years of his life, the police said that there was a high likelihood that this guy wasn’t who he said he was. 

So...with a credible threat and a reactive police force, and an eviction date set for weeks from now, what means did we have to protect ourselves? 

What would you have done? 

Part Two: The Plan

The first thing that happens when you realize that you have a real death threat, understandably, is that you freeze in place. Chills run up and down your spine and a cold sweat permeates through your skin. 

Honestly, my life flashed before my eyes. I asked myself if I was happy with what I had done in my life. 

I called my investor partners and explained the situation. They all recommended I get a hotel instead of staying on the property that night and heading to the airport first thing the next day. 

But here was the kicker, the killer didn’t say, “I’m going to kill Ryan.” He said, “I’m going to kill everyone in the office.” And, all of my employees lived on the property. 

What would it say about me, a leader, if in this moment I chose to run away and leave everyone else in that danger? 

The second thing that happened to me was a bit more unexpected. Once I got through finding peace within myself that I had lived a pretty fulfilling life, my mind did a 180. 

I got pissed. My blood boiled with anger. 

This is how it’s going to end? Some loser getting evicted was going to end my life? 

No. I refuse to let this happen. 

Given my experience defusing confrontational situations at the dealership to my degree in psychology to the resources that I had at my disposal, I decided that if anyone could fix this, it could be me. 

That night, I gave myself a last meal. I went out by myself, had a beer, watched some NFL, talked to some of my best friends, and grabbed a Dairy Queen blizzard on my way home. If I was going to die the next day, I was going to enjoy some of my favorite things on this earth one last time. 

During this final outing, I constructed my plan. I realized two crucial things. 

1. This guy was about to have nothing so he had nothing to lose. 

2. In his mind, I was the bad guy.

I concluded that if I could change both of those factors, even just temporarily, I stood a chance of getting him out of the property before he snapped. 

How was I going to do that?  The next day, when he inevitably came to the office, I was going to put some money in his pocket so he wasn’t quite at rock bottom and I was going to convince him that I was on his side and switch who the bad guy really was. 

If I could remove those two factors and offer him the money in exchange for him signing a document that says that if he was ever on the property again, he’d be arrested on-site, we might stand a chance. 

Part Three: The Execution

I chose to sleep on the property that night. I opted to decline the hotel because I wanted to show my employees who I was as a leader. I am in this with them. I am going to lead from the front and face the danger with you. 

To my surprise, I actually slept great that night. The killer only lived about 100 yards from me and had to know I was there as my rental car was parked outside. He could have busted down the door at any moment that night and I would have been a dead man. But strangely, coming to peace with the situation relaxed me. 

That quickly changed in the morning. 

I made the mistake of thinking I’d drive by his home and if I didn’t see him then maybe he just left. Turns out, as I crept down his street in my rental car he was very much at home. He was standing in this big window with the shades drawn up just staring at me while I drove by. His eyes were wide open, piercing right thru me. And, just like out of a horror film, he was standing there shirtless and possibly naked. One glance in his direction was all I needed to scare me into looking straight and not peeking anymore. That was one of the creepiest things I had ever encountered. 

When my employees got into the office, I caught them up to speed. We had two maintenance workers and two office ladies, one was on her way out and one was just having her first day. I’m sure that was an unforgettable first day. To my surprise, everyone bought into my plan. All of my employees were Latino. I came to learn that they were used to self-policing in situations like this rather than involving the authorities. I told my maintenance guys to be ready at a moment's notice, to drop everything and come to the office. When they got to the office, to find a way to stay as close to him as possible without raising any suspicion and be prepared to just wait in the office even if no homes were repaired that day. 

I told the ladies to be calm, but call the police as soon as they had a chance to do so without raising any suspicion if things got out of hand. 

Not long after we opened, the killer showed up to the office wearing a big black backpack with only God knows what inside of it. 

Ready or not, it was game time. 

Before he even had a chance to speak, I blurted out, “oh, I’ve got some great news for you, can you wait for me on the couch? I’ll be right with you.” 

That was strategic on my part. It took me a few minutes to get the guys back to the office and get the women in place to call the police if necessary. It changed his mindset to whatever he had planned or was expecting. Now, he was waiting for some positive news. 

Once all five of us were in place, I sat down next to the killer on the couch and I began. 

The next 45 minutes consisted of me firmly repeating myself and him talking in circles. It takes a lot of character in these moments to not call someone out on their obvious lies and inconsistencies that are geared towards them buying more time on the property. 

For example, “but what if I want to come visit my friends here” simply translates to “I'm planning on moving in with them.” 

It’s difficult to hear something like that and separate humanity from what ultimately is a ploy to manipulate you. 

The truth is, if I had succumbed to the temptation of arguing with him, I would risk losing the deal and possibly finding out what was in that ominous black bag. Everyone, myself included, was relying on me to keep my composure and keep the situation calm yet communicate that he was unwelcome. 

To achieve this, I had to bite my tongue and firmly repeat that in exchange for the check I was going to write, he would sign a document saying he will relinquish his rights to the home, as well as never set foot on the property ever again. Otherwise, we reserved the right to arrest him for criminal trespassing. 

Being repetive, calm, and ultimately threatening to take the deal away from him eventually sealed the deal. 

He signed the document, took the check, and gradually left the office and walked down the street. 

I never saw him again. 

The Takeaway 

The paradox of courage is that a man must be a little careless of his life, even in order to keep it.  - GK Chesterton. 

I want to start by saying what I did was probably stupid and a bit reckless. 

I’ve mentioned before that my first real job out of college was selling cars. Each car sale is a slow and grudging process of tactfully easing tense confrontations to deliver the warm and fuzzy feelings when your customer drives off the lot. 

It’s an emotionally draining, psychological arm wrestling match in which the customer starts off ready to fight, skeptical of everything you say and has a huge upper hand because they can leave at any given moment for any reason. One slip up could cost you a sale. 

But, in time, you slowly win their trust, talk through their concerns, and de-escalate the tension. It’s a brutal process for the sales person because customers can be unforgiving during the sales process and oftentimes get really ugly because you are sub-human to them. 

Otherwise, completely kind and normal people can become ruthless savages while buying a car. And they get away with this behavior because if they don’t buy a car, you don’t get paid. 

As you can imagine, after selling close to 900 cars in four years, I developed some thick skin and had become pretty efficient at de-escalating heating situations. 

That experience gave me the confidence, or maybe arrogance, to think I could handle a death threat. 

I don’t recount this story to make me seem like I am a superhero. In fact, I, and my employees, were scared. I don’t recount this story to scare you from jumping into the mobile home park industry. 

In fact, I tell you this story so that you can get into mobile home parks and improve your tenant’s situation. What happened to me was rare, but it can happen. 

When you get into mobile home parks, you’re getting into something that is very real. And, you may be thrusting someone else into a dangerous situaiton that you created. For that reason, that is why I shared this story. 

Whatever the problem may be, will you hide behind your desk and employees? Or, will you jump up and face the problem head on? 

MHP_IRL Ep. 19 "Finding Business Partners"

Editor’s Note: Welcome to the companion article to Episode 19 of the MHP_IRL podcast! The purpose of this article is to expand your podcast listening experience with additional content. Companion articles will unpack larger concepts that we talk about during each episode that will give you practical and most importantly, actionable advice that you can apply to your MHP investing journey. 

How do you find a good business partner?

If you know me, you know that I am SO SO thankful for my business partnership with Ian Tudor. For us, it was dumb luck. Ian and I grew up together in the same neighborhood as children. 

But, from our conversations, I think we both agree that finding a good business partner is exactly like dating. 

First, there is no blueprint. There isn’t a step-by-step process that you can follow to find the perfect person. 

Second, there isn’t a time limit. Like dating, you don’t want to rush into anything serious. You have to get to know someone first. 

As Ian puts it, “There are seven billion people on this planet. Give yourself the best shot to make that happen. Take actions and steps to put yourself in front of people who you think would want to be business partners with you. Think about what your strengths are, what you're lacking, and what you are looking for.” 

In this article, Ian and I break down some key points as to why we think our partnership works so well. 

#1. Two is greater than one is greater than three…depending on your preferences.

For those who work out, I’m sure that you agree, there is a difference between when you’re working out alone versus when you’re working out with one other person versus when you’re working out with two people. 

When you work out with one other person, there's social pressure. You have to do one more rep. You have to go a little bit harder. Why? Because you have that person there to help keep you accountable. 

But...when you add another partner to the group, working out becomes a social event instead of an actual workout. You get the other two people talking while you’re doing your set and instead of pushing you to do one more rep, they’re sitting on the sidelines joshing each other. 

One thing that Ian and I realized was that we were working harder without really even knowing we were doing it because we didn’t want to let the other person down. That’s why having a 50/50 business partner can help you push through the lazy times because you have someone who is there to keep you motivated. 

“I’ve always been someone who has always accomplished more when I’m working with someone,” said Ian. “It’s something I learned in the 20s, just being aware of when I got the most work done. Ryan and I have similar ideas of where we want to take this business and we speak quite frequently on the phone and it allows me to share ideas, which is really important for me, and it helps me to know that we are doing the right things.” 

In business, you are the easiest person to fool yourself. - Richard Fineman

“Knowing this is extremely important, especially in business. When you’re taking in information to have someone to counterbalance your thought process, as well as your work ethic, it is helpful.” 

#2: Learn how to disagree well. 

If you ask my wife why we get along so well, she’ll tell you that we learned to disagree with each other well. Even if you don’t see eye to eye, you want to make sure that we don’t take it personally. We act and speak normally. It’s how we get through really tough disagreements with civility and humility. We respect and acknowledge how the other person is feeling. It helps us move forward without developing contempt. 

And, Ian and I do the same. 

“The people who know us know that I am the hot head in this partnership and Ryan is extraordinarily skilled at taking heat very well,” Ian said. “For me, allowing me to express myself in the most authentic way possible is extremely important for me to be vulnerable and authentic with the way that I am wired. That has allowed me to express my feelings and Ryan never takes it personally and he will find ways to get to the root of what I am actually trying to get at. That has been extremely helpful and I try to do the same when he’s expressing a heightened emotion that I may not be feeling.” 

Ian went on to say that, “It’s really about understanding that we’re both going through the same mission, the same goal, and we are doing this to achieve our greatest dream and it’s not to tear the other person down, but building towards something and sometimes we’re human and our emotions come forward ahead of logic and we’re willing to forgive each other over that regardless of how that situation takes place.” 

#3: It’s okay to bring comedy into a business partnership. 

Ian and I make fun of each other a lot. We make fun of ourselves, and we make fun of others. 

For me, one big way that I cope with stress and get through difficult conversations is through comedy.

It’s hard to be vulnerable with someone and have the trust to sort through emotions. A bit of comedy helps bring down the situation so that you can hold yourself rational. 

#4: Your incentives must align. 

Get yourself a business partner that has the same goal in mind. Ian and I have a mutual goal that transcends just operating a mobile home park. It’s a great social goal. We want to effect positive change with what we’re doing through education and financial well-being. That mutual goal gets us through the hard days. 

When asked, what are some other ways that we keep our incentives aligned, Ian had this to say, “Number one, have a 50/50 ownership of the business. No one owns more than the other. No decisions are trumped. We will stalemate each other if we don’t come to some sort of agreement. Secondly, have an idea of how you want to grow.  There are a lot of ways to grow in this business and for us we both agree that a slower, more sustainable strategy makes more sense. There is no incentive to purchase something that would put us in a financial situation that could be detrimental, especially because we are young and use recourse debt.” 

#5: Acknowledge that emotion can overpower logic. 

This is something that is very uncomfortable to think about. We all want to think that we are these stoic creatures with no emotions when it comes to business. That is just not true. 

For example, Ian and I bought a property that I thought had the potential to be a huge operational time suck and I was thankfully very wrong. In retrospect, I can laugh about it.

I’m very thankful that Ian helped me keep my grounding. I was doing the analysis paralysis thing, and he was like, “Dude, relax. If it gets out of control, we are the team that can put a bunch of time into this and get it right.” 

I think having a business partner to bounce those vulnerabilities off of and be like “this is what I’m truly thinking and I’m seriously concerned” is important. For him to be there and validate those feelings, even while disagreeing, is huge. Not only that, but he helped me get through those concerns by asking me to be very specific in those concerns. 

“If you ever overhear Ryan and I in a conversation and either one of us says, ‘do the math,’ in a very stern voice, you know that we’re talking about this because numbers usually speak louder and more rationally than the feeling towards certain things,” Ian said. “For us, another thing that we struggled with is strategy. Should we use business partners? Should we go into more tertiary markets? That has allowed us to have those conversations and have a unified theme to help us better understand where we’re at.”

#6: Be ready to admit you are wrong immediately. 

As a salesman at a car dealership, it’s really hard to handle the amount of pressure a customer will put on you to give them vital information like the invoice price on the car. 

Eventually, you will crack. The problem is that when you go to catch your manager up to speed, and they go “how did they find out the invoice price,” the manager will yell at you for giving them that price.

It’s unpleasant, but the manager needs to know that. It’s vital information to close a car deal. The punishment you get for divulging the invoice price sucks, and it can condition you to lie. 

But, for me, I would rather look like an idiot so that everyone is operating in fact. 

In the mobile home park business, I try to create an environment that is comfortable for someone to admit that mistake so that we can address it head on. 

“One thing that I do when I make a mistake in our partnership is call Ryan right away and I let him know,” said Ian. “That has allowed us to get to the answer. We have a mutual understanding to be as transparent as possible because it helps us get to our goal. We’re not hiding behind an ego. We want to be understanding. That’s one of things that we both do well.” 

Here’s the thing, as Ian says, the mistake isn’t as big as you think it is and it’ll be less of a mistake if you can stop it in its tracks. 

“I really liked this contractor,” Ian recounted. “He drove from Asheville to Spartanburg to see me because he wanted to get to know me. Little did I know that it was a giant red flag for Ryan and he had a feeling that this wasn’t a good situation, but I gave him money in his name and I got all of the documents signed appropriately. It gave this contractor power and we ended up losing $4,000. Ryan didn’t berate me for that. Now we have a process in place for vetting contractors. We still make mistakes, but it allows us to get better.”

Getting better is exactly what Ian and I are doing, and I couldn’t be more thankful. 

The Takeaway

Like dating, a business partnership can grow into something beautiful or break down into a nightmare. It’s all about how you go about it. 

When looking for a partnership, don’t rush. This is a defining moment in your life because of the long-term effects you feel from it. 

Go out there, put your vetting hats on, and get to it!

MHP_IRL Ep. 20 "How Smart People Outsmart Themselves"

Editor’s Note: Welcome to the companion article to Episode 20 of the MHP_IRL podcast! The purpose of this article is to expand your podcast listening experience with additional content. Companion articles will unpack larger concepts that we talk about during each episode that will give you practical and most importantly, actionable advice that you can apply to your MHP investing journey. 

You are your own worst enemy. 

How true this phrase can be in the mobile home park industry. 

Like any industry where decisions need to be made, smart people (really, really smart people) can make the dumbest mistakes. 

How do I know? Because I’ve seen it AND I have experienced it. 

From placing capital hastily to employing aggressive home sales strategies without proper information and even misevaluating the work it’ll take to operate effectively, it’s happened to the best of us. 

Making these horrible, and sometimes detrimental decisions, happen for a variety of reasons, of which I’ll jump into during this article. 

Always make this assumption: as said by Richard Feynman, the first principle is that you must not fool yourself and you are the easiest person to fool. 

My hope is that you’ll learn from these bad decisions and avoid them like the plague. 

Bad Decision #1: Believing in industry hype

Why is this industry so over-hyped? Time Freedom Dreamers and the Syndicators. 

The number one reason I hear as to why individuals want to break into the mobile home park industry is this: “I want to quit my job because I feel stuck in it.” And further, these individuals have bought into a very very popular idea of achieving time freedom. Which don’t get me wrong is achievable, but these people have larger dreams than just operating a mobile home park. 

The problem with this is it doesn’t happen immediately, and that causes issues long term because as much as people want to believe this industry is passive, it is not. 

Now, you might be thinking the time freedom achievers are what is making the industry so hyped. While they are the overwhelming majority of individuals trying to break into the industry, the ones that actually affect price changes are the large scale syndicators, AKA people with big time money. These are people who go out, raise money, and look to scale up a portfolio. 

Of course, there are small, medium, and large syndicators. And the larger ones affect the top level change the most. How? 

Bad Decision #2: Executing macro strategies for micro properties. 

The large syndicators have upwards of two hundred million dollars to place if not way way more than that. When you have that much money, you have options and pressures that other companies and individuals do not have. 

As a large syndiator, lower cost of capital can get you into deals. You can outbid others while still making your returns. But it's more than that. I’ve spoken with several larger operators that say things like, “I’ll buy a four star property sub-four cap because I have a two star property that is hemorrhaging money, but FannieMae won’t refinance me so I’ll overpay and possibly even lose money on a nicer stable property and cram the lower, highly profitable property into that Fannie loan so I can refinance it more attractively.”

From a macro standpoint, that’s a clever play so long as that syndicator is achieving the returns that they need. 

This is a micro play that a small to medium sized player can’t or won’t do. But here’s the problem with overpaying for properties that serve macro strategies. The word gets out. The sale price is then used as a comparison to other local properties. 

Bad Decision #3: Using the wrong comparisons, which are the trickle down effects of the word getting out.

But these larger operators are buying huge nice stable properties, why would a broker or local owner ever use one of those properties as a comparison? 

If you’ve cold called before or looked at a broker offering memorandum (OM) then that question should make you chuckle. Brokers and owners have the same goal...selling properties for the highest price. 

I’d like to think that most owners or brokers on a two star asset will be rational enough to not use a four star property as a comparison but that’s not the reality. 

But here’s the thing, you shouldn’t blame local brokers or owners, they want every penny they can get. Where logic should put those folks in their places, unfortunately, there’s more in play. 

Bad Decision #4: Money has to be placed. 

There’s a reason why Ian and I didn’t have a fund in 2019. We didn’t want to feel the pressure of having to allocate capital. I spoke to fund managers so desperate that they were nearly begging for deals. 

Can you imagine convincing several people to write big checks on the premise that you are going to hit big returns and then you didn’t even place the capital? That pressure creates an environment ripe for psychological self trickery. 

Here some real justifications I’ve heard: 

• It’s a high up front price, but I will appreciate it. 

• Industry consolidation will save me. 

• It's about my internal rate of return (IRR), not about my year three profit and loss (PNL).

• It’s tertiary but the sub market is really strong and the demographics misleading.

•  We wanted all tenant owned homes, but we now know that that is unrealistic. 

• This is only a light turnaround so we can handle it. 

• It’s not our original thesis, but this opportunity makes us competitive. 

• We’re paying up to get a foothold in this market. 

• I’m comfortable only making a four percent return levered. 

• I know my assumptions are a bit aggressive but we believe we can achieve this. 

• It doesn't look good but we’re smart enough to figure this out. 

To be fair, these phrases have zero context. The individuals responsible for saying them can’t defend their statements. But that’s the point - stripping out the context to separate logic from emotion is the only way to evaluate these decisions. 

Smart people make dumb decisions all of the time. How? They add logic to emotion without even realizing that that is what they’ve done. 

How does this apply to local brokers and owners using inappropriate comparisons? If you’re desperate to place capital, you may not initially agree with the value, but some will talk themselves into this. And, a market is what someone is willing to pay for a property. 

The inappropriate comparisons become appropriate comparisons because people are buying the properties at those prices. Clearly, this is pressure to place capital, which influences bad decision making. But shocker, there’s still more at play. 

Bad Decision #5: People play this game called social comparison.

Social comparison can make things complicated. People signal social comparison all the time by showing how much they own or by showing how busy they were at closing deals. 

I personally made the mistake of believing others were just making millions of dollars, meanwhile I couldn’t find a deal to save my life. The truth is, as I started to unravel a lot of these signalers, I found that they were omitting some key details of what was really going on. 

The point is, you can’t let what you think others are doing affect your business negatively. 

What things happen to you as a result of social comparison? 

• FOMO (Fear of missing Out) 

• Competition (or rivalries), which in turn makes you want to win more than making smart decisions 

• Winner's curse, which is a phenomenon that occurs commonly at auctions where the winner will continue to bid beyond their highest and best due to fear of losing the deal or just getting caught up in the heat of the moment

• Bigger is better has been a belief held throughout history. It’s quite literally littered with examples of why growth equals progress wound up meaning kings, dictators, and people of power losing after biting off way more than they can chew. Business is not exempt from this trap. 

• Scarcity mindset is about being attractive isn’t about having more. It’s about needing less. Feeling like you don’t have enough and that there aren’t enough deals going around will lead you to some bad decisions. I’ve been in touch with people who have bought properties 15 years ago for prices that aren’t even market today. Why? Because they thought those deals were drying up. 

• The do something syndrome is a productivity feeling. Warren Buffet once said that most people would be uncomfortable with the amount of money that he had sitting on the sidelines. Some people are just deal guys. Acquiring deals is really fun. It feels productive, but just because it feels productive doesn't mean it actually is.

Bad Decision #6: Underwriting because you’re being overly optimistic.

The culmination of these psychological traps is overly optimistic underwriting. The pressure to place capital, the fear of missing out, believing bigger is always better, or simply just feeling like you need to do something, can lead to you justifying low cap rates like triple lease cap rates, assuming infill can be done and within a very aggressive timeframe (shocker: it’s very expensive and time consuming and the used market frequently dries up).

This mindset can also lead to aggressive home sales strategies without home sale professionals or a strong market demographics suggesting the market actually has an appetite for more housing. This makes the first two to three years of your pro forma a complete blood bath, again with the assumption that you’ll eventually be profitable.

Now only that, but it can even extend to underestimating the variance of park owned home maintenance and deferred maintenance and additional workload associated with park owned homes. 

Here’s the thing….

Everyone makes bad decisions. It really comes down to what lessons are learned?  

I don’t recount these stories and pass along this information to scare you. In fact, it’s the opposite. I want you to learn from these individual’s past mistakes and come out on top. 

The question you should be asking is not how could anyone come to the same conclusion other’s have? Rather, how do I avoid tricking myself?  

What Will Break

What Will Break

Editor's Note: Welcome to the companion article to Episode 6 of the MHP_IRL Podcast! The purpose of this article is to expand your podcast listening experience with additional content. Companion articles unpack more significant concepts that we talk about during each episode to give you practical and actionable advice. 

No matter what you do, things are going to break at your mobile home park. In this episode, you get actionable advice on how to plan and address unexpected issues during ownership. 

"The first thing that's guaranteed to break? The rumor mill." 

Of all the things that will break when you’re a park owner, trust is the biggest one--let me explain. 

Here’s a hard pill to swallow: The people in your park and community are going to talk about you, and it's not always going to be good. The gossip can get nasty--whether it is true or not, it all comes with some liability to you as the park owner. 

"Your contractor is dealing drugs."

"Your employee touches children."

"My neighbor is stalking me."

Yes, we’ve heard it all.

And when hearing accusations like this, Ian and I have to take action. 

So what did we do? 

We investigated each claim thoroughly.

The conclusion? We found zero evidence. 

The response? Almost identical in every case. 

We’d bring the concern back to the tenant, to assure them that we had looked into it, and when confronted with our findings their response was something like...

"Well, look at him. Doesn't he look like a guy that would do something like that?"

The lesson learned here is that people are going to make outrageous claims. It's in their nature, people can be short-sighted and self-interested. 

And that’s not going to change. 

They will do and say whatever they feel at that moment, and they're not always going to think about the long-term consequences.

That's where you come in. 

You need to think ahead, thoughtfully plan, and practice a little damage control when the rumor mill gets started. 

You can't stop rumors, but you can mitigate them. Here are some tips to help:

1. Find the connectors and influencers in your community. 

Your MHPs are microcosms of the larger communities we’re all a part of. They’re the places where people live, work, and interact everyday. And like any other community, you’re going to have your influencers. 

Your tenants may not have voted for an official mayor of the community, but you better believe there is one. 

You'll find that only a handful of people have all the social status and influential trust amongst the community. Discover these people and treat them like gold because they wield all the power.

I've found that the person who first exposes an individual to information stands the best chance of long-term influence over their perception. What makes influencers so valuable is that they’ll help you control the way that information is shared with the rest of your tenants. 

And controlling the narrative is a powerful tool for keeping the rumor mill at bay. 

2. Deliver consistency

Once the rumor mill gets cranking, emotion has a habit of trumping common sense. 

But just because your tenants become reactive, doesn’t mean that you have to. 

Be consistent with your actions and messaging. Demonstrate at all times an air of confidence and competence and it’ll put your tenants at ease.  

For example, Ian and I have a motto of safety and cleanliness--and we emphasize that in every interaction with our tenants. 

When conflict rears its ugly head, our tenants pick up on the way we carry ourselves, and the consistency of our message. 

Regardless of what you say, your behavior should be saying “I’ve got it under control, you can trust me”. 

3. People always remember how you made them feel.

There's a quote by Maya Angelou that I carry with me.

"I've learned that people will forget what you said, people will forget what you did, but people will never forget how you made them feel." ― Maya Angelou.

Your tenants are going to disagree and in those situations they may try to use you as the middleman. I recommend not getting involved in any capacity unless there is a direct violation of your motto or code of ethics. 

So within our personal motto, Ian and I only respond to tenant disputes if there is a direct threat to cleanliness or safety. Everything else is just noise. Sticking to our motto not only delivers a consistent message to our tenants, but it also protects our energy as park owners and saves us from getting involved in every tit for tat spat between residents. 

If you do need to get involved, make sure that your tenants feel heard and that their concerns are important to you. You can get a long way by simply validating someone’s feelings. 

Contracts Will Break

When people want to break their contracts, it can get messy. There are a few ways to avoid this issue successfully:

1. Most preferential option - broker a sale between the person moving out and someone who wants to move in. 

This is where your influencers are going to play a huge role, and the reason that you should treat them well. Ian and I have had many influencers step in and help us broker favorable deals with tenants. 

2. Your next best option - Buy the home from the tenant.

You have the upper hand in this situation. Typically, people who are in a position where they can't afford a few hundred dollars in lot rent are in a place where they can use some serious cash. 

A word of caution here:

Just because you have the upper hand does not mean that you should expect these situations to be easy. Remember, you’re dealing with a person who has found themselves in dire financial straits, this can bring out the worst in everyone. Exercise some compassion and patience in these situations to reduce stress and tension for all parties involved. 

3. My least favorite option, but it is an option - Tow away.

There are mobile home movers that can legally tow a mobile home away like a car. I’ve found that the presence of this option is actually more effective than the option itself. When you’ve found yourself with a tenant who has dug their heels in during a negotiation, it is a helpful reminder of the fact that they cannot stay on your property indefinitely without meeting you in the middle. Usually mentioning a tow away is enough to get your tenant to play fair in your negotiations. 

Mobile Homes, Utilities, and Everything In Between Will Break 

Things are going to break, it’s not a matter of it, but when. And when it does happen, it’s important that you’ve built a team of trusted individuals to fix the things that you can’t do yourself. You need contractors you can trust, are knowledgeable, dependable, and aren’t going to gouge you on price. There's no secret or shortcut to finding good contractors--you’ve got to put in a little due diligence to explore your options and find the best one for you. 

I personally went through over 30 contractors before finding my current go-to guy. 

Here’s a few of things that are definitely going to break down at some point in your MHP journey: 

• Your most considerable risk is HVAC. It is  expensive just to have someone come out and troubleshoot the problem, nevermind making an actual repair. 

• Roofing comes in strong second place. You can spend thousands of dollars on replacing one double-wide.

• Water leaks will ruin carpet, floors, carpet, membrane, drywall, etc.

• Electrical issues will still cost a pretty penny. 

• Underground leaks are bound to happen. Here’s where having a great plumber on your team pays off. 

• Submeter: At times a park’s master meter reading will be different from each tenants. When submeters break, they break in favor of less usage rather than more, meaning you as the park owner are eating that extra cost. And in some cases, identifying the underperforming submeter is like finding a needle in a haystack. 

Infrastructure and utilities matter--and if you have the proper systems and people in place, you will make more money and spend far less on repairs. 

What Won’t Break? 

Focusing on how you make people feel. 

Ian and I got the worst call that we could possibly receive one day. 

There had been a shooting at our mobile home park, and it was all over the news. 

A situation like this is enough to make even the most seasoned investor lose their cool. 

What did Ian and I do about it? 

We called the leading people of influence in our mobile home park. 

We wrote up a statement for both the press and tenants. 

We delivered the same, consistent, familiar message we always do--cleanliness, safety and security. 

Most importantly, we went to the property and let people hear the confidence in our voices in person. 

Showing your face after an emotionally charged event can be the difference between a nightmare and a mere speedbump. 

In short, it's your responsibility to make people feel important, safe, and valued. Not only is it the right thing to do, but people will reward you with their loyalty.

Having a solid plan of action based on what you know is infinitely better than winging it. Things are going to break. Will you be ready when they do? 

Check out the MHP_IRL Podcast for more stories about my investing journey with my company Archimedes Group. 

Due Diligence Nightmare

Editor’s Note: Welcome to the companion article to Episode 3 of the MHP_IRL podcast! The purpose of this article is to expand your podcast listening experience with additional content. Companion articles will unpack larger concepts that we talk about during each episode that will give you practical and most importantly, actionable advice that you can apply to your MHP investing journey. 

“I’m going to completely lose my shirt, what did I get myself into”

I stared up at the ceiling, and said it outloud into the darkness. My wife was fast asleep next to me, blissfully unaware of the panic that sat in my chest like a 1,000 pound anvil. Anxiety ate away at me and made sleep impossible. “She’s going to hate me, I’ve failed us” I thought nervously. Here I was, only on my second MHP deal, and I had to sit her down and explain that I’m about to lose all of our money. 

Ian and I had just spent the last few weeks  weaving our way through a massive water issue at our newly closed deal. At first, the water leak didn’t intimidate us. “Expect the unexpected!” we thought at the time, not realizing how naive we really were to the massively complex issue that would unfold before us. 

But here I was, I spent the day (and many days before that)  making phone call after phone call that all got me to the same conclusion..

You’re completely screwed. 

Even though nobody said it outright, I sensed exactly what they were thinking every time I spoke to someone else about the water repairs. “Sorry can’t help you, and boy I’m sure glad I’m not you guys right now!”...

It’s 2021 now, and at the time of writing this I’m more than 3 years removed from that terrible sleepless night. But writing these companion articles has given me a lot to reflect on from those early years. 

Allow me to set the scene for you...

Shortly after we closed on our second MHP deal, Ian and I realized that we had a water issue. We just didn’t realize at the time how BIG of an issue this was going to turn out to be. With every turn, the issue got worse and worse, and the repair bill seemed to grow exponentially with each new piece of information we discovered. 

Even though this was our second deal, it was really the first time that we were closing on a park without an experienced park owner on our team. We did everything right, checked every box on the due diligence list, but somehow, we missed something. And that something turned out to be a $100,000+ water system repair. 

To make matters worse, not a single plumber in the area wanted to touch our problem. It was too complicated, the blueprints for the original system were non-existent, and the system was a mess. 

I go into great detail about the water issue in this episode of the podcast, if you’re interested in learning just how bad it was (hint: it was really friggin bad). 

In this article, I share with you some of the takeaway lessons from our due diligence nightmare. 

1. Everything still turned out fine

Yes, the water issue was a struggle. Partly because the nature of the problem itself was extensive, but also partly because Ian and I were still so inexperienced at the time. It was only our second deal, and we hadn’t had enough experience as park owners yet to know how good deals can go bad. 

But, at the end of the day, the sky didn’t fall. And I am sitting here, from the comfort of perspective 3 years later, to tell you that I did NOT lose my shirt (nor do I lose a wink of sleep over the issue today). 

What I learned from being in the trenches on this nightmare is that every single problem that you encounter does have a solution.

Some problems require more time, energy, and sheer force of will than others. But there IS a solution somewhere along the line. 

If you learn to be absolutely relentless in your problem-solving and creativity you will always find a way to come out of a bad situation in one piece. 

Today, Ian and I are well aware that there’s a possibility that we’re missing something during our due diligence process, that there may be some unforeseen issue that arises.  But we are prepared for that eventuality, and we don’t let it stop us from closing deals and making money. 

1. Fear will hold you back more than anything else

The real estate market is full of competition, this is probably even more true today than when this episode was recorded in 2018. Understanding how to quickly and efficiently analyze deals has to be a skill you hone incredibly quickly in this industry. 

And once you’ve found that diamond in the rough, you’ve got to execute. Before a more fearless investor comes along and snaps up your opportunity. 

This situation taught me to walk hand in hand with fear daily as a business owner. To make it as familiar to me as my morning cup of coffee.

Because there is no such thing as overcoming fear, you simply learn to quiet the voice and trust your instincts. 

I am here to tell you today that any action that you don’t take because of fear is going to cost you so much more in lost profits than any mistake that you might make. 

In this industry it’s called analysis paralysis and it’s very real. Don’t let yourself get caught in the trap. You’re never going to have every bit of information you need to execute flawlessly. The more comfortable that you get with that unknown, the better off you are. 

Do your homework. Lean into the fear. Execute your decisions. 

1. Anything that can go wrong, will

Otherwise known as Murphy’s Law--there’s a reason that mathematicians tout this logic as sound, eventually everything can and will break down. It’s not a fact that we can hide from in life, and MHP investing is certainly no different. 

In your own investing journey, you will save yourself time, energy, and sleepless nights if you just accept this now to be true. And in my opinion, you can actually find some comfort in this statement as an investor. 

It means that no matter how prepared you are (or like in our case, how sound your due diligence is)  eventually, you’re going to run into problems. And it’s not a reflection on YOU. It doesn’t mean you’re a failure. What matters most  is how you handle the struggle. 

Are you able to keep your head about you? Examine every angle, and decide on a plan to fix your problem? 

If you can keep this perspective as you move throughout your investing journey, you’ll be better equipped to stop the panic when a situation arises. 

Remember investors, due diligence is a necessary process, but it is by no means a hard science. There is no way for you to see everything that can possibly go wrong on a deal. I encourage you to get out there, get in the trenches, and allow yourself to be banged up a bit. You’re going to learn so much more along the way, and take it from me, you’re going to come out okay!

Check out the MHP_IRL podcast for more stories about my personal investing journey with my company Archimedes Group. 

End Game: To Thine Ownself Be True

End Game: To Thine Ownself Be True

Editor’s Note: Welcome to the companion article to Episode 1 of the MHP_IRL podcast! The purpose of this article is to expand your podcast listening experience with additional content. Companion articles will unpack larger concepts that we talk about during each episode that will give you practical and most importantly, actionable advice that you can apply to your MHP investing journey. 

“The more we learn, the more clearly we can focus the lens through which we see the world” 

-Stephen R. Covey 

Meet John and Sam, two investors ready to start their mobile home park investing journey-- both with wildly different goals for their lives. 

Sam is a comfortable middle-class banker and family man looking to replace $100k in annual income. Sam has a modest amount of capital to invest and he wants to use MHP investing to free himself from the grind of the corporate ladder to spend more time with his daughters. 

John is a bit more of a mover and shaker, with $2 million in investment capital at his fingertips. John is looking to replace $500k in annual income with MHP investing. 

John and Sam have the exact same investing strategy--each of them wants to own 2,000 pads in 5 years to accomplish their dreams. 

Using this strategy, which one of these men will build the life of their dreams investing in mobile home parks? 

My answer?

NEITHER.

To which you might say, “Ryan, how can you say that neither of them will be successful? It seems that they have a plan, and they’ve both got some capital to invest. Surely one of them will make it work?”

And you’re right-- both Sam and John do have a plan. The only problem is, their plan is not in the best interest of John OR Sam. 

Because their plan is based on someone else’s goals and ambitions and does not take into account the individual wants, needs, and desires of these two men.

In this article, I break down how you can avoid the trap of being like John or Sam, and how you can create your own unique deal criteria that will help you build the life of your dreams. 

Cookie-cutter deal strategies are killing your dreams

Everyone wants a template these days. We want to cut to the chase, cut out the middleman, and get to the point. The mobile home park investing space is no different. In the industry’s desire to create content that is easily digestible for the largest number of people, there have been sacrifices made along the way. 

It’s incredibly easy to subscribe to someone else’s version of success. In 2021 we don’t have to look very far to see in vivid detail on social media exactly what someone else has done to breathe their dreams into life. It’s easy to see someone else’s highlight reel and think “I have to start doing what they’re doing”. 

One major blight on this industry is a singularity of thought. The idea that there are only a handful of ways to be successful and that everyone must take the same predetermined paths with their mobile home investing strategy. 

The biggest problem with this way of thinking, however, is that it leaves out your personal goals entirely. I don’t think there’s anything wrong with incorporating new habits and taking action. But as Tim Ferriss says in The 4-Hour Work Week: 

“There’s a difference between being productive and just being active”

We jump to take action hoping for the same results without filtering ANY of the information through our own personal lens. 

Or without stopping to first ask ourselves “is this going to serve me?

“Will this create the life I want?”

Because a template strategy doesn’t care whether you want more time with your family, or whether you want to spend weekends in Fiji with your model girlfriend. A template is just that, a basic, bare-bones way of thinking that is interchangeable to everyone. 

Remember John and Sam? In the podcast episode, I break down the actual math of how the strategy applies to both of their lives (hint: it doesn’t work out for either of them). But what’s most important for our conversation here, is to remember that both of them do share one thing in common:

Both John and Sam would have wasted time and energy chasing deals that were NEVER going to serve their goals. 

What John and Sam needed was a quick and efficient way to analyze deals--they did NOT need another boilerplate investing strategy.

John and Sam needed deal criteria that was specific and unique to their personal life goals. They needed a brand new lens to filter their investing decisions through. 

Starting out with the end in mind

The very first step in creating your own unique deal criteria is to understand exactly what your end game is. 

When Ian and I first started the Archimedes Group, we shared something similar with John and Sam. 

We wanted our careers in mobile home investing to act as a medium to deliver the kind lifestyle that we were both desperately seeking. 

If we take a closer look at the example of John and Sam we can see how both would have wound up deeply unhappy with the results that their strategy produced. 

Sam would have realized that the income generated from his investing strategy actually drastically exceeded his desired $100k goal. At first blush, this sounds like a huge plus right? But for Sam to sustain the earnings generated by his investing plan, he would have had to work just as many hours as he did in his corporate job (goodbye family time). 

John would have realized that despite his significant startup capital, that the math just didn’t work out in his favor. He would have spent every dime of his $2 million startup capital to STILL fall about 1,600 pads short of what he would have needed to replace $500k in annual income.      

For other people, with different circumstances, the cookie-cutter investment plan may have worked like a charm. But for John and Sam, it was a dream killer. And if John and Sam had set out to copy that cookie-cutter template, they would have set themselves up for years of disappointment, frustration, and possibly financial ruin. 

This is why starting with the end in mind is so critically important when you are creating your unique deal criteria. 

During the episode, I mention the book “7 Habits of Highly Effective People” and how that book profoundly impacted my thinking. Author Stephen R. Covey devotes an entire chapter to the concept of beginning with the end in mind. One of the biggest takeaways from the book is that knowing yourself incredibly well should be a foundational component to any endeavor that you embark on in your life. Stephen says that we should make it a practice to take a personal audit of what we do and DON’T know as a way to understand our personal weaknesses. 

He goes on to say that:

“The ideal, of course, is to create one clean center from which you consistently derive a high degree of security, guidance, wisdom, and power, empowering your creativity, and giving congruency and harmony to every part of your life..”

That’s exactly what your aim should be when creating your unique deal criteria. To create a center that is focused on the kind of life you want to build, and to constantly make sure that each investment you make is driving towards that goal. 

Starting with the end in mind doesn’t mean racing haphazardly towards some rigid and fixed goal in the future. To do that would limit your ability to integrate feedback from your experiences and the insight you gather along the way.

The beauty in starting with the end in mind means that by constantly filtering your decisions through the lens of your ideal life (your endgame), you’re actually giving yourself the flexibility to quickly and effectively kill anything that isn’t helping you to achieve that lifestyle. 

Starting with the end in mind is actually an exercise in fixing your mind on immutable core principles that define your life and personal mission statement. Those principles then become the lens by which you filter all of your investing decisions. 

When you adjust your mindset to put your dreams first, you have a sense of mission about what you’re trying to accomplish and you become ruthless in your decision-making to protect that vision. 

To take a huge expansive concept and make it as simple as possible: 

If you know exactly what you WANT, you can figure out exactly how to get there. 

And by keeping things simple, you’ve just unlocked a brand new superpower. 

The Hedgehog Concept

This concept is made up of 3 intersecting circles: 

1- What you are deeply passionate about

2- What you can be the best in the world at

3- What drives your economic/resources engine

Jim Collins uses the hedgehog theory in his book “From Good to Great” as a way to highlight this important concept:

“Transformations from good to great come about by a series of good decisions made consistently with a hedgehog concept, supremely well-executed, accumulating one upon another, over a long period of time”. 

The Hedgehog Concept is not a strategy to BE the best, but rather a strategy to understand what YOU can be the best at. For the Hedgehog that means focusing on its natural ability to curl itself into a tiny impenetrable ball of spines and spikes, rather than spending its energy trying to outwit the cunning fox.

For you, it means simplifying the world around you and focusing all of your energies on the things that you are passionate about. It means asking the RIGHT questions that are at all times prompted by the 3 intersecting areas of your passions, your unique gifts, and your personal access to resources. 

I don’t know about you, but there’s nothing that I’m more passionate about than waking up every single day knowing that I’m living the life that I want. 

Mobile home park investing can be the land of opportunity, but if you’ve spent any time in the real estate world you know that the window of opportunity for smoking deals does not usually stay open for very long. To capitalize on those diamond-in-the-rough deals (especially in a frothy market) you’ve got to move FAST.  This means it’s absolutely critical that you’re able to create your own unique deal criteria and effectively use it to analyze potential MHP deals. 

By creating deal criteria that are focused on your endgame AND have been simplified against the core principles of passions, your unique gifts, and your access to resources you now have an efficient and effective way to analyze deals. 

Let’s take a look at John and Sam again:

Sam, now armed with the information he needs to create his own unique deal criteria, comes to an exciting realization. He doesn’t actually need to work himself into the ground attempting to secure 2,000 pads. Because by focusing on his endgame Sam quickly realizes that raking in hundreds of thousands of dollars a year isn’t actually his goal. 

Maintaining his current standard of living and spending time with his family is Sam’s endgame goal. By starting with this in mind, and reverse engineering his unique deal criteria, Sam realizes that he could totally achieve this in 5 years (or less) by owning just 2 or 3 mobile home parks. Furthermore, Sam realizes that he could accelerate this by understanding that his modest access to resources (hedgehog concept) meant that he should be looking for deals that are turn-key or offer seller financing. 

John’s story on the other hand,  is a classic case of confirmation bias. John knew that he had money to invest and that 2 million dollars was no modest sum. John also knew that MHP investing was a viable way to build wealth because John had seen people all over Instagram who were absolutely killing it in the market. “I’m a smart guy with money to spend, I can make this work for me,” thought John. Everywhere that John looked seemed to confirm that all he needed was money and drive to be a successful MHP investor. 

But thankfully, John is a smart guy and he decided to pump the brakes for a moment, forget what Instagram was telling him, and apply his own unique deal criteria to the situation. He is smart enough to start with his endgame in mind. He knows that he wants to replace $500k a year in annual income and that he wanted to use MHP investing to get there. But when John applied his unique deal criteria and reverse-engineered his endgame, he quickly realized that the numbers just didn’t add up.

For John, being an owner-occupied operator didn’t make sense. Not only did the numbers not work in this frothy market, but when he paused and considered the kind of time investment this would take, he realized that he needed to change his MHP investment strategy.  John enjoyed his golf on the weekends, and had worked too hard in his life to go back to the nitty gritty of living in and actively managing a mobile home park. 

John decided that he was going to diversify, by splitting his $2 million in capital down the middle. John used his unique deal criteria to only invest in 1 or 2 diamond-in-the-rough deals so that he can get his foot in the door with MHP investing. He decided to hedge his bets by investing the other half of his capital in the stock market (an area he knew very well and had made significant wealth in already). By focusing on his endgame of $500k from MHP investing, John focused on finding the right business partner.  John linked up with Joe, a young up-and-comer in their area who had seen great success in MHP investing already. The kid seemed to have a midas touch, and a hell of an eye for deals. And better yet, Joe handled all of the operations, while John collected interest on his money and kept his hands out of fixing toilets. 

By applying his unique deal criteria, and keeping his endgame in mind, John was able to reverse engineer an investment strategy that gave him the return AND the lifestyle that he desired. 

Use your unique deal criteria to guide your decisions

The beauty of mobile home investing is that it is a numbers game. Once you figure out exactly what you want MHP investing to help you accomplish you can literally reverse engineer that into a math equation to support those goals.

By creating your own unique math problem based off of YOUR core principles you’re able to create a deal criteria that is the builder of your dreams. Now, armed with this information, you can move forward confidently analyzing deals quickly and efficiently that serve your biggest and loftiest dreams. 

If you copy a cookie-cutter strategy, you’re in a race to the bottom, and your only ace-in-the-hole is to offer the highest price. It’s your only way to stand out. 

There will always be competition in this market, whether it is frothy or not, MHP investing will always attract savvy investors with cash to spend. The numbers of MHP investing are simply too attractive for investors to pass up. And this is why it is that much more critical to create your own unique deal criteria to serve the lifestyle YOU want. 

Create an investment strategy that supports your personal goals, and you will effectively carve out your own corner of the MHP market. 

MHP_IRL Ep. 7 "Before Your LOI"

Editor’s Note: Welcome to the companion article to Episode 7 of the MHP_IRL podcast! The purpose of this article is to expand your podcast listening experience with additional content. Companion articles will unpack larger concepts that we talk about during each episode that will give you practical and most importantly, actionable advice that you can apply to your MHP investing journey. 

Closing on properties is a rush. Let me tell you...emotions are swirling - happiness, wonder, excitement, a little bit of buyer's shock, but there’s one emotion that comes before the rest - stress. 

It’s all the little things that can and WILL go wrong, wrapped up in a ball, tied with a bow. 

Take that feeling and multiply it by ten - that’s what closing on a mobile home park feels like. Closing on an MHP takes longer, costs more, and is more complicated than traditional real estate. 

I’ve felt this and anyone I know who has closed on mobile home parks have felt like this. When closings get complicated I have to admit, Ian and I have thought about pulling out of deals. 

But, there was one thing that kept us going when closings got tough. I had an endgame in mind. 

“If you know your enemy and you know yourself, you need not fear the result of one hundred battles.”  Sun Su, The Art of War. 

Preparation is key. And, if you’re thinking about sending a letter of intent before addressing any of the following to-dos, here are some things to consider:

DEBT IS YOUR FRIEND

In mobile home park investing, you’ll rarely walk into a situation where you’ll want to sink all of your cash into a single deal. This means, debt is going to become a tool that you can leverage. 

If you don’t have a background in finance, that’s okay. But, I would encourage you to sit down, do some research, and you’ll see from a returns perspective that it won’t make sense to take a property down all cash (unless you’re planning to put debt on it later). 

It’s almost always going to work better for you if you diversify your funds - spreading your cash over multiple properties rather than one. 

And here’s the thing to remember; it pays to be well connected. If seller-carrying isn’t an option, make friends with the bank (easier said than done I know)

Let’s look at a couple of scenarios:

Buyer A is looking at a property worth $2 million. Buyer A can work with a loan broker who has better connections and will do the heavy lifting. 

Buyer B is interested in a property worth $1 million. While this isn’t a small chunk of change, Buyer B may have to work with local banks. The local banks aren’t going to do the heavy lifting, and in fact most of them will say no, BUT the one that says “yes,” will be an invaluable partner for Buyer B’s lifetime, even if they demand a recourse loan. 

For those that don’t know, a recourse loan is a loan that helps the lender recoup its investment if the lender isn’t isn’t able to pay. Recouping could include seizing collateral and assets and deposit accounts. (This is important and will come up later)

Let’s just say that Buyer B and I have similar life stories whereas Buyer A and I are furthest from friends. 

I remember working on my first deal. We called over 40 banks and every single one said no. I learned a lot, which made my second deal go much more smoothly (two banks said yes!) and since then that bank has helped us close deals quicker. 

To tell you the truth, the latest acquisition I worked on only went through because of our relationship with the bank. 

Buyer A’s approach demands the acceptance of the seller-carry ask, meaning sky high prices and terms that strongly work in the seller’s favor. This route is fine if you have the means, but I strongly recommend you get a lawyer to make the contract airtight. 

EQUITY CAN BE A GAMECHANGER

Here’s what you need to think about  when it comes to equity- strategy, risk, and returns. 

• Strategy: If your strategy is to grow big, you will want to have less of your cash tied up in limited non-liquid investments.

• Risk: The less properties, the more concentrated your risk. Furthermore, a big enough calamity at a single property could shut down your whole operation if you’re too invested in one area. 

• Returns: If your cash is tied up in a limited amount of properties, your returns will suffer, even if you hit a home run. 

Diversifying your cash AND bringing on passive investors such as family and friends may prove to be more lucrative for you and a better long-term strategy. 

Let me take you on a little walk…

You have a group of family and friends who want to invest in a mobile home park, but want to be 100 percent passive in handling the management. You may see stress whereas I see dollar signs. 

“Why dollars signs, Ryan?” you may ask. 

Here’s my answer: You deserve compensation for taking on more of the workload. 

Collecting payment can come in the form as an asset management fee, finder’s fee, promote structure, waterfall structure, etc. 

I want to make sure I am always bringing in the most qualified people for the job, and that applies to investors, as well. The good thing...finding an investor is easy. It’s getting them to actually write a check that is hard. 

When bringing on an investor, vet the individual or group very strictly and ask yourself:

• Do I want more control or less control?

• Does monthly reporting bother you?

• Do you value quick decision making?

• Is this investor willing to take on recourse debt?

• What will happen if things go south? 

Answering these questions will save you a headache and money in the long-run. I encourage everyone I meet to take this seriously because there are plenty of horror stories out there about how these situations go south quickly, and in some cases the law has gotten involved. 

Right now, I know a high net worth individual that is suing a super successful MHP operator. If this operator doesn’t have his i’s dotted and his t’s crossed, this high networth individual and his lawyer will crush him. 

Always consider your downside risk and ask yourself, “are you breaking the law?” Please, please consult with a lawyer before marketing to high net worth individuals. You don’t want to get mixed up in SEC litigation. 

The good news is that you can structure a deal many many ways - the general partner route and the limited partner avenue. 

• The general partner aggregates and manages the investment opportunity while sources the capital from the limited partners.  

• The limited partners do not participate in the management of the investment and therefore have limited liability. 

Here’s the deal: the bank needs a goat to go after if things go south. 

If you have recourse debt and a low net worth that doesn’t satisfy the collateral requirements, you may not be able to solo GP the opportunity since the LP faces limited liability. 

You need to come up with a list of people willing to accept the risk for you AND figure out how you can compensate them for going to battle if the occasion arises. 

If you’ve not thought about this, pause on all of your lead generation tactics. You’ve got some work to do. The stress of closing a property will become a lifestyle of stress because you weren’t prepared. 

COMPENSATION STRUCTURE IS IMPORTANT

No one is going to want to partner with you before ironing out their compensation structure. And if they do, run….because you’re in for a lifetime of migraines. 

The good news is that there are TONS of ways to structure compensation including Finder’s Fees, Promote Structure, Waterfall Structure, and Asset Management Fees. 

Finder’s Fee

A finder’s fee is cash or equity given up front for finding an investment opportunity. Finder’s fees can be structured in a lot of different ways. In my career, we have….

• Received a five percent finder’s fee on the total purchase price for finding an opportunity

• Gotten finder’s fees equal to the amount of capital we’ve put into the deal

• Cashed out finder’s fees

• Pushed finder’s fees directly into deal equity

If you’re sourcing the deal and putting in all this effort, you deserve to get paid. 

Promote Structure

A promote structure is like an if/then statement in programming. Your equity is boosted a percentage if a certain return threshold is met. 

For example, say you have 33 percent equity in a deal, but you have a promote structure that at time of sale if a 15 percent internal rate of return (IRR) is achieved, your 33 percent gets boosted to 50 percent. 

Waterfall Structure

Don’t go chasin’ waterfalls' is not in my vocabulary, especially when it comes to the waterfall structure. It's more complicated, but similar to a promote structure. Additionally, this type of structure would be more applicable to a fund or a bigger deal. It is worth your time to model one out, even if you don’t go this route. 

Asset Management Fees

Asset management fees can be structured in many ways, but typically a percentage of the gross revenue that’s agreeable to all parties involved is taken. 

There are an infinite number of ways to structure a deal so make sure you know what you are comfortable with. 

DON’T MESS WITH LEGAL

Winging anything to do with legal matters is a terrible, and I mean TERRIBLE, strategy. You do not want to be in the heat of the moment thinking about operating agreements, having closing attorney troubles, or rushing to find a title company. 

Operating Agreements

Operating agreements are like seatbelts. You don’t put on a seatbelt because you plan to crash your car. You put on a seatbelt because of the other drivers on the road. Rarely do you ever need it, but are incredibly thankful that you have it. 

With a solid operating agreement in place, you can avoid some minor and mostly major inconveniences. 

Umbrella, LLCs 

Depending on how you want to structure your business, an umbrella, LLC might be for you. Instead of saying, “Ryan owns 50 percent of AG X”, we say, “Ryan owns 50 percent of Archimedes Group, which owns 50 percent of AG X.” 

This is all up to you and how you want to run your business, and it really comes down to your end game. My recommendation? Speak to an attorney or CPA to determine what the best fit for you is. 

Closing Attorneys

Like anything in life, closing attorneys are not all equal. Just because attorney X comes at a higher price doesn’t mean they’re the best or even looking out for you. 

As I stressed with banks, connections will go a long way here. Contrary to popular belief (or denial), sometimes it is all about “who you know.” 

Title Company

If you’re a baby investor like I was, connections are few and few between. If this is you, you just have to grind through the list of local title companies until you get a bite. 

THERE IS STUFF EVERYONE FORGETS 

Closing on a property is like skydiving. You have a lot of things you need to remember, but when you jump out of the plane, your mind goes blank and instead of looking around at the sights, you blink...and you’ve already landed. 

Between the time you jumped and landed (metaphorically speaking), you’ve forgotten to get an accounting system. Sure, Google Sheets is an amazing tool, but when you start adding complexities into the system, my recommendation is to find a proper accounting software. 

And, while you were jumping, you probably also forgot to wave at the go pro strapped to your head. Just like how you’ve forgotten your due diligence lists. 

In this line of business, you need to have checklists - not just because you need it, but because others like banks, the sellers, and anyone else will need it. The more seasoned you are, the more comfortable you are with making your own checklists. If you’re just beginning, don’t be afraid to check out as many free lists as you can. Find what works for you. 

Closing a property isn’t just about closing. There is a process and an end game that all needs to work with what your goals are. If nothing, remember this -  Fear is overcome with courage. Courage is overcome with confidence. And, confidence is created with preparation. 

If you aren’t prepared, how will you win the war? 

MHP_IRL Ep. 9 "What You See From The Front Lines-Part 2"

Editor’s Note: Welcome to the companion article to Episode 9 of the MHP_IRL podcast! The purpose of this article is to expand your podcast listening experience with additional content. Companion articles will unpack larger concepts that we talk about during each episode that will give you practical and most importantly, actionable advice that you can apply to your MHP investing journey. 

Mobile home park investing is like going through high school. As a freshman, you know nothing. You roll into sophomore year slightly better. By the time you get into your senior year, you're a well-oiled machine. 

As everyone knows...during your time in high school, you’re going to trip up and make mistakes. But you know that that’s okay because you won’t make the same mistake twice. 

Going through high school feels the same as going from one mobile home park to two and so on. The more you invest, the more you make mistakes and learn. 

Unfortunately, a lot of investors don’t make it through the first step - they pass deals, with the excuse that, “I don’t have the connections” or “I don’t have the experience.” 

How do I know this? Because I did the same thing. Those excuses were my excuses. 

The lightbulb came on for me one day when I took down a deal and doubled that property’s value within 90 days. I started asking myself “what else have I missed out on?” just because I was too afraid to jump in and get the experience that, truly, only comes with time. 

When I liken the MHP investing experience to high school, I also like to talk about the process of going from unconscious incompetence to conscious competence. 

In ninth grade, we are unconsciously incompetent. It’s our first year in a possibly new and larger school with people who have been playing the game for at least two to three years. We don’t know what we’re doing, kind of just showing up and seeing what happens. 

In tenth grade, we are consciously incompetent. It’s our second year and we’ve learned the rules. We’ve got a place on the board at least, but it’s on the outer edge and we’re still getting hit. 

In eleventh grade, we are unconsciously competent. By the third year, we’ve learned the unspoken rules of the school. We’ve advanced on the board, and life is pretty sweet. 

In twelfth grade, we are consciously competent. We know the lay of the land, who our friends are, what teachers we like, and the ones we don’t. By all means, school is second nature to us. 

To be honest, I felt exactly the same way when Ryan and I first bought La Costa. I had never done property management before. And, even though it was my third mobile home park, it felt like my first. 

I’ll pause here to say if you haven’t read the first article in this two-part series, stop now, and go read it. There are six valuable lessons there. 

Anyway, back to conscious competence….

Let’s just say, when Ryan and I got to La Costa, we had idealistic hopes and dreams. Those were quickly stamped out at 8 AM on our very first day. 

Between maintenance staff who only spoke Spanish, it being rent collection week, and encountering individuals who made it their job to get out of paying rent, I can say (now) without a doubt we were in the unconscious incompetence phase. 

We had gaps in our knowledge that we didn’t even know about. 

The good news is that by month six in my mobile home park experience, I was at conscious competence. La Costa was a well-oiled machine. Ryan and I had...

• Met a lot of connections and influencers in the area  

• Became conversational in Spanish

• Built a solid team of fix-it people

• Filled all vacancies

• Monetized vacant pads with about 20 RVs

• Corralled collections

• Fixed problem areas like roads, lights, trees, and more  

But, the one thing that we learned that was more valuable than anything else was learning how to handle people. 

If you’ve followed me for a while, you know that I pride myself on being a psychology guy. I thought I knew how to handle people, especially in a mobile home park setting. 

I was wrong. But, in making the mistakes that I did, I learned three incredible lessons. 

1. Actions speak louder than words. 

As landlords, we don’t want to evict people. We’re not assholes. However, there is going to come a time where tenants not paying will cost you money. This is where you don’t have a choice. You must evict or non-renew your tenant. In my experience, you do this with one tenant, and the others will fall in line. 

1. You can negotiate with tenants to leave. 

Sometimes, you’ll have tenants who get through the eviction by paying half of their rent. You can’t evict them. This is where negotiations come in - you can offer something for your tenant to leave. 

We have paid people to leave. This includes canceling their payment, giving back their security deposit, and more. To date, we’ve had more people leave peacefully than trudging through eviction court. 

1. You can not be overly friendly or overly mean. 

I know that this sounds like a very fine line to walk, and in many cases it is. However, if you become overly friendly with your tenants, you will not be taken seriously. In a lot of cases, tenants will think they can walk all over you. 

On the flip side, if you are overly mean, there will be a breakdown of conversation. You will not get anything out of talking to them. 

My advice? Humor always wins. Humor can break the tension with your tenant. Egos can be soothed over. 

So, how do you get through to people without being overly friendly or overly mean? You have to be direct, firm, and above all….repetitive. 

• Have the courage to be confrontational when necessary.

• Have the character to not argue back with people. 

• Sound like a broken record, and use the legal leverage you have as a landlord. 

In learning how to meet the gaps in our collective knowledge by living at La Costa, Ryan and I were able to double the value of our next property in under 90 days. 

That’s when I learned that we, as people, believe we use the power of free will...but in actuality, we use the power of freedom of will not. And that my friends, is conscious competence. 

When thinking about the freedom of will not--think about this…

Our bodies do so much via subconscious processes. We as decision-makers are inhibitors, not initiators. When you are proficient, you have created the right habit and your body acts on it without having to use brainpower. 

Here is an example: Have you ever gotten home and then freaked out because you don’t even remember driving? You don’t have to remember because you instinctively know how to drive a car if you’ve been doing it long enough. 

When we invested in a property right after La Costa, I remember not sleeping well that night because I wasn’t sure if we made the right choice. 

At the end of the first week, I knew it was going to be okay. And, I was right. At the end of the first three months, Ryan and I had the property stable and at full capacity.

The skills I cultivated by throwing myself headfirst into La Costa….it brought about the formation of the right habits. Those habits freed up processing capacities, which allowed me to make more complicated decisions. 

Here’s the thing….other investors passed on this property, even with the ability to pay less than what I did. 

Why? Because they didn’t see the potential. 

If you remember my podcast interview with Sam Kline you’ll remember the story of the property Sam showed one hundred times before one investor saw the potential, executed a plan, and exceeded expectations. 

Ryan and I saw the potential of this property. We were willing to roll up our sleeves and do the work. 

Here’s the takeaway: find the opportunity where you can add value that others can not. 

For us, it was sacrificing our lifestyles to live at a property and spend mega hours on site. Then, we were able to apply those skills from the front lines to other properties. We wouldn’t have been able to do this if we hadn’t been out on the front lines. 

What if you don’t have time to drop everything to go to the front lines? That’s okay, but realize you will be leaving money on the table. You will pay for the knowledge gap. 

Can you learn this business remotely? Absolutely yes. As I mentioned, we already owned two other properties for nine months. The thing is, even with two properties under our belt, we still really had no idea what we were doing. And it wasn’t until we started with La Costa that we did start learning things. You can’t beat dedicating yourself 24 hours to the cause. 

If you take nothing else away from this article, please remember this: Mastering a skill comes with frequent oversight and failures. But, in the long run, hard work and dedication will pay off. 

MHP_IRL Ep. 10 "Lead Generation Secrets"

Editor’s Note: Welcome to the companion article to Episode 10 of the MHP_IRL podcast! The purpose of this article is to expand your podcast listening experience with additional content. Companion articles will unpack larger concepts that we talk about during each episode that will give you practical and most importantly, actionable advice that you can apply to your MHP investing journey. 

“When the next recession hits, I’m going to purchase a mobile home park…” 

I’ve heard this countless (and I mean countless) times from friends, family, and strangers. Let me ask you this…if everyone is waiting for the next recession, do you really think MHP prices are going to go down? Absolutely not. 

Take it from me - you have to put in the work and jump in when the time is right. Believe me, jumping in at a recession is not the right time. 

Putting in the work and finding an MHP to invest in when the time is right starts with taking care of your lead database. If you’re working through your database, you can place or send well-timed cold calls. 

No one really likes cold calling. You don’t know the person on the other end. They may not pick up. Or, if they do, you might get nasty comments. It’s really a crapshoot. 

But, cold calling has to be done, and it can not be outsourced. 

Outsourcing is not the way to go. 

In my opinion, outsourcing cold calls is a waste of money.  The whole concept of cold calling is built on rapport building and answering questions that sellers have. Do you really think someone who doesn’t know anything about mobile home parks is going to be able to answer those types of questions and build a relationship with the seller? No way. 

Sellers get bombarded with calls and adding another insincere call to the pile isn’t going to make you any friends. 

You must always remember this...you’re aren’t just competing with other potential buyers. You are competing with brokers, who spend hours cold calling. In most cases, brokers are the best-case scenario for sellers. Why? Because sellers want to sell their property at the highest price possible and a broker wants a large commission. And you guessed it….a large commission can only be made on a high selling price. Because of this, and many other factors, be ready to get rejected a lot. 

How do you minimize your chances of being rejected? You must find a way to interact with the owner yourself and on multiple occasions. Otherwise, you’re going to get drowned out in the noise. 

My advice….think about your endgame and laser-focus on a small portion of your database. This advice is particularly good for those who aren’t working full-time on their MHP business. 

Here’s an example….

I have a database of 1400 entries. Let’s assume that on average making the call takes one minute (to call, ring, and leave a message). If I only did that, it would take 24 hours from start to finish. That time doesn’t include if I got someone on the phone, which could take up to 20 minutes. 

If I only focused on 20 percent of my database, my contact rate would increase to calling my contact once every other month or so instead of once or twice per year. 

Because I know that I can’t spend more than an hour at a time cold calling, I put in three to seven hours a week calling a well-planned and thought-out list, which is what I would call laser-focus. 

In the end, laser focus will make you more efficient with your time and efforts. 

When cold calling, you need to be different. 

Let’s face it, cold calling would be much easier if both parties kept to a script. Unfortunately, that’s not how the world works and people are brutally self-interested. 

Let’s take my 10-year-old Honda as an example. My 10-year-old Honda has a little over 100,000 miles, it’s paid in full, and I am not looking to sell. Let’s say that I receive four calls….

Buyer one calls me out of the blue and asks if my Honda is for sale. I would tell them no, it isn’t. They ask me to consider selling to them when the time is right. I would say “sure” and hang up the phone and immediately forget about them. 

Buyer two mails me a postcard. Without even looking at the postcard, I would throw it away. 

Buyer three calls me and tells me that they’re a family business, looking to buy a Honda in my area. I would say that sounds nice, but no thanks. 

Lastly, Buyer four calls me. Buyer four tells me that they’re looking for my specific make, model, year, and color in the area that I live in and asks me to sell to them for a compelling cause. This would impress me and creep me out a bit. But, I would consider speaking with them. However, because this ask is so specific and I’m not looking to sell my car right now, I wouldn’t even sell to them at a reasonable price. 

Now, with that being said….if buyer four had called me when I was looking to sell, I would have and at a reasonable price. 

My friends, timing is everything. Eventually, a cold call or mailed piece will influence my decision to sell my Honda. 

With no rapport building and limited marketing touches, sellers will forget about you. In a world where everyone has a database and has the same message. How are you different? 

MHP investing doesn’t begin and end with cold calling. You have to continue to grind. 

Mobile home park investing has been billed as this “easy, passive income, four-day workweek” concept. In reality, it’s more like running a marathon. You always have to be training. (A lot of people don’t realize this.) 

I speak with a lot of newbies who want to get into MHP investing. Typically, I like to categorize newbies into two buckets - passive income seekers and true entrepreneurs. 

Passive income seekers want to quit their full-time job, get rich quick, and have four-hour work weeks. They don’t want to be involved in the process.

True entrepreneurs know that they’re going to have to grind, sacrifice time and money, and essentially work a part-time, zero-salary job. I would put Ian and myself into this category. 

Ian and I started grinding in 2015. We didn’t close on our first deal until 2016. We were two young, hungry, wannabe entrepreneurs with big dreams, way too much time, and a skillset of selling. After a year or so, we got lucky. We hit the timing right. But in that year, we sacrificed time, money, and effort. At that time, our minds tried to convince us that we wanted to quit. But, we didn’t. 

Why? Because we got a taste of what I like to call the “cartwheel.” 

Mobile home park investing can make you feel one of two ways - like you’re flatlining or doing a cartwheel. 

When I talk to passive income seekers who are in it to “get rich quick,” they tell me they want to have a passive income stream so they can quit their job and pursue their dreams. When I ask what their dreams are, they are incredibly passionate. But, when I ask about mobile home park investing, it sounds as though they are a heart monitor flatlining. Seriously, you can see the light go out in their eyes. 

When I talk to true entrepreneurs though, it sounds as though they are actually doing cartwheels. You can hear the adrenaline rush, the happiness, and the elation in their voices. I love talking to these people.

A few weeks ago, a listener called me ecstatic, about how he just closed his first deal. He told me the first rent checks just cleared the bank and he had never been excited like this in a professional sense. I felt like he called me in the middle of him doing a cartwheel. 

Now, I’m not saying both groups of people can’t invest in mobile home parks. What I am saying is that this is still a job. It’s not easy and sacrifices will be made. It will only be worth it if you feel like you’re doing cartwheels. 

I’ll leave you with this. 

In a world full of wannabe MHP investors, are you a flatline or a cartwheel? 

MHP_IRL Ep. 12 "Andrew Keel"

Editor’s Note: Welcome to the companion article to Episode 12 of the MHP_IRL podcast! The purpose of this article is to expand your podcast listening experience with additional content. Companion articles will unpack larger concepts that we talk about during each episode that will give you practical and most importantly, actionable advice that you can apply to your MHP investing journey. 

With mobile home park investing, you don’t just get in there, turn the key, and the cash starts flowing out. 

Even though this is what most people think happens, it’s so far from the truth that it’s not difficult to understand why first-time investors are disappointed. Some even walk away from MHP investing altogether. 

Let me tell you, mobile home park investing, unless done right, can totally knock an investor out of the game...before they even start. 

Back in 2018, I spoke with Andrew Keel, park owner, operator, and downright hustler. If I know one person who did MHP investing correctly, it’s Andrew. Now, I’m not saying it was all rainbows and sunshine. Certainly, Andrew and his family, as you’ll read, made sacrifices, but in the long run, were rewarded. 

Even though it’s been a couple of years, the four topics Andrew and I talked about are still things I believe in today, even in 2021. 

#1. You need spousal buy-in. 

If you’ve listened to my podcasts or read any of my blogs, you know that I believe spousal buy-in is incredibly important. 

You can be as passionate about mobile home parks all you want, but if your partner isn’t...will you really be able to jump all in? 

When it came to Andrew and his wife, Katie, and including her in his plan for investing, he said it didn’t take much convincing. “She loves spontaneity, the ability to pick up and go.” 

Because of the nature of mobile home park investing, if you’re married or are planning to be, you need to get your spouse on board. In my discussion with Andrew, he made it clear that MHP investing takes a lot of hustle, grit, and there are daily struggles that need to be taken care of. 

Because his wife was his number one supporter, it was extremely important for her to be by his side.

For me, I am right there with him. If you’ve read my wife’s article, Spousal Buy-In: Battle of the Sexes, you’ll know that MHP investing was the straw that broke the camel's back for us. In fact, she specifically said that in the early years, our inability to communicate and listen to each other fully came out when I ran home to tell her about my new plan. For us, we learned to work on our communication and listening skills. Years later, even in 2021, we continue to work at it. 

For Andrew and his wife, they’ve learned to communicate and listen. They take nightly walks when he’s not traveling. During our discussion, Andrew said, “On the walk, I vent. I talk about everything that happened that day, long-term goals - she hears everything. Sometimes, she plays therapist.” 

#2. Sacrifice in the short-term to get long-term rewards. 

As an MHP investor, you won’t be a stranger to sacrifice. Whether that is working a part-time job until you can make it full-time, moving to the property, or selling your own assets to come up with cash, these are decisions you have to make. 

I, like Andrew, firmly believe that short-term sacrifice can turn into long-term gain. In one way or the other, we have both experienced all of the sacrifices I mentioned above. 

Parting ways with your assets. 

Andrew, being a hot commodity on the interview circuit in 2018, told me something he never told anyone else. 

“On my first park, I originally wanted to put down a $1,000 deposit. The seller wanted me to put down $10,000,” Andrew recounted. “I sold my truck to put down that deposit. But, I didn't have the money to buy this park and until I had met some higher players in the mobile home park space, I didn’t know I could buy parks without my own money.” 

“On the first park I bought, we bought it for $1.34 million. Sixteen months later, we just got the appraisal back. The appraisal came back at $2.4 million. We have Fannie Mae, non-recourse loans. It’s the best debt. We’re just stoked. It pays off,” Andrew said.  

Had Andrew not sacrificed his truck in the short term, he wouldn’t have learned valuable long-term lessons. 

1. Sacrifice can be the line between getting the MHP or not. 

2. Investors can be helpful.  

“You meet people when you put yourself in the right places. Whether it’s conventions like SECO or MHI, or a boot camp, you meet people when you get inside of these events and I think that’s been incremental to my success in this space,” Andrew stated firmly. 

Working odd jobs because you can’t go full-time. 

It’s no secret that I wasn’t able to do MHPs full-time when I first started out. In fact, I worked multiple odd jobs from working for a Carnival cruise line, a car dealership, to Wells Fargo. I couldn’t tell you how frustrated I was. At the time, it was frustrating because I knew what my dreams were. But in retrospect, I am incredibly happy that I had those experiences. I built skills that have made me successful today. 

Andrew had the same experiences. From selling websites to realtors to flipping houses, these, he said, helped him tremendously. But, there was one thing, above all else, that helped him the most. 

“There was one thing that I did before I was a full-time MHP operator. I was a Lonnie Dealer. I read the book, Deals on Wheels by Lonnie Scruggs. I feel like this is the best thing you can do to educate and prepare yourself for what you’re getting into. Go and get the book and learn how to do deals on wheels.” Andrew recommended, “Buy a mobile home in a park, do some minor rehabbing and try to create and sell it on a contract. You’re going to learn quickly if you can market, sell, and talk to less affluent operators. It’s a good intro into dealing with the clientele that we deal with.”

Doing this helped Andrew build his resume and got him to the next step and then to the next step again. 

“I am a religious person, and I think you have to believe in the process. I am not a patient person, but I feel like God puts you through struggles for certain reasons. I’ve been through deals that I wanted to work out, but didn’t. I needed to go through that struggle to learn what things cost and go through that due diligence,” Andrew said. 

Andrew recounted a story to back up his claims. “I had a friend in Iowa and we were working on a deal. It was intense. We already put money down. We were going through the process. Then, we went to renegotiate with the seller because of what we found. They didn’t even know some of the things that were wrong with their park. The seller said no, he was not coming off of his price. Right then and there the deal was dead. We couldn't get a deduction and we couldn’t meet the rate of return that we were promising our investors. We had to cancel. Someone said you wasted all of that time and money. I said, no, the money and time was worth way more than any tuition I could have paid at college.” 

I have to say this, canceling a deal is one of the worst feelings ever when it comes to MHP investing. But, it is necessary. 

Here’s what I believe...there are three types of buckets that they fit in - the givers, takers, and matchers.  

Matchers believe that when they give you something, you should give them something of equal value in return. Overwhelmingly people are matchers. My wife is a big-time matcher. When she gives you something, she wants something of equal value. 

Takers won’t give you anything, they’ll just take what they want. 

Givers will give, give, give - all without wanting anything in return. I believe that Andrew, like me, is a giver. To put yourself out there, to make sacrifices, and then to walk away with nothing in the short term, hurts. There is no getting around that. 

I remember when I spent a couple of thousand dollars in due diligence and then backed out, my wife was like “why do you do this to yourself.” And I said, “honey you're a matcher. I’m a giver. I’m going to throw seeds out there and as long as I have a good garden, I don’t need to get every seed.” 

#3. When looking for investors, don’t look to fund the deal. Look for interest. 

One thing that I noticed quickly about Andrew is that he has the ability to find quality investors who are sold on him. Not just the investment, but they are sold on him as a person. 

I said this to Andrew, and he advised, “You don’t want to be the weird guy going around the room, putting people into profiles to see how much money they have. And then trying to only approach the people who have money.”

For Andrew, it’s more about finding the people who are interested, not the people with the most money. “Regardless of where I am, I can tell when someone is interested in MHPs. When I talk about MHPs, I am very passionate about them. And when people ask questions, I try to answer them. Through doing that, I feel like they can tell I am passionate.”

Andrew also recommends building rapport with people. “Before we even talk about MHPs, we’re talking about them, about their families, about their weekend plans.” 

Then, Andrew says, when they’re ready to talk or are interested in learning more, he lets the players come to him. This way of bringing in investors can have long-term benefits.  

“In the end, when you get your investors really good rates of return, they don’t want the money back, they want to do more deals. So once you do execute, there is an abundance of money there for you.” 

#4. Always be thinking about the next step. 

For anyone who has hit critical mass like Andrew or myself, we don’t just give up. Critical mass is when we’ve made it to working full-time. The feeling is overwhelming, I have to say. It’s like you’ve achieved all of your dreams and more. 

But truthfully, even if you’ve hit critical mass, it’s not over. You must always be thinking about what the next step is. 

“It's a great feeling. And like you said, it’s not over,” Andrew said, “I started out doing Lonnie Deals, and then I asked what’s next. What do I need to learn to get to that next level?” 

With the next steps, comes risk. There are going to be things out of your control that you’re going to have to be okay with. 

Andrew said, “Analysis paralysis is real. People know enough but are too nervous to pull the trigger and execute. That is a valid concern that many people have  - am I really ready?” 

To those people, he says, “You’ll know when you’re ready. I recommend everyone go listen to as many MHP podcasts as they can. Dive in. After you get through the first 20 episodes of each of them, call me. If you're not willing to put in that type of time and be passionate about it, you’re not ready.”

Are you ready to take the next step? 

MHP_IRL Ep. 13 "Owning 5,000 Lots, Interview with Mike Conlon"

Editor’s Note: Welcome to the companion article to Episode 13 of the MHP_IRL podcast! The purpose of this article is to expand your podcast listening experience with additional content. Companion articles will unpack larger concepts that we talk about during each episode that will give you practical and most importantly, actionable advice that you can apply to your MHP investing journey. 

When it comes to mobile home park investing, there are two types of people. 

Group A is slow and steady. They build their portfolios organically and always strive to stay in control. 

Group B is first and foremost, money raisers. They bring in money quickly and snap up properties just as quickly.

Which one is better? I always ask myself. Is the old adage true? Does slow and steady win the race? Or do you need to be fast and overconfident? 

A good friend of mine, Mike Conlon, sat down with me in 2018 to discuss his experience. For those that don’t know, Mike has achieved what many MHP investors want to achieve - owning 5,000 lots. He got there by growing organically, firmly placing him within group A. 

Growing organically from zero to 5,000 lots comes with a lot of lessons. 

Just because you’ve reached 5,000 lots doesn’t mean you’re done working. 

I’ve talked to many operators who dream of retiring once they’ve hit 5,000 lots. While I'm not saying life wouldn’t get easier, the work is never done. 

Due to the easy-going, passive air that MHP investing has been branded with, many get into the industry and forget that this is a job like anything else. Decisions still have to be made. Rent needs to be collected. 

As a person who has reached 5,000 lots, take it from Mike.  “It’s been a great run for us since 2011. We sold all five parks with the anticipation that all of the distressed stuff would hit the market in 2012. It took a while but recently we purchased about 7,500 lots and we’ve sold about 2,300. We sold our way up, mostly distressed stuff, worked it hard, built it up, and then sold it to buy bigger, higher-quality stuff. We’ve bought over a thousand spaces. There are still some deals out there, but it’s more difficult than they were.”

Mike credits his success to the team he has built. 

“For me, it’s been really good. A lot of people love my lifestyle. The cash flow is fantastic. I think the biggest thing I did was put the right people in the right place. I put Chris Barry as my chief operations guy. Just hired another regional guy for Atlanta who’s been a friend of mine for 20 years. We have great financial people. We have great managers,” Mike told me. 

And the story didn’t stop there, Mike continued on discussing how his team was able to be successful, “When I first started, it was just Chris and me. We were in the apartment business back then. I was behind the desk. I was driven by acquisitions. I am a big picture guy. Most of the people around me are detail guys. It’s a really good place to be at 5,000 lots. I don’t have to do anything tomorrow. I don’t have to show up for a month and everything is going to stay the same. It takes a long time to get there, but it is doable.” 

You might be wondering, “how do I know I’ve made it?” 

Owning and operating a mobile home park is a full-time job, and is never easy. If you’re just starting out, your first deal will be the toughest and the first couple of years will be the hardest. That’s when you’ll sweat the most, which is okay. 

This is the point in your career where you figure out what works and what doesn’t. What do you like about this industry and what don’t you like? By the time you’ve got one or two parks and a couple of years under your belt, life tends to ease up. 

For Mike, there were a couple of indicators of when he knew he had made it, “When you can hire someone like Chris Barry, it takes the pressure off. When you feel like you don’t need to be on the property every day, when you have someone who is handling the work, and when you have someone else do your accounting.” 

For anyone who is just starting out, that might seem like a tall order. It is. 

Remember that mobile home parks, for all their passive messaging, are tough work. A lot of work and planning is required for long-term satisfaction. 

That’s why I encourage all my readers to think about how they want to grow their business - are you group A or group B? 

In Mike’s case, I think he would be lumped under group A - slow and steady. Not only did Mike start out in a completely different industry, but even as an operator, he has maintained majority control in all of his parks. 

Mike first started out in wealth management. Then, after he had moved into the apartment space, he found mobile home parks. Throughout his experience, Mike has applied one rule - get your ducks in a row before going all in. 

“The reason I did that is because, being from the midwest, you tend to be more conservative. In the apartment business, we bought one eight-family building. That was all we had for about six months and we figured out “do we like this business?” Once we determined we did like it, I felt like we could grow it. We sold the financial planning business,” Mike stated. “On the park side, we bought one 80 lot park and said “let’s try this for a year. If we really like it, we’ll start to buy more.” That worked out well for us. We got to experience it and say “here’s what we don’t like.” Before we got 5,000 lots, we were able to say “here’s what works and what doesn’t.” It was like a test case. That made our lives a lot easier because we weren’t going to make the same mistake on 5,000 lots.”

If there is one thing that you should take away from this, it’s that experience matters. 

Mike didn’t waltz into the MHP industry, sit down behind his desk, and get to where he is now. In fact, quite the opposite. Now, not only does Mike still have a leg in the game, but he is also a CEO, which has helped him grow the skills he already had. 

Mike had this to say about moving into a CEO role, “My skills were already good for this kind of thing. I am more of a big picture guy. I am okay with the details but I am much better at thinking about “where do we want to be two years from now or five years from now.” I read a lot. I try to be aware of what’s going on so that I can anticipate. The sign of an entrepreneur is that you try to anticipate what the next big obstacle is that you have to get around. But really, when you look at it, you have to be able to make decisions. You are always going to make better decisions having been in the park.”

But, he went further to say that being a CEO first will not prepare you the same as if you jumped into your park, “I’ve had a lot of conversations about clients and residents that come in and all of the crazy stuff that happens. You don’t really appreciate it until you’re sitting behind that desk. If you start out as a CEO, you have no relation to what’s going on. It’s a different business.” 

You may be asking yourself, “how do you get to where Mike is?” 

I have one word for you - endgame. If you aren’t sure what you want your end result to be, you won’t know what steps you need to take to get there. 

Do you want to only work 25 hours a week? Figure out how much it’s going to take to get you there. Do you only want to make $100,000 a year? Figure out how many parks you need to know to get you there? 

For me, it’s all about the endgame. If you know that, then you can reverse engineer how to get there. 

Mike’s story is similar, “Initially, we bought a lot of distressed project portfolios. We bought a Bank of America park portfolio that had about six parks in it. We still have a couple of them today. We sold some of them and reinvested the money. We bought a Tixuz portfolio - it was their only MHP loan. We got some of those.”

Mike and Chris did that for a while, and then something changed. “ Someone said to me, ‘Now is the time to get rid of your C MHPs and buy more A and B stuff in prime metro areas.’ That’s what we’ve spent the last three years doing. Cleaning everything under 100 spaces out and buying bigger stuff. We have seven parks over 200 spaces now. It’s very nice. Those parks are very profitable. The end game for me is...the more quality you have, the more big buyers want your stuff.”

But, what if you want to buy hard and fast because you're a part of group B?

Snapping up deals quickly is a different business, and there are usually investors along for the ride. While this isn’t a bad strategy, it is a risky one. 

“I think with any business if you grow for growth’s sake, you get into trouble when the market turns against you or something in the industry changes. I think you need to be very careful. I get that when you’re a money raiser, you get paid fees when you place parks. The problem with raising a bunch of money, it puts a gun to your head and says “these investors expect ROI on their money. So you have to go buy something. It may not be your best deal, but you have to buy it.” And you’re saying, “if I want to get paid, I need to buy something.” It is a conflict of interest that you’re buying to just buy.”

Mike suggests always trying to grow organically first, and if you have to raise money, keep within a small group. 

“I was always leery of going to outside people. I have about 15 people I’ll go to if I need the extra money. I would strongly suggest you have money to work with, but if you can grow organically it’s a lot easier because you can keep control. I am the majority owner in every single deal I have. I have the final say. If I need to get something done, I can get it done in five seconds. You have guys who are money raisers. It’s a little bit of a control issue. You have to go back to the guy with the money to get decisions made. I just never wanted to set myself up like that,” said Mike. 

MHP_IRL Ep. 14 "Starting with Nothing"

Editor’s Note: Welcome to the companion article to Episode 14 of the MHP_IRL podcast! The purpose of this article is to expand your podcast listening experience with additional content. Companion articles will unpack larger concepts that we talk about during each episode that will give you practical and most importantly, actionable advice that you can apply to your MHP investing journey. 

You never know where someone is going to come from in the MHP investing world...

One investor could have come into the game with their own money. Another could have come having already been working in the industry elsewhere. And another could have come from “nothing.” 

In 2015, when Ian and I started Archimedes Group, I was broke, inexperienced, and stuck in a career without a way out. I had more student loan debt than capital to invest in deals. 

The most important thing that I brought to the table in 2015 was the knowledge of who I was and what I wanted. But, this did not come to me suddenly. In fact, it took working several different types of jobs that helped me hone my skills, reading a ton of books that opened my mind, and networking with a lot of people that brought in my perspective. 

Doing all of this made lifting off so much easier. 

You may not realize how much you are growing because success is not linear. There are a lot of demoralizing plateaus you must burst through. Although you may feel stuck in neutral, going nowhere fast, you may also be developing crucial skills that help you big time when you buy your first property. 

Even if you aren’t starting from zero, achieving your goal is going to take time, sacrifice, and jumping over a lot of knowledge and skill gaps. 

Skill gaps are a hell of a hurdle to get over since they require you to expose weaknesses in your own self-esteem. 

I’ve talked about this before, but I was pleasantly surprised to find that the skills I learned in my “other” life (the one before MHP investing) actually proved to be invaluable for my MHP investing journey. 

What kind of skills am I talking about? 

• Marketing

• Sales

• Negotiation

• Basic accounting

• Financial analysis

• Ability to collect back due rent

• Emotional intelligence

• Employee, contractor, and property management

• Spanish speaking

• Tenant screenings

• Efficient time allocation

For each of those skills you do not have, expect to pay for that gap in one way or another. This could be in the form of hiring someone, the opportunity cost of missed revenue, or even spending the time to learn the skill yourself. 

And remember, even if you can hire an occupied lot or property manager, you can not expect him or her to be proficient at all of those skills. 

Please do not fall for the “brush-off  trap.” The brush-off trap is when you tell yourself that you don’t need one of these skills. 

How do I know this? Well because when Ian and I first started...even with four years of selling cars under my belt, Ian ran circles around me in sales, which he had no experience in. The reason is, he figured out the nuances before I did. I was too focused on executing the same techniques that made me successful at selling cars to see that they didn’t apply to MHPs. 

So, without further ado, I’d love to share my thoughts on the following skills I believe you need for MHP investing. 

As a note, these are in no particular order because they are all equally important. 

Skill 1: Marketing

According to the American Marketing Association, marketing is the activities, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for consumers. 

Marketing makes the world go ‘round, it seems like. And, it is never one thing because there are multiple different types of marketing and audiences, and no two combinations of marketing and audience will perform the same. 

In 2019, Ian and I bought a property only 20 minutes north of another one of our properties where we had a waiting list. Even though this second property was only 20 minutes away, we have to completely change our messaging. 

Through your own research, you will need to figure out the medium and the message. Some markets are full of wannabe homeowners. Some are full of renter minded folks that want flexibility. Some markets love Craigslist while others love Facebook. Sometimes a hybrid strategy will work for you. 

Be prepared to adjust both on the fly. Different markets respond to different things. Sometimes you’ll have to gut your entire strategy and start from scratch. 

Skill 2: Sales

Marketing and sales can go hand in hand. Where marketing lures potential tenants in, sales digs deeper to latch on. What do I mean by this? 

Not everyone who shows up will fall in love with your property and sign a lease without issue. Prospective tenants are going to ask some freakishly good questions. 

• How do I know you are committed to keeping this property safe and clean? 

• Why would I pick your mobile home park over a similar local one? 

I’ve said it once, but I’ll say it again - sales isn’t about a sexy pitch. It’s about uncovering objectives and the deeper concerns of your prospective tenant and then addressing those psychological impediments. 

Skill 3: Tenant Screenings 

What kind of tenant do you want to rent to? This is a question you want to figure out first. Why? Because tenants can make your life a living hell. 

Not every prospective tenant that walks into your office will have a 700+ credit score with a great job, clean criminal history, and no vicious pets. In fact, that is the minority. 

As MHP operators, we are dealing with individuals who are looking for affordable housing. Naturally, you’re going to get prospective tenants that you’re going to be on the fence about. 

And, you will have to make a decision all while being in accordance with fair housing laws. 

Take it from me...answering this question, and doing proper screenings will have you a headache. 

To date, we have only evicted a tiny portion of people we screened ourselves. It was significantly less than five percent. But truth be told, Ian and I had a mentor who walked us through what to look for so we could properly take a risk on a certain tenant. 

Skill 4: Negotiation

Here’s something that may be surprising. I negotiate almost every day, but it’s not what you’d guess. 

A lot of individuals who want to get into MHPs dream of fast-paced, adrenaline-filled days. And while yes, we negotiate deals with mobile home park sellers, we only close those a couple of times per year. 

However, on the daily, we interact with hundreds of tenants, contractors, county employers, potential investors, our employees, and so on. You will negotiate everything, especially with tenants. 

With tenants, you’ll negotiate everything from fines to peaceful exits to new tenants wanting deals on homes. The truth is, different negotiations require different strategies and techniques. 

While a bulldog negotiator might come in handy when talking down a contractor you’ll never see again, having empathy while being firm works better when dealing with a peaceful exit of a non-paying tenant that you’ll also never want to admit back into your property. 

While there are some things you can outsource, negotiating is not one of these things. You can leave so much money on the table if you don’t do it right. 

Skill 5: Basic Accounting

If you can’t trust your books, how will you know if you’re bringing in revenue? 

Now, if you can hire a CPA and bookkeeper upfront, this won’t be a problem. But, if you’re like us and starting out fresh, you probably won’t be able to afford a bookkeeper. So, you’ll need to do it yourself. 

Neither Ian or I had any kind of account experience and worse, we picked a great CPA who had no real estate specialty. Our books were horrendous, and our CPA essentially was unable to help for a reasonable price. 

Eventually, we found the right CPA and through a lot of humbling data entry, we fixed our books. But it set us back hours and thousands of dollars for not having that skill. 

Skill 6: Financial Analysis

If you want to scale your business or bring in investors, you have to have some type of knowledge in financial analysis. Or, hire someone who does. 

Luckily for us, Ian’s background is in finance, and we relied heavily on him when we first started. Had I begun this on my own, I would have gotten crushed. 

Why? Because lenders and potentially investors expect clean, logical pro formas, and more importantly, you’ll have to answer the big questions like “how much money will I make?” 

And remember this, your pro forms are only as good as your assumptions. If you’re assumptions are trash, you won’t know what you’re getting into, and if you don’t know what you’re getting into, you won’t be able to answer the question about time allocation, which is “is this property going to pay me enough to make it worth my time relative to other opportunities.”

Believe me when I tell you, if you can’t answer these questions, your potential investors or lenders will pass you by because  as Mike Conlon puts it, “you can only take on so many projects at a time.” 

Skill 7: Collecting Back Due Rent

Evictions are no fun for anyone, but you have to know when to execute this power. 

Most people won’t believe this, but the mobile home park industry is a collections business. The art is being able to pad your revenue with late fees without increasing your uncollectible bad debt. 

If you continue to practice this skill, eventually, you’ll be able to spot someone who is going to go belly up before they finish explaining to you their situation. But, some people are so good at living on the fringe of always losing it all, that their stories are incredibly persuasive. 

I have tenants that I have never met and will likely never meet. I have tenants that I know on a first name basis because they are always up to something. 

Is that additional aggravation worth the late fees? You’ll need to determine that for yourself. 

Skill 8: Emotional Intelligence

In the heat of the moment, people don’t always listen to reason. Sometimes you’ll need to diffuse a potentially dangerous situation. 

Emotional intelligence is half understanding situations and how to handle them and half understanding yourself and how to control your own emotions. 

Regardless, if you want to be a better persuader, marketer, manager, you’ll need as much emotional intelligence as you can get. 

Skill 9: Employee Management

I’ve never had more than a handful of employees under me at any given time so I do not feel comfortable taking a deep dive into this because I am still learning and making mistakes. 

Having an employee is like having a spouse. They’ll either amplify the quality of your life or multiply your misery. At times, they'll do both at the same time. In my limited experience, I will say like finding the right spouse, finding the right employee will make your shortcomings that much easier to overcome. 

Skill 10: Contractor Management

Hiring a contractor isn’t like buying something at Target where if it doesn’t work out, you can return it and get a refund. Hiring the wrong contractor can set you back thousands of dollars, if not more. 

You’ll need to make sure you’re getting the most out of your contractors while also making sure they are motivated to continue to work with you. It’s tough to find good work. When you find it, you need to find a way to keep them happy. 

When they’re bad, you need to find a way to minimize the damage and then never call them again. 

Skill 11: Property Management 

I could talk for days about property management. Unfortunately, if you are starting with nothing, you will not be able to hire a property manager while also being able to quit your job. 

Here’s what I did….

When we first started, I quit my full-time job and paid myself what we had budgeted for a property manager. The good news was that I only had to be my own property manager for about 14 months. 

If you ask Ian, he will tell you that it was painful, but he’ll also tell you that it was the best thing for him and I because we achieved a frontline experience and an education that no bootcamp could give. 

Skill 12: Spanish Speaking 

Regardless of your political affiliation or thoughts on immigration, Spanish speakers are flooding this country legally and illegally and the excuse of “it’s our country, and you should learn our language” isn’t going to work and will not get you paid. 

I have had some wonderful tenants and contractors who are full citizens that just didn’t learn English. The most important thing for me is building trust. So, while my Spanish is not great, I built a working knowledge of conversational Spanish that I could use daily. 

It means a lot to people when you meet them face to face and confidently to them in their language. 

Could you outsource this? Sure, but you will lose a seriously good opportunity to build trust.

Skill 13: Efficient Time Allocation

You must be able to identify the most valuable activity and maximize time spent on those. 

It’s not as easy as saying “X activity pays $10, Y pays $5, and Z pays $1.” If that were the case, if you can do one, obviously you would take the $10 activity and if you could pay someone $2 to do the $5 activity, you would. 

Unfortunately, life doesn’t always make things that simple, and there are a ton of time traps out there. 

Put it like this, spending an extra hour on a pro forma might lock in an investor, but spending that same hour cold calling might get you a finder’s fee or a new deal. 

What’s the takeaway? 

The bad news about not having some of these skills is that you will have to pay in some way, shape, or form for not having them. 

The good news is that although someone will have to be compensated, there is no reason that it can’t be you. 

You can’t get anywhere in life without sacrifice, especially if you are starting with nothing. Where there is difficulty, there is value. Where there is value, there is compensation. 

If you’re willing to do what it takes to learn and are able to find someone willing to pair up with you, then you, like I did, can find a way to start with nothing. 

MHP_IRL Ep. 15 "POHS vs TOHS"

Editor’s Note: Welcome to the companion article to Episode 15 of the MHP_IRL podcast! The purpose of this article is to expand your podcast listening experience with additional content. Companion articles will unpack larger concepts that we talk about during each episode that will give you practical and most importantly, actionable advice that you can apply to your MHP investing journey. 

Park owned homes versus tenant owned homes….

*sigh* I can feel the tension already.

Understanding the major core differences between park owned homes and tenant owned homes could be the line between making and losing money. It could be the line of continuing to work for yourself or going back to working for someone else. 

If you could do me a favor and just trust me when I tell you that this topic is important, I would appreciate it. Fully understanding the pros and cons of park owned homes and tenant owned homes can help you decide what strategy best suits your goals. 

In this article, I discuss the nine core differences between these two models. 

Core Difference 1: Quality of the Tenant Base

Mainstream conventional tenant owned home wisdom would have you believe that a homeowner takes pride in their home where a renter does not due to lack of ownership. This way of thinking would have you further believe that pride of home ownership then permeates into the culture of the community, which raises the quality of the neighborhood.

Here’s the thing, while there is a lot of truth behind the conventional wisdom, I disagree that this way of thinking should be a rule of thumb because (news flash) it isn’t. In fact, pride of ownership, when it comes to homeowners, can be a massive pain in the butt.

You get homeowners who are entitled.

I’m sure you’ve heard this, or something like this before, “Well I own this home so I have the right to __________.” 

This could have been said in a range of things. 

• This is my home so you need to build me an asphalt parking pad.

• Stop my neighbor from painting his house blue.

• Install french drains to divert water from my house to your land.

• You need to cut these trees down now because they will kill me and my family if they aren’t down in the next 24 hours. 

Whatever it is, entitlement is a kicker and can leave a sour taste in both party’s mouths. 

You get homeowners who generally don’t care or can’t afford to care. 

I’ve had plenty of homeowners that couldn’t care less about their home, their community or the fact that they were living in filth. The worst part about this is that it’s their property, and there is very little you can do to intervene. Your notices and fines won’t always remedy the situation. 

And, unfortunately, sometimes these homeowners can afford to or have time to clean because they are struggling to work three jobs.

To go on with the convention argument, a renter by nature doesn’t take pride in where they live because they don’t own it.

I can’t disagree more. I have some incredible renters that ACTUALLY fix smaller issues on the home AND help around the community with common area maintenance.

Why? They take pride in where they live even though they don’t own it.

Simply put, you don’t actually have to be the owner of something to take pride in it.

Take me for example...I am a huge Carolina Panthers fan. I don’t own the team (wish I did!), but I find myself saying things like “my team and our fans” and similarly people who rent from me say things like “my home and our community.”

Now, that isn’t saying I don’t have trouble with renters. Renters on the whole have given me more stress than homeowners. If I took the time to do the math, I bet the numbers would show that renters are much more likely to lack pride of ownership than homeowners.

However, I truly believe pride is a state of mind, not a signature on a title. 

Core Difference 2: Control

If you want to have a smooth, in working order mobile home park, control is a BIG issue you need to think about. Park owned homes will allow you more control than tenant owned homes. 

Why? 

With tenant owned homes, it’s much more difficult to get them out and they know it. Because they know it, it’s much more difficult to get them to comply with home and yard upkeep, as well as general behavior.

Tenants really do have the upper hand. There is nothing stopping a tenant from moving the home out other than the expensive cost of exit. But, it does happen. 

And, as much as you preach that you have screened all of the people who live on the property, people will move in and out and a lot of times there’s not a lot you can do.

I’m sure you’re thinking, “Ryan, this happens in park owned homes, too.” 

You’re right, it does. But, a tenant might sell their home to someone right under your nose. And trust me when I tell you, it can be difficult, if not impossible, to block a sale.

Core Difference 3: Evictions

By law an eviction has to be done as a repossession case in the magistrate court. With a park owned home, you’re attempting to repossess your home. With a tenant owned home, you are repossessing your land.

If someone can’t afford a few hundred dollars to stave off an eviction, what makes you think they’ll have thousands of dollars to move their home off your property? 

What if they can’t sell? If they don’t sell, you’ll be stuck with an abandoned home that could take months, if not years, to obtain a title to. That’s months of no revenue. 

What if they were in the process of financing that home? You might have to deal with the lender on a foreclosure or a short sale, which is a nightmare. The lender holds the lot hostage with their home while not paying you lot rent, while you have to bid against mobile home poachers trying to rip the home from your property.

Now, contrast that knowledge with this—depending on the state, you can have a renter out of a park owned home within 45 to 60 days. You can even negotiate a peaceful exit and have them out earlier and the home left in better shape if the exit was handled well.

And bonus! If you find out a renter snuck in someone that is less than desirable, depending on the state, you can non-renew the lease and start fresh with a new family. That would not be the case with a tenant owned home. Non-renewing a tenant owned home and making them move their home off your land can be tricky and extremely time consuming.

Core Difference 4: Returns

When done right, park owned homes can be more profitable.

Think about it like this, if you can achieve $300 more per month by renting, that is $3,600 more annually. 

I’ve mentioned before that in some markets, traditional rental rates are sky high whereas the market for lot rent just hasn’t caught up yet. Leaving a delta, in some cases, $700 or more per month. A delta of $700 per month is $8,400 annually.

Now, let’s say that you have to replace a roof, an HVAC, and do a major rehab all in the same year, which is going to cost you $10,000. This is a worse case scenario, but with the right renters, that can pay for itself within a year or two. 

If you have the know-how, the right team in place, and a good understanding of the market, you have the potential to make way more in terms of profit with a park owned home model. 

Core Difference 5: Net Operating Income (NOI) Variability

According to Investopedia, net operating income (NOI) is a calculation used to analyze the profitability of income-generating real estate investments.

NOI = All revenue from the property - all reasonable necessary operating expenses. 

Park owned homes carry more variability when it comes to operating expenses. More things could go wrong in a park owned home community. 

Have you ever had a house that’s been quiet, in good working order, for years turn into a nightmare overnight? It’s not fun and requires a lot of work. 

Yes, this can happen in a tenant owned home, but the cost may be on them. 

Core Difference 6: Financing

*Oomph” Financing is nothing if not a pain. 

I can remember a time when banks did not like the idea of park owned homes. Even back in 2019, the stigma was getting better, but it was still hard to get a bank interested. Why is this a problem? Because it limits your ability to obtain financing. 

And get this, banks don’t even like rent to own and lease options.

Let me tell you a horror story. 

I’ve had banks hold all of the titles as collateral. Meaning we couldn’t execute a park owned home to a tenant owned homes conversion strategy because the titles all came with a lien. This even happens with refinancing opportunities.

But, it makes sense. A tenant owned home model is less risky so naturally it will command more favorable debt terms. 

If you’re new to the industry, and don’t have the connections and bank track record, you could seriously have trouble finding financing on a heavy park owned home opportunity.

Core Difference 7: Management

The idea that you’ll find the manager living within the community sounds great in theory but is hit or miss in reality. 

Our first full time hire was an in place manager that lived in the community. We’ve also purchased communities where it’s obvious no one living there would be a good fit.

Both park owned home communities and tenant owned home communities need to have a manager that knows what they’re doing. But, with more experience comes a demand for a higher salary. 

Now, one thing you should be asking yourself is, “what if my manager quits?” 

If you own a large community, you might not have a problem finding a replacement. The bigger the community, the bigger your pool of candidates regardless of the park owned home or tenant owned home model.

However, let’s say you have a small tenant owned home community that’s several states away, in a market you don’t understand, you might want to consider how difficult it will be to find or even replace a good manager.

Core Difference 8: Scalability

Park owned home communities have more going on thus presenting a human capital problem. It’s hard finding good employees and your team will need to be larger and more talented. With more trips to the store, your books will have more activity. Meaning you’ll need a bookkeeper or a full time accountant sooner.

Like I mentioned earlier, even well run parks need skilled managers whereas tenant owned home communities can get by with serviceable ones. And finding a trustworthy, knowledgeable yet reasonably priced maintenance worker can be like finding a unicorn.

Even when you find someone, they can only do so much in one day. Meaning if you break into a new market, or add scale in your current market, you’ll have to find help.

Core Difference 9: Liability

No matter your structure, you’re inheriting liabilities. Be it dog bites, trees falling, septics breaking, roads crumbling….the liability is there. 

BUT, if you don’t own the home, that dramatically limits your liability. BUT, just because you don’t own the home, it doesn’t absolve you from liability all together. 

Not being able to control the condition of the home can present unique issues.

For example, at a tenant owned home in one of our communities, a tenant had her sewer pipe burst and sewage was draining into the streets. Thankfully, the tenant was wonderful and we worked out that we would pay for the fix and she would pay us back.

But think about it….had she been unreasonable and left the pipe unfixed, sewage would have continued to run down the streets. 

There is way more liability with park owned homes, but the lack of control with tenant owned homes may expose you more than you think.

The Takeaway

This topic is so incredibly important that I need this to be said. Both models have pros and cons that need to be weighed against your goals. 

What are you trying to achieve? What is your long term strategy and more importantly, your end game? 

If you can answer those and assess the nine core differences between park owned homes and tenant owned homes, I believe you can make a well-informed decision. 

MHP_IRL Ep. 17 "Charles DeHart: Database Legend"

Editor’s Note: Welcome to the companion article to Episode 17 of the MHP_IRL podcast! The purpose of this article is to expand your podcast listening experience with additional content. Companion articles will unpack larger concepts that we talk about during each episode that will give you practical and most importantly, actionable advice that you can apply to your MHP investing journey. 

You can have all of the money in the world….

But, if you’re not determined, if you don’t want it bad enough, it’s not going to happen for you. 

These wise words come from my friend, the database legend himself, Charles DeHart. 

That’s right, if you’re new to the industry, Charles is someone in the industry that is KNOWN for having one of THE most comprehensive databases. (And they’re not lying—I’ve seen it myself!) 

Here’s the thing: Charles didn’t start out with a huge database. In fact, he wasn’t even in the real estate industry at all. 

When Charles first got into mobile home parks, he was working as a government security contractor in Baghdad, Iraq, for the United States Embassy. 

“There was this company called Triple Canopy. It was paying $150,000 to $200,000 a year. I took that job, which is kind of like a black hole, and I felt like real estate was my way out,” Charles said. “Somewhere around my ninth and tenth deployment, I got into mobile home parks.”

“I found it through a real estate agent. Then, I went to a Frank and Dave bootcamp, and then I started to work on my database. Building the database was my way out from this blackhole of continuing to go overseas. It was a huge necessity to build it and then eventually it became really good.”

Building a comprehensive database can be a lot of work. It’s time-consuming, you have to do a lot of research, and it has to be organized. 

In Charle’s experience, he believes he has an advantage, “You have to understand my typical day there. I’d wake up at five or six in the morning, and we were doing something around nine in the morning. But, my workday was done by 1 PM every day. So from 1 PM until 10 PM, my day was pretty much wide open. During that time, we weren’t allowed to do anything. We weren’t allowed to go out in the town. You were stuck there in the embassy. So there were a couple of options. You could watch TV. You could play video games. Instead of that, I did databasing. So, for me, it wasn’t like this epic grind. There was nothing to do so I just did that.” 

Charle’s rotations were four months at a time. For 10 hours every day, he would do databasing. Now, 10 hours seems like a lot of time to be working on something like this, but for Charles, “It took me forever to figure out how to do that database. I did not reach out to an owner until about 90 days into the project and during that time period, I spent the last 15 days of deployment reaching out to them.”

Now, in hearing Charles’s story, I had to ask him what were some challenges that he faced. I mean, let’s think about this….

Charles was overseas. He had no connections. He couldn’t leave the embassy. There had to be something. 

His challenge? Making phone calls. 

“The big challenge was that I had a phone in my room, and it was a California phone number and then when you dialed it, it would go to a switch board, and you would have to dial a seven digit room number. There were a whole bunch of hoops that you had to go through to get to my room. I couldn’t use that number. I also had a cell phone from Iraq and if it came on your phone, it would be 18 digits. No one was going to answer that. Then, I had my cell phone which was three dollars per minute. I had to make all of my cold calls from my cell phone. Our wifi was absolutely terrible. We couldn’t use Skype or anything else. It would cut out,” Charles recounted. 

Not only does that sound time-consuming and frustrating, it also sounds expensive. Imagine having to pay three dollars per minute to make, sometimes, fruitless calls. 

In the end, Charles had this to say about his experience, “The experience was fun. Having multiple moving pieces, all of these things standing in your way, I think the test is really the fun part. When you’re starting out, you don’t really realize that you’re in it. But when you’re done with it, you look back and you realize how fun it was.” 

To play off of Charle’s, and others like him, experiences, being a beginner in this industry can be nerve-racking. It can be hard. It can break you. 

When you’re in the eye of the storm, it’s not so fun. From building your own database, raising capital, getting your deal and so forth—shit can feel soul crushing. 

But, here’s the thing, even if you think you’re starting out with nothing, you have something. This thing is, many times, something that the others around you may not have. 

Determination. 

“You are starting with your own determination. You could have all of the money in the world, but if you’re not determined, if you don’t want it badly enough, it’s not going to happen for you,” Charles advised. “I think that’s the mentality you have to have. If you’re not coming in with family backing or tons of money, it’s just you...find out what the one thing is that you’re willing to do that no one else will. Then, you got to go do it. That’s what’s going to make you successful - being the person that’s willing to do whatever it takes.” 

The good news? This industry has a TON of room for growth and innovation. 

“There’s a ton of dinosaurs out there. Someone is going to approach our industry and do it a different way that’s going to make a big wave. That innovation will make way for someone who is paying attention to get into the industry. So, just pay attention.” 

These days, it seems like everyone and their mother is getting into the industry. It’s definitely not like it once was. Not that that is a bad thing. It just demands smart, strategic thinking. 

“I think the best opportunities I’ve seen lately are infill projects so if you can set yourself up to do huge infill projects and do them quickly and better than everybody else, it seems like those guys are really making money these days. Whereas the people who are just trying to buy really well, and do an operational turnaround, you don’t really see operational turnarounds that look like good investments,” Charles said. 

Here’s something to remember with projects like this. You’ve got to keep your costs down because the numbers don’t look good if you’re spending $15,000 to $20,000 to bring a home in and slap someone in and not be able to sell it. 

As my good friend Mike Conlon says, “you can only take on a certain number of projects at once.” 

If you come into this industry with this mindself of “I’m going to scale up this portfolio in 12 months” you may be able to do it, but I gotta tell you I work every day and it is really difficult. It is easy to outsmart yourself and buy some stupid properties. It is really difficult to find something where the investors are happy, you’re happy, and the tenants don’t get screwed over.

I’m not telling you to scare you off. In fact, it’s the opposite. I think people should get into this industry. I think we need more smart, hard working people because there is a serious crunch on affordable housing and I think people who really care about others should get into this industry. 

Those who are willing to grind it out, who have the determination, who are willing to make the sacrifices, those are the ones who are going to come out on top. 

Where will you stand? 

MHP_IRL Episode 6

Editor’s Note: Welcome to the companion article to Episode 6 of the MHP_IRL podcast! The purpose of this article is to expand your podcast listening experience with additional content. Companion articles will unpack larger concepts that we talk about during each episode that will give you practical and most importantly, actionable advice that you can apply to your MHP investing journey. 

 Sellers become overly confident when they start to get multiple offers to purchase their property. Regardless of the condition of the asset, they become convinced that they’re sitting on a gold mine. 

The property could have deferred maintenance and need a lot of work, but these properties are listed at the premium cap rate and people are willing to pay for them. 

You’ve got single investors snapping up properties, small practitioner groups trying to get their feet wet, and large corporations that already know how the game works. 

BUT (and this is a HUGE but) in these conditions the market becomes overly optimistic. Buyers are waltzing in paying top dollar or even above asking price for properties that need a lot of work and require a large lift to get up and running. Thus, a seller’s market is born, and the price of your deals increases exponentially. 

For those that are average Joes that are trying to invest in mobile park homes, you’ve got to stand out, and you’ve got to be able to compete in a frothy market.  How far are you willing to go to make the sale? 

My answer to you? 

You’ve got to be willing to go just a little bit farther than anyone else out there in order to set yourself apart. 

If you don’t have grit, get out of the game. 

Grit, by definition, is perseverance combined with passion, and according to Margaret M. Perlis, there are not one, but five characteristics of grit. 

• Courage 

• Conscientiousness

• Long-Term Goals and Endurance 

• Resilience 

• Excellence Over Perfection

Sure, you can have a snappy sales pitch (looking at you Billy Mays and OxyClean), but if you don’t have the grit and strength to drive forward when the door slams in your face...this game isn’t for you. 

It’s really about overcoming objections and feeling people out - that’s what true salesmen do. Salesmen don’t stop at the surface objections. Good salesmen play therapists and figure out the true objection to selling hidden in between the lines of the conversation. 

Those who are successful become that way because they put themselves in difficult situations, and are willing to navigate nuanced and complex conversations with sellers...even if it doesn’t work out in the end. 

In Episode 6 of MHP_IRL we meet Broker, Sam Kline, who spent two to three months getting to know a potential seller after knocking on their door. He took the time to understand their assets and even had a full cash offer in front of them. After months and months of working with this person, they still decided not to sell. What was even worse was that Sam recently found out they eventually did sell. And even though he was told he would be the first person they would call, they went with someone else. 

What’s the lesson? 

You can’t be the quarterback who obsesses over the interception. You have to go back to the next drive and get your team to the touchdown. 

Personally, I admire the hell out of people who have the guts to walk up to someone’s front door and say, “Hey. Can I have your listing?” 

We’re at a time in our lives where our face to face interactions have been replaced with social media. I mean, you can’t even walk down the street without seeing everyone’s faces buried in their phones. 

When you’re a salesperson, nothing beats out face to face contact - you’re not going to convince anyone to sell just by picking up the phone or sending a postcard. 

You have to get out there, go door knocking, and talk to people. If they’re like everyone else on the planet, they will want to talk about themselves. 

According to Scientific American, people spend, on average, 60 percent of conversations talking about themselves. Use this to your advantage. Ask them how they got their mobile home park started. 

People who own mobile home parks might not want or haven’t thought of selling. Asking them about their pride and joy is a simple way of showing your interest. This property has been in their family for generations. And they often look at these parks as their family's legacy. 

This means getting in their living rooms, sharing a cup of coffee with them, hearing the good, the bad, and the ugly (even if it means you STILL won’t get the deal). You just can’t replicate this kind of personal touch over the phone. 

I have to pause here and recount some of my conversation with Sam as he’s told me that many people would accuse him of being aggressive for going to knock on doors. 

“When someone’s tough on the phone, it’s even harder for me than going to see them,” said Sam. “I work the phone too, but I get a lot of enjoyment driving around to look at properties and talking to people.” 

“Don’t you just get a thrill thinking about getting out of the office?” I said to Sam, “driving with the windows rolled down on a nice day, and cruising through areas looking at properties? I admire the hell out of people who do this. It’s a rush because the more you turn over cards, the more of a chance of getting a listing.”

For me, it’s one reason why I get so “lucky.” People ask me all the time, “Ryan, how’d you get your last five listings?” 

My first reaction is to say, “right place, right time.” But mostly it’s because I put myself out there, listening to 100 stories about generations of families passing this property down, and out of those 100 stories, I get a few bites. 

As Larry Bird says, “The more I practice the luckier I get.” You just have to get out there and put yourself in those uncomfortable situations. “What’s the next guy doing and how can I one up it?” should always be your go to question. 

Investor #1’s main strategy is to send a few postcards and wait for the deals to come to him. This is pretty comfortable and low risk. He might get a couple of bites, but it’s pretty much up in the air. 

Investor #2 takes it one step further. He spends everyday banging the phones, looking to close deals.  This is a little less comfortable and kind of risky. He could get a crabby person on the phone telling him to take them off his list and he’ll never sell. 

Investor #3  in a league of his own. He’s not sending a postcard or making phone calls. He’s knocking on doors. This step is SO uncomfortable that not many people are willing to do it. I have so much respect for the ones who do though because they put themselves inside the opportunity and don’t leave it to chance. 

The lesson here? You want to be investor #3. 

“Right place, right time” is less about luck and more about what situations you’re willing to put yourself into. 

Unfortunately, just because you’re willing to put yourself in these situations doesn’t mean you won’t face objections. Trust me, there will be TONS and you’ll have to overcome them. Be ready and willing to face objections. 

For Sam, he says he sees it all the time. You’ve got people who are making MONEY on these properties who want to sell.

Sam’s motto is “I don’t sell real estate, I solve problems.” 

He says, “In these situations where you’ve got people making money from their property and they want to sell, you have to ask, “why do they want to sell?” because who sells when they’ve got money coming in (am I right?).” People don’t sell an asset when money is flush, there is a problem somewhere down the line. And most of the time it’s because they don’t want to pay capital taxes. 

Instead of just trying to sell the property, Sam offers alternatives. 

Say you’ve got an individual who can sell a mobile park home for $1.3 million, which puts them in the AAA lease game. This person can probably buy a cheaper property and while they’ll cut their income down, they’ve just offloaded the work that they would have to do for the mobile home park. It’s practically a win-win situation. 

Then, you’ve got the people who are just tired. They don’t want to continue putting in the work. That’s fine too. This is where “luck” comes in. You’ve put yourself in a situation (knocking on their door) and can offer them a solution. 

It’s called being persistent. Not every knock on the door is going to be a win. You don’t need 10 wins (although that would be great), you just need one. 

Sam and I sat down to talk with one gentleman for 45 minutes about his property. I brought out the big guns and told him that I was Irish Catholic. This guy loved me. Everything is going swimmingly, until we get to the price. The guy wants to sell for an out of this world price. And no matter how much this guy liked me, we were just too far apart on the selling price to get to a deal. 

It’s a lot more common than you think. Nine out of ten of these conversations go like this especially in a seller's market. You just have to grind this out and bring the seller to your level. 

If there is anything that I want you to take away from this article it is this: 

In order to stand out in a competitive market, you’ve got to be willing to do things that other people aren’t willing to do. 

• Get out of the cookie cutter box: Everyone wants the same type of property and those properties don’t come cheap. Do a little extra digging. Find the property that is a little out there, maybe it needs some work. 

• Be willing to take on some challenges: Once you’ve found a property that isn’t going to be a galljillion bucks, recognize that might face some challenges. Maybe there’s some maintenance on the property that will need to be taken care of. That’s okay. 

• Come to terms with what you’re willing to sacrifice: When you’re just starting out, you’re not going to have it all figured out. Figure out quickly what you’re willing to live with and to live without. 

• Figure out if you want quick, low risk cash or if you’re willing to roll up your sleeves: If you want a property that you don’t have to do anything to and it is low risk, it will cost you a pretty penny. But, if you’re willing to get down and dirty, it can be worth it. 

I’ll leave you with one last story that Sam told me. 

If you’re a regular person and not a corporation, you have to realize there is a fringe in the area you live. There are opportunities for you to purchase a building that needs work (the more work, the lower the price). 

Sam recently had a building that was vacant. It was gutted on the inside. The building was listed for $99,900. He probably showed it 100 times. Out of that 100 times, one person got excited. The buyer wanted to create a gallery space. Ultimately, she bought it for $58,000 and fixed the building. The building looks so good that Sam takes individuals on tours and points out this building. 

This game is all about figuring out what you’re willing to endure to get the deal and improve the asset . Beyond that the only thing left to do is GO FOR IT. 

Perseverance: The Hungry Bird Gets the Worm

Perseverance: The Hungry Bird Gets the Worm

Editor’s Note: Welcome to the companion article to Episode 4 of the MHP_IRL podcast! The purpose of this article is to expand your podcast listening experience with additional content. Companion articles will unpack larger concepts that we talk about during each episode that will give you practical and most importantly, actionable advice that you can apply to your MHP investing journey. 

“Ryan, what the hell are we going to do?” 

I’ll never forget this day, it was a crisp fall morning in Charlotte and I was waiting for the train to bring me to my stable full-time banking job. 

“There’s absolutely no deals in the hopper, and there’s no way that this one deal is going to keep the lights on for me man. It’s not making enough money”, Ian said in one long exasperated breath. Ian was completely panicked, I could tell by the sound of his voice. 

Let me interject here before I continue with this story. Ian was not alone in having this freak out moment. At the time we had only been in business for a little over a year together, I was still working at my cushy corporate finance job, Ian on the other hand had gone all-in. He was solely relying on this business to cash flow in order to cover even his basic expenses. 

But I too would have my fair share of freak out moments along our 3 year investing journey (more on that later). Now, back to Ian…

“If we don’t find another deal soon, I’m going to have to get another job”, he said, his voice wavering in frustration. 

I took a deep breath and looked off towards the train pulling into the station.  How was I supposed to sit here, ready to start the day at my cushy corporate finance job--one where they would be giving me a guaranteed paycheck at the end of the week--and tell my desperate business partner that everything was going to be fine? 

Ian did have every logical reason to be concerned. The market was tough, we had no deals on the horizon, and there was no certainty that we’d be making more money anytime soon. 

“You must overcome fear and take risks”, I heard myself saying, almost before I even had a chance to fully think it over. It was a quote from a book that Ian and I had both read called “Secrets of a Millionaire Mind” by T. Harv Ecker. “We knew this was coming, we can do this Ian, we can’t let the fear control us”, I reminded him. 

Here’s the moment in the conversation where Ian could have told me to go kick rocks. 

Because it’s true, in that moment his mind could pull up on-demand a million and one doom and gloom scenarios. My mind could have honestly gone to that same place as well. But I fought against letting my thoughts even go there, and I reminded my friend to do the same.

I knew that I didn’t have any certainties to offer him. But I did know who we were as individuals, and what we were capable of. I knew that come hell or high water, we had signed up for this, and that we COULD pull this off. 

“I know, you’re right, it’s just a dry spell” Ian said after a long pause. 

“Thank man, I needed that today”--bullet dodged, Ian was back on track!

And I kid you not, just a couple of HOURS after that fateful conversation, a deal had surfaced that Ian and I thought had gone cold months before. We were under contract shortly thereafter, and just like that, the roller coaster went back up again…

Until it came crashing back down, and this time I was one who was riddled with panic. Remember when I said that I’d share my freak out moment? Well here it goes...

“We need to talk”, I said to Ian one afternoon. Which is probably one of the most ominous ways to start a conversation that I can think of. But the fear was beginning to mount for me. 

It was 2017, it had been a tough few months and we were in yet another dry spell.  There was pressure coming from different angles, and cracks were beginning to show in my armor. The grind had completely worn me down to the point where I began to question if our strategy was even right in the first place. 

“We’re not growing fast enough, I think we should pivot” I said to Ian on the other end of the phone. 

“Pivot? Okay, what’s your thinking behind that?” Ian gently challenged. 

“What’s my thinking behind that? Money! We need MORE money, like yesterday”, clearly I was getting to a fever pitch. I immediately began to rattle off reasons why we weren’t scaling fast enough, and how we weren’t going to be able to sustain ourselves on what we were currently making. 

I was so freaked out, I was actually ready to completely abandon the initial strategy that Ian and I had sat down and carefully mapped out. This strategy, might I add, is one that we spent hours researching. It was one that we had decided on LONG before there were these kinds of heady emotions in the mix, and well before Ian and I had any real skin in the game. In other words, this strategy was objective, based on fact, and was far removed from any type of emotional reasoning. 

“You’re not wrong to challenge the strategy Ryan, but if you’re going to do that, you need to do it for the right reasons” Ian said matter-of-factly. Ian knew that I was in the grips of some pretty strong emotions, and that I may be in need of some perspective. And I’ll always thank him for his insight during this time. Whether he knew it intuitively or not, I needed to be talked off the ledge. 

Had Ian decided at that moment to feel my fear, and let it get into his head. We may have changed the business plan that has made us so successful today. Archimedes Group may not even exist if we had gone with my fear and made that pivot. 

So what’s the lesson here?

If you can take anything at all from this experience it’s this: 

Fear will always be there, and you damn well better learn how to get comfortable with it. 

This may be blunt. But it’s something that anyone hoping to work for themselves must get comfortable with, and quickly. 

Because the truth is, entrepreneurship IS risky. And more often than not, the stakes are incredibly high. Your life savings, your home, your family could all be on the line at any given time. And I don’t know about you, but that’s enough to keep me awake at night. 

Just because Archimedes Group has successfully scaled, does not mean that Ian and I no longer experience fear. I think the thing that success can give you is perspective--and the ability to manage your fear better. 

Our brilliance in those individual moments to each other was to help the other manage their fear. 

My suggestion to you? 

Build accountability systems in place early on to help you manage your fear. Whether it be a friend, business partner, or trusted mentor. You must surround yourself with people who are going to talk you off a ledge and set you back on the right path when the going gets tough. Because your own mind can be a personal hell if you let it run wild with fear. 

For more daily insights on the MHP investing journey, check out my LinkedIn Page. 

Spousal Buy-In: Battle of the Sexes

Editor’s Note: Welcome to the companion article to Episode 2 of the MHP_IRL podcast! The purpose of this article is to expand your podcast listening experience with additional content. Companion articles will unpack larger concepts that we talk about during each episode that will give you practical and most importantly, actionable advice that you can apply to your MHP investing journey. 

“DREAM KILLER!”

I’ll never forget the look on Ryan’s face the first time he said this to me.

We were having a heated argument over the kitchen table. 

Ryan’s face was twisted in frustration, his finger was pointed at me accusingly --he was at the end of his rope. 

I wish I could say that this is the last time we ever fought like this, or even that it was the last time I was called a dream killer. Unfortunately for us, this was to be the first of many in a heated game of tug of war that we were about to enter. 

Let’s pause here for a moment….

It’s been 3 years since MHP_IRL Episode 2 aired, and a lot has changed in our lives, business, and marriage since those early days.  My name is Jennifer Narus and I’m Ryan’s wife. After dozens of episodes in the podcast’s three year history,  Episode 2 continues to be one of the most listened to episodes to-date. 

Why?

Because even on your own, entrepreneurship is a journey filled with risk and unforeseen pitfalls that is enough to make even the battle-hardened veterans take pause. The journey is riddled with missteps, miscommunications, and second-guesses. Now throw a marriage dynamic into the mix, and you just put the game difficulty on hard mode. 

The journey that Ryan and I have gone through together as entrepreneurs and as a married couple has been no walk in the park. But the struggles that we faced in those early years can’t just be boiled down to mobile home park investing. The struggles we faced in those early years had much more to do with our inability to communicate and listen to each other much more  than it had to do with our entrepreneurial journey. Mobile home investing served as the rope that we chose for this particular tug of war game. 

This article will give some perspective on those early years. I’m going to share some tips on how to grow well with your spouse in business and use it as a catalyst to strengthen your marriage. 

Now back to the scene at the kitchen table….

That day, Ryan had come home and confidently told me that we are completely changing the course of our plans and dumping all of our savings into trashy, run-down mobile home parks. 

I was livid. 

You see this wasn’t the plan. Ryan and I had the next 5 years of our life all mapped out, and becoming mobile home park investors was definitely not part of that plan. We’d already sacrificed so much to build our future life together.  Ryan had been finishing his MBA internship with Carnival Cruise lines in Miami, Florida while I stayed home in small town Winston-Salem. I was planning our wedding and waiting for the clock to run out on Ryan’s internship so we could start our real lives. 

Things were just about to come together for us, before we knew it we’d be married, Ryan would land a killer job, and we’d move into a nice house, in a nice neighborhood and start our lives together. 

THAT was the plan. The one that we had talked about and agreed on together. 

Then Ryan comes home like a tidal wave one day, breathlessly explaining what sounded to me like a scheme to completely lose our shirts. Ryan excitedly spouted off numbers and ROI calculations with the conviction of a prophet hyping up the Promised Land.To Ryan--a numbers driven guy--MHP investing was the perfect medium to achieve our American Dream. 

But the words floated around in my head like Ryan was speaking gibberish. “He’s got to be kidding me” I thought. Surely he was playing a prank on me after being apart from each other for so long. But as Ryan talked on, I could tell, he was dead serious. 

I wish this is the part where I could say that I quelled my anger and frustration, and instead chose to be the supportive wife. 

But I think you can guess by now that the exact opposite happened...

“FINE, just do whatever you want Ryan, not like you’re interested in my opinion anyway!” I blurted out. 

Seeing red.  I felt like the carefully constructed plans that we had created were falling apart right in front of my eyes and it was driving me crazy. 

Ryan looked like he had just been bitten by a snake. He was so excited to tell me his idea, he never stopped to consider that I would react this way. He lowered his voice, and calmly explained the business model again (in case I missed the obvious advantages to MHP investing that he was trying to show me). 

From Ryan’s point of view I was being irrational...

“Sure, this is a risk Jen, but can’t you see? This is going to change everything for us!”

In my mind it did change everything, for the worse. My dream of white picket fences, and a comfortable life in Suburbia faded before my eyes. Instead, what suddenly stood before me was a dilapidated trailer park riddled with cigarette butts and cars on cinder blocks. 

That night we each receded to our separate corners of the house and an icy silence settled over us. 

This is the part of the story where I wish I could say that we woke up the next morning, discussed our differences, and got 100% on the same page about MHP investing. 

But again, as you’ve guessed, things didn't turn out that way…...

The sense of betrayal that I had felt at that early decision completely closed me off to anything that Ryan said. I didn’t want to listen to his explanations, especially if he wasn’t willing to listen to me. 

Ryan couldn’t understand why I was letting my emotions get in the way of an amazing opportunity for us. “Okay, I’m sorry I didn’t tell you before, but I’m telling you now!” was a phrase I remember him repeating a lot back then. 

Ryan battled my resistance with sound logic, financial analysis and persuasive market research. I wanted to hear none of it, I wasn’t going to be sold on his idea, no matter how logical. I wanted my husband to look me in the eye for a moment and actually hear me, instead of being talked at.

But that validation never came for me… 

We had reached an impasse, trapped in a tug of war, both of our hands gripped firmly on the rope. Both of us dug in our heels, unwilling to concede ANY ground in this war. 

And this battle went on, for the better part of two years. Sure, things simmered down a bit. I resigned myself to the understanding that Ryan was going to do what he wanted anyway. And he figured that eventually, I’d see the error of my ways and realize that mobile home park investing was a profitable source of income for our family. 

Looking back, we could have avoided a lot of headache and frustration if we had just stopped for a moment and considered what the priority really was. 

Because what we learned in those two years, through many disagreements and tearful conversations, was that the priority should have been focused on winning together rather than beating each other in tug of war. As Ryan says “marriage is about disagreeing well and growing together”. 

For Ryan, winning together in this situation meant that he needed to put aside his analytical mind for a minute and understand where I was coming from. He needed to understand that my resistance to MHP investing had nothing to do with the numbers, but rather feeling like I had no control over the situation. Once he acknowledged this we were finally able to make some headway and move forward. Slowly but surely, my mind began to change about MHP investing.

For me, winning together meant that I needed to put aside my emotions and support my husband. It was no secret that Ryan was incredibly passionate about this venture-- his face lit up like a guy waiting for his prom date every time he talked about MHP’s. And I’ll admit, I felt jealous, because I couldn't see what was so great about this “other woman” that had suddenly entered our lives. 

My feelings of resentment clouded my ability to see that I was actually being a bit of a dream killer. 

Once, when the rage and frustration had really boiled over Ryan furiously blurted out, “if we went belly up and had to live in a dilapidated mobile home, you’re saying you wouldn’t love me anymore? What happened to “for better or worse”?

Ouch.

That comment hit me right in the chest. And forced me to look at what really mattered to me.

Did I want Ryan, and all his passion, struggles, and dreams for the future. Or did I just want a comfortable life with Ryan? 

The answer was obvious to me at that moment, I wanted Ryan. 

And from that moment on, my heart softened, and I changed the way I looked at MHP investing. And once I started to actually let myself feel Ryan’s excitement, it became infectious. 

My three biggest tips for married entrepreneurs:

1- Make sure you’re ready for the impact that will have on your life

It seems simple, but most people tend to get caught up thinking of how more money and freedom will change their lives. They forget to consider the impact that entrepreneurship can have on your closest personal relationships. 

Pro Tip: build a strong network of supportive people to share this journey with you. Invest in mentors and get involved in industry groups, somewhere that you can go to ask questions when you get stuck. Speak to your spouse often and commit to making critical decisions together. 

2- Be willing to risk it all

No one said that this would be easy. But if you both go into this with an “all-in” attitude you’re going to reap the rewards of your efforts multiplied. Just like the old saying goes “scared money don’t make money” 

3- Be patient

Be patient with your spouse, be patient with yourself, and most importantly be patient with the process. There are going to be times when you feel like your business isn’t moving fast enough.

Be patient. 

Give it everything you have.

And keep your eyes on the prize. 

Where are we now? 

By learning to integrate the principles I laid out above, and seriously working on our communication skills, Ryan and I were able to get through those nitty-gritty early years. If you had asked me three years ago where we’d be, I would have said probably stuck in some old trailer somewhere using pots and pans to catch leaks from the roof. 

But here we are three years later and I’m happy to say, we’ve made it.

Ryan and I now work together full time for our MHP investing company Archimedes Group. Ryan handles acquisitions and property management among other things, and I work in the back office on administration and bookkeeping. 

It hasn’t always been sunshine and roses, and we still have days that make us question our sanity. But the important thing is, we’re prepared to handle whatever comes our way because we’ve invested our time and energy into learning how to disagree well and grow together. And these days, we find ourselves entering the tug of war arena much less.