Investing In Mobile Home Parks And Self Storage With Paul Moore

On This Episode of Peak Market Watch...

Investing In Mobile Home Parks And Self Storage With Paul Moore

Paul Moore, Founder and Managing Partner of Wellings Capital, and Anton Mattli, together with this week’s co-host, John Martinez will dive into Paul’s transition to mobile home parks and self storage facilities, and how he began investing in real estate in 2000 to protect and grow his own wealth.

Episode Highlights:

  • Paul shares about his book – The Perfect Investment: Create Enduring Wealth from the Historic Shift to Multifamily Housing
  • How he finds opportunities and vend deals that make financial sense
  • Demographic and other underlying trends during the pandemic

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VIDEO TRANSCRIPTION

family at least in the past so paul will
00:02
talk about that
00:03
but more recently more on mobile home
00:06
parks as well as self-storage facilities
00:09
welcome paul it’s a pleasure to have you
00:11
with us today
00:12
why don’t you give us a brief background
00:15
about you as well as
00:16
welling’s capital yeah it’s great to be
00:19
here guys
00:20
thank you so much i had an engineering
00:22
degree which was my first mistake
00:24
and uh then i got an mba went to ford
00:27
motor company was there for about five
00:29
years
00:30
then spent five years managing my own
00:33
company
00:34
and sold it to a publicly traded firm
00:37
moved to the blue ridge mountains of
00:39
virginia where i
00:41
started flipping houses and then
00:44
went from flipping houses to expensive
00:46
waterfront lots
00:48
at a lake resort here in the blue ridge
00:50
mountain
00:51
and then did a small subdivision and i
00:53
was always wondering how people got in
00:56
commercial real estate i didn’t know how
00:58
and my friend and i built we invested in
01:01
oil and gas in north dakota
01:03
and we saw that there was a huge housing
01:06
shortage so we built
01:07
a multi-family complex then we built a
01:10
second one
01:10
and we managed those for years i ended
01:14
up writing a book on multi-family
01:16
called the perfect investment in 2016
01:19
and that’s how i got into commercial
01:21
real estate
01:22
oh that’s great i think one of uh
01:26
wonderful pieces to fame also i believe
01:29
is that you
01:30
were on hgtv’s house hundreds at some
01:33
point right
01:34
in your earlier sleeping careers
01:37
yeah that’s right in 2008 i was on
01:39
health hunters and uh that was a lot of
01:42
fun
01:43
yeah i can imagine uh so
01:46
it’s great that you wrote that book
01:49
the perfect investment about multifamily
01:54
so but i believe now you should have
01:57
shifted gears so
01:58
why is it that you write that book but
02:00
now
02:01
your focus is more on mobile home parks
02:03
and self-storage facilities
02:06
yeah so guys the perfect investment
02:09
is not perfect if you have to overpay to
02:13
get it
02:14
and you know we’ve had a lot of stuff
02:17
happen the last seven or eight years
02:19
um since the end of the great financial
02:22
crisis
02:23
we’ve had a lot of international
02:25
investors
02:26
investing in the us we’ve also had a lot
02:30
of institutional investors buying
02:32
smaller and smaller assets we’ve had ira
02:35
investors
02:37
more and more self-directed ira
02:39
investors investing and some of them
02:42
aren’t as careful with their investments
02:44
because they feel like it’s an ira
02:46
for some reason we’ve got a lot of
02:50
newbies and i like you know
02:54
a lot of these newbies have actually
02:56
become
02:57
gurus at least they say they are and
03:00
they’re telling us
03:01
it’s over it’s okay to overpay for
03:03
multi-families so i call these guys
03:05
new ruse these are new people who are
03:08
now gurus
03:10
and they’re trying to convince us it’s
03:12
okay to overpay the price always goes up
03:15
and you know what i don’t think that’s
03:17
really good sound advice
03:19
so we’ve got my company found ourselves
03:23
for years
03:24
like three years bidding against people
03:26
who were overpaying for assets by 10
03:29
20 40 even and
03:32
i just didn’t want to play that game
03:34
anymore so we decided to check out the
03:36
other
03:37
type of multi-family which is mobile
03:39
home park
03:40
and then we checked out self storage we
03:42
were so happy
03:44
with the results that we decided to
03:46
launch a fund and now we’ve done three
03:49
funds
03:50
uh with self storage and mobile home
03:52
parks and we’ve
03:54
got um we syndicate those funds
03:57
and we we actually place the money with
04:00
the very best operators we can find
04:02
and then they do the heavy lifting
04:05
that’s great
04:06
uh uh john white you you can attest to
04:09
this
04:10
uh you’re looking at deals on a daily
04:12
basis with these
04:14
um with a lot of multi-family sponsors
04:17
that bring us deals
04:19
and we need to underwrite them from a
04:21
debt perspective so maybe you can uh
04:23
give a little bit of a flavor what we
04:25
see on a daily basis
04:27
right that’s just sure i mean anton paul
04:30
you know
04:31
if you haven’t looked at a set of
04:33
financials here lately paul multi-family
04:35
it’s getting pretty thin um you know the
04:37
challenge as you articulate it is
04:40
you know the the appetite demand for you
04:43
know cash flow investing assets
04:45
and unfortunately like the cap rates
04:47
haven’t
04:48
necessarily you know favored uh
04:50
investors even as we’re beginning to
04:52
recover a bit
04:53
from this pandemic people are looking
04:55
you know up and forward and
04:57
into the back end of the year of
04:59
possibilities of improvements and
05:01
in rents and the under underlying demand
05:03
for housing and
05:05
maybe the capacity of friends but um you
05:08
know given the uncertainty we just came
05:09
through
05:10
and in the right environment um this
05:12
excess liquidity seems to continue to
05:14
pressure
05:15
the returns so you know we’re welcome to
05:18
hear
05:19
um you know what you have as far as
05:20
other ideas and you know other assets
05:22
maybe similarities and
05:24
and pros and cons of looking up and you
05:26
know you know kind of broadening
05:27
horizons a bit
05:29
yeah you know what i love about self
05:32
storage and mobile home parks
05:34
is the fragmented nature of the
05:37
ownership base let me explain
05:40
it’s been said that 93 percent
05:43
of the multi-family assets
05:47
over 50 units in the us are owned
05:50
by companies these are companies who
05:53
have already
05:54
rung out the value they’ve done the
05:56
value adds they’ve done the heavy
05:58
lifting and so it’s really hard to get
06:00
upside on these with low interest rates
06:02
and low cap rates there’s just not a lot
06:04
of room for
06:05
error but in self storage
06:09
there’s about 53 000 self storage assets
06:12
in the us that’s the same as mcdonald’s
06:14
starbucks and subways combined and
06:18
about 75 are owned by
06:21
independent operators and most of those
06:24
are mom and pop operators
06:26
most of those are operators who have
06:28
maybe
06:29
one deal that they own and so they don’t
06:32
have
06:32
the wisdom they don’t have the value the
06:35
the time
06:36
the desire that they don’t have the
06:38
resources
06:40
to maximize the income from these assets
06:43
and
06:43
really create a lot of value and they
06:46
don’t care because maybe they’ve owned
06:48
them for 20 or 30 years
06:50
and they’re just coasting making a lot
06:52
of money and they’re all benefiting
06:54
if they decide to sell they’re going to
06:56
benefit even if they’re not well run
06:58
from this huge
06:58
cap rate compression like some of their
07:01
assets have doubled in value
07:03
in the last 10 years and they’re not
07:05
even any better than they were
07:06
10 years ago mobile home parks are even
07:09
more dramatic guys
07:11
mobile home parks there’s about 44 000
07:13
in the u.s
07:14
we believe and about 85 to 90 percent
07:17
are owned by mom-and-pop
07:19
small owners and they definitely
07:22
typically don’t have the resources the
07:24
knowledge
07:25
or the desire to maximize income and
07:28
value from these properties
07:30
and so as a result a professional
07:32
operator can go in
07:34
and they can pay a great number to the
07:37
seller
07:38
that’s we’ll call that the extrinsic
07:40
value of the property
07:42
but they can see beyond that to the
07:44
intrinsic value
07:46
and that’s the value that they can get
07:48
it to by
07:49
you know doing things like there’s all
07:52
kinds of value-add things they can do
07:55
that are pretty easy and
07:58
sometimes easier than the multi-family
08:01
world
08:02
and as a result they can raise the value
08:05
sometimes they can raise the value like
08:07
we did one last year at mobile home park
08:09
in
08:09
louisville it was acquired for about
08:12
seven million dollars that’s
08:14
about three and a half million equity
08:16
and about three and a half million debt
08:18
and it was sold by december for 15
08:21
million
08:22
and so that three and a half million in
08:25
equity went
08:26
to close to 11 million on the way out in
08:29
just 10 months so that was a 344
08:32
irr and a
08:35
3.4 x return on
08:39
equity and and that’s just in 10 months
08:41
now that’s not
08:42
normal but i want to tell you guys that
08:44
process
08:45
is normal the process of finding an
08:48
undervalued mom-and-pop property
08:51
because this property was a very nice
08:53
mobile home park with 300 and some
08:55
lots but it the owner hadn’t even been
08:58
there in five years
09:00
and so there was lots of room to improve
09:03
it
09:04
quickly and easily and it’s the same
09:07
with self storage
09:08
we had a very similar story to that in
09:10
beeville texas
09:11
there were four kids they were all five
09:14
kids actually they were all fighting
09:15
their parents had passed away they
09:17
didn’t want to run the self storage
09:19
they offloaded it for 2.4 million and we
09:22
sold it a year and a half later for 4.6
09:25
million
09:25
and so very powerful i mean that was
09:28
like a
09:29
you know several hundred percent return
09:31
on equity because
09:33
we bought it for cash raised the value
09:36
then put debt on it so it only had 400
09:39
000 in equity left in it
09:41
so 400 000 in equity after say six
09:44
months
09:45
went to you know 2.6 million
09:49
in equity when it was sold so it’s a
09:51
very nice gain and this is
09:53
really powerful for investors these days
09:56
yeah that’s uh that’s great to hear uh i
09:59
think what
10:00
what you mentioned earlier is really a
10:03
very important point right there
10:06
you have so many people flocking into a
10:09
multi-family
10:12
now when we look back uh maybe 10 years
10:17
they’ve i would say there was only a
10:19
segment that was also
10:20
so-called mom and pop owned at that
10:23
point right because they
10:24
these were properties that were not
10:26
institutional grade
10:28
and the prizing on these properties
10:30
usually
10:31
particularly in the c-class space as you
10:33
know was in the ten
10:35
twenty thousand dollar per unit so a
10:38
family or an individual could easily
10:40
own a hundred to two hundred unit uh
10:43
property uh because the value was not
10:46
really that great
10:47
but it was way below of what the value
10:50
would
10:50
have to be for institutional investors
10:53
right
10:54
so what is interesting to see is that
10:58
as the syndicators came on on into play
11:02
obviously 2012 with the chops act and
11:04
all that that had a massive
11:06
impact on on on that uh but what we also
11:10
have seen
11:11
in the meantime uh was that you have
11:14
uh once indicator buying from another
11:17
indicator and they all claim that you do
11:19
a much better job than the previous one
11:21
so what you have mentioned right that
11:23
you
11:24
uh that you can make these improvements
11:27
at some point
11:28
there is just no more meat on the bone
11:30
to make these improvements
11:31
right so the only way they can make
11:33
these improvements come up with
11:35
performer numbers that somehow show an
11:38
improvement
11:39
and we certainly have seen it over the
11:41
last two to three years that
11:42
very few of these performers really
11:46
turned out to be as good as what the
11:48
performer was claiming
11:49
despite still a very favorable market
11:53
right yeah so i think you certainly
11:55
picked a
11:56
very good time to to shift gears
12:00
but i still have a question when it
12:01
comes to mobile home parks when it comes
12:04
to competition for
12:06
for assets uh we talked to
12:09
to quite a number of mobile home
12:11
operators on a regular basis
12:14
and it appears that they also kind of
12:16
struggle to find
12:18
assets that still make sense to them
12:21
because
12:22
obviously players like you and doris
12:24
they have
12:25
the funds available so there is quite a
12:28
bit of competition there too
12:30
so i’m wondering how do you how do you
12:35
are able to still identify the
12:37
opportunities and actually win deals
12:39
that make financially sense
12:42
and still not overpaying yeah
12:45
great question so one of our operators
12:47
sends a guy
12:48
out about 50 weeks a year he travels a
12:51
lot
12:52
he’ll fly in to a city and he’ll get
12:56
all the intel uh of the all the self
12:59
storage
12:59
facilities around that area and he’ll go
13:02
drop in
13:03
all he can he’ll try to get their cell
13:05
phone number he’ll try to get the
13:06
owner’s number
13:08
and he’ll drop in lots of these
13:09
sometimes he’ll find some that weren’t
13:11
even on the map for some reason
13:13
and he will try to buy these all around
13:16
these
13:17
concentric you know central locations
13:21
so it’s sort of the hub and spoke model
13:23
another operator
13:25
had four people working the phones
13:28
full time they were calling self storage
13:31
and mobile home
13:32
park owners and operators and they were
13:34
trying to see if they wanted to sell and
13:36
it worked
13:37
so well with those four people calling
13:40
eight hours a day
13:41
five days a week that he actually added
13:43
six more so now you have
13:45
10 people working the phones
13:48
10 people who are out there looking to
13:51
acquire these properties
13:53
to buy them for this operator and then
13:56
once
13:56
they buy those again when you have that
14:00
many people
14:01
in the phones guys you’ve got a large
14:03
choice
14:04
you could say no to a lot of good deals
14:07
to get the very best deals and so if
14:10
he’s looking to close on one or two
14:12
deals a month
14:13
he’s able to say no to dozens because
14:15
he’s got these callers
14:18
very good so so so there the the issue
14:21
is
14:21
kind of similar right so you need to
14:24
underwrite a lot of deals until you find
14:26
that diamond in the rough that actually
14:28
makes sense yeah
14:30
yeah that’s it yeah that’s
14:33
uh that’s good to hear uh uh
14:36
obviously that’s the challenging part
14:39
now
14:39
you are not getting involved on the
14:42
operation
14:42
sides on a daily basis right so you’re
14:46
you are picking the right operators and
14:50
uh then essentially monitor their uh
14:53
their activities yeah that’s right we’re
14:57
we’re spending a
14:58
lot of time we consider ourselves a due
15:00
diligence partner
15:01
for our investors we do a lot of heavy
15:04
lifting to find the right operator
15:07
we take our time we usually spend six
15:11
four six eight months trying to get to
15:13
know an operator we drop in on their
15:15
properties we go to their headquarters
15:17
we see how they talk to their employees
15:19
and their spouse
15:21
and their investors and we do a lot of
15:24
due diligence and then once we find the
15:26
right jockey
15:27
we trust them to find and train the
15:29
right horses
15:32
that’s that’s great so you go through a
15:34
long period
15:36
just to identifying them and getting
15:39
comfortable with them
15:41
right that’s it yeah okay have you had
15:44
the situation where
15:46
you actually had to drop an operator
15:48
because the
15:49
after you decided that it’s the right
15:51
chalky
15:52
that you still had to say i think that’s
15:55
we made the wrong choice
15:59
we had one up so we have an operator who
16:01
asked us
16:02
if we wanted to go out and look at a
16:05
facility with him
16:06
now he is top flight in every way but we
16:10
saw some things we didn’t like
16:13
and so we told him and we don’t think
16:15
this is the best fit for your fund and
16:17
he looked at those same things
16:19
and he agreed so he cut that asset but
16:21
if he would have bought it
16:23
we trust him so much his track record is
16:26
so good i think it would have been fine
16:29
um another one we went out on site
16:32
and we were doing due diligence on this
16:34
location
16:36
and we found two different times
16:39
twice that there were other brand new
16:42
self
16:43
storage facilities being built near the
16:46
one
16:47
he was doing the investment in and
16:50
neither time he was aware of it i i
16:52
really think he was telling the truth i
16:53
don’t think he was aware of it
16:55
so after that happened twice we’ve
16:59
generally not invested with that
17:00
operator anymore we still have three
17:03
investments with them from
17:04
years ago but we’re generally not
17:08
investing with them anymore because of
17:10
that another operator everything looked
17:13
great
17:14
but he was putting none of his own money
17:16
in it zero skin
17:18
in the game and we decided with him not
17:20
investing any of his own cash
17:22
we decided to not invest with him
17:26
so what is generally the percentage you
17:28
would like to see
17:29
an operator to invest oh
17:33
their own money well i can just tell you
17:34
a couple examples um
17:36
one of our operators raised 57 000.
17:40
excuse me 57 million dollars and he
17:42
invested three and a half million of his
17:45
own money
17:46
another operator invest raised 150
17:50
million
17:51
and he rate he put in 11 or 12 million
17:54
of his money and his
17:56
team that first operator is doing a new
17:59
fund
18:00
he’s raising about a hundred million and
18:02
he’s putting in about 10 million of his
18:04
own
18:05
okay so somewhere in the five to ten
18:07
percent range
18:08
of the two yeah i think that’s good yeah
18:11
yeah
18:11
that’s i would say that’s uh that’s fair
18:15
right uh and hopefully it’s not just the
18:17
acquisition fee that they turn back into
18:20
the deal
18:20
right what we see and on the
18:22
multi-family side
18:24
as you know quite a bit where this claim
18:26
we have skin in the game but they charge
18:29
a two or three percent acquisition fee
18:31
and put that money in and then claim all
18:33
navi we have hours
18:35
in the game right yeah yeah you’re right
18:38
paul quick question and you know as
18:40
you’re looking at a
18:42
you know a stable of operators um you
18:44
they do they tend to be geographically
18:46
concentrated or you know do they have a
18:48
a good reach and and if they’re if they
18:50
are concentrated you know kind of
18:52
you know how are you getting new
18:54
operators in into into the bench so to
18:56
speak and trying to figure out you know
18:57
who’s next that you want to work with
19:00
our goal is to give diversification
19:02
across operators
19:04
geographies assets and strategies
19:08
and um it’s sort of the warren buffett
19:11
model you know
19:12
buffett owns i mean berkshire hathaway
19:15
owns dairy queen but he doesn’t pick the
19:18
flavors
19:18
and he doesn’t pick where they open
19:20
stores and so
19:22
because he trusts the managers of dairy
19:24
queen
19:25
so much he trusts them to make those
19:27
decisions
19:28
it’s the same here we do not pick
19:30
geographies
19:32
we generally stay away from california
19:35
and if somebody was heavily focused in
19:37
california we would have to ask them
19:39
you know we’d have some really hard
19:41
questions for them right
19:43
but um no we generally have nothing to
19:46
do with the
19:46
geographic selection once we pick an
19:49
operator
19:50
now if we knew they were doing a lot of
19:52
self storage
19:53
in an overbuilt area that would make us
19:56
question it you know okay
20:00
so what is the reason why you would want
20:02
to stay away from
20:04
california obviously multi-family and
20:06
maybe mobile home park it’s uh
20:08
uh it makes sense right because of all
20:10
the uh torrential laws and all that but
20:13
why would that also apply to
20:14
self-storage
20:16
that’s you know that’s true um we
20:20
just honestly our concern
20:24
is that you know the government
20:26
overreach
20:28
and the taxes and all the different
20:30
rules and the
20:31
increasing rules in california might
20:34
apply to everybody and so i’m not saying
20:37
we would not invest in california i’m
20:39
just saying
20:41
if somebody was heavily focused there we
20:44
would really
20:45
be a little nervous about that wouldn’t
20:47
be your first choice
20:48
that makes sense right yeah yeah so so
20:51
how did that
20:52
uh or those deals go where where
20:56
the operator wasn’t aware of the two new
20:58
facilities that’s obviously one of the
21:00
key concerns with self storage because
21:02
the barrier of entry is not really
21:05
that high right you can build a new
21:07
facility really quickly
21:08
so how did that turn out for you guys
21:11
there
21:12
so with one of them we invested and
21:16
it’s been mediocre honestly this was
21:19
years ago and we would never do it again
21:23
we thought that the growth in the area
21:26
was explosive
21:27
i mean it’s really literally explosive
21:30
growth
21:31
but the new facilities really slowed
21:34
down the returns on investment
21:37
on the other one we chose not to we were
21:39
all teed up to invest we were going to
21:42
invest a few million dollars
21:44
like we were doing our investor webinar
21:46
the next day
21:47
we’d already spent thousands in legal
21:51
fees
21:52
but we told them this is not good and so
21:54
we decided not to invest in that one at
21:57
all
21:57
i heard it went okay though yeah okay
22:02
so apart from from geographic uh
22:05
regions uh are your operators more fo
22:10
on the self storage side more focused on
22:12
on
22:13
infill urban infill more on suburban or
22:16
than rural areas or is it a
22:18
combination of all the three it’s
22:20
definitely a combination
22:22
the smaller towns honestly anton have
22:26
done better in some cases i mean like
22:29
greenville south carolina has eight or
22:32
nine hundred thousand people in that
22:34
area plus spartanburg
22:35
and it’s been really tough it’s been
22:38
overbuilt in self storage
22:40
yet we also invested in grand junction
22:42
colorado
22:43
we invested in beeville texas town i’d
22:46
never heard of
22:47
and those have done really really well
22:50
and they haven’t had much competition
22:52
so we like small towns we
22:55
can’t you know the large towns can work
22:57
out pretty well as well
23:00
yeah good how how did
23:03
both on the mobile home park side i’m
23:06
pretty sure it
23:06
performed really well doing call with 19
23:09
right obviously everyone has some bad
23:11
debt issues
23:12
but i think we can all agree that
23:16
from affordability perspective mobile
23:18
home parks are
23:19
definitely the the place to be in when
23:22
you when
23:23
times are tough but can you tell us a
23:26
little bit how the performance was
23:28
for both mobile home parks and the self
23:30
storage during that time
23:33
yeah you know i hate to be so optimistic
23:36
about everything but honestly self
23:38
storage and mobile home parks
23:40
with professional operators did
23:43
fantastic now i’ve heard multifamily did
23:46
really well too
23:47
and so i think we’re just very very
23:50
fortunate in the united states that
23:52
we’ve had
23:54
you know we haven’t been hurt there’s
23:56
countries around the world my friend’s
23:58
in
23:58
ethiopia right now he’s actually in
24:01
sudan today he’ll be in ethiopia
24:03
friday and he said that they’ve been
24:06
devastated by covid
24:07
my friend does mission relief work in
24:10
kenya
24:11
and they’ve been devastated by covet and
24:13
so we’re very fortunate in the u.s in
24:16
general
24:17
that we have just you know largely
24:20
escaped a lot of the worst
24:22
economic crunches from this self-storage
24:24
and mobile home parks
24:26
green street who’s an analyst who
24:29
analyzes a lot of commercial
24:31
says that mobile home parks are the
24:33
darling
24:34
of commercial real estate right now and
24:36
just
24:37
every you know we’ve just been very
24:39
fortunate to be there
24:40
yeah that’s good to hear so that’s that
24:44
message from green street is very
24:46
positive for for you as an owner it
24:48
might not be that positive to acquire
24:51
new properties because now right
24:53
more more money flowing into it
24:56
right yeah yeah that’s right
24:59
yeah so paul quick uh another question
25:02
then you just
25:03
i was thinking about as you’re kind of
25:05
commenting about how the us has you know
25:06
responded during the pandemic you know i
25:08
think
25:09
you know most of our listeners as you as
25:11
well would you know
25:12
noted uh kind of this reverse
25:15
migration you know out of you know urban
25:17
cores back into
25:20
suburban areas you know driven in part
25:22
by the ability to remote
25:23
remote work um is that impacting you
25:27
know your operators with regard
25:28
on the self storage side is you know is
25:31
there any
25:32
you know is there any impact necessarily
25:34
on the on the mobile home park side as
25:36
well and
25:37
what are some of the demographic trends
25:38
that you see you know that that
25:40
make these um asset classes favorable
25:43
not just the
25:44
you know the the granular ownership but
25:46
what are the any other underlying trends
25:49
yeah so the um self storage does
25:53
really well demographically when there’s
25:56
four
25:56
unfortunate circumstances those four
26:00
are the four d’s they’re death
26:02
downsizing
26:04
dislocation and divorce and all four
26:08
unfortunately of those have happened a
26:10
little more than average lately
26:12
and there’s just a lot of turmoil you
26:14
know people are downsizing or people are
26:16
moving
26:17
from manhattan out you know to
26:20
charlotte north carolina for example or
26:22
smith mountain lake virginia where i
26:24
am and um so with that downsizing or
26:28
with that relocation i should say
26:31
there’s actually self storage is done
26:33
quite well people are building homes
26:35
people are moving into a different home
26:38
and a lot of them need a place to store
26:40
their stuff
26:42
mobile home parks again there have been
26:46
some eviction moratoriums but the really
26:49
really well-run parks are still doing
26:52
great
26:53
i think that mobile home parks are
26:57
generally you know not located in big
26:59
downtown
27:00
obviously there’s exceptions i saw i
27:03
think i saw one in
27:04
houston and other cities but
27:07
overall they’re not in large urban cores
27:10
and so when people are moving out of the
27:13
large urban course
27:14
mobile home parks are sometimes
27:16
benefiting from that
27:18
one problem guys is that i i can’t prove
27:22
this is true everywhere but from what i
27:24
hear from operators it takes
27:25
up to eight months now to get a brand
27:27
new mobile home when you want to buy one
27:30
to put on a lot
27:31
and so these you know multi these
27:34
mom and pop operators they have very
27:37
little chance of getting a new mobile
27:39
home
27:39
at least anytime soon these large
27:42
operators who have
27:43
lots of buying power resources
27:46
relationships
27:47
some of them by used you know from the
27:50
government
27:50
even they know how to do that and
27:53
they’re they’re getting further and
27:54
further ahead as a result
27:57
oh that’s very interesting so i thought
27:59
generally
28:01
operators prefer not to own the mobile
28:04
homes themselves
28:06
right but if i understand you what
28:08
you’re saying is
28:09
they are actively providing the supply
28:12
of the mobile homes for the
28:14
the people that actually want to own one
28:16
and put it onto a pad
28:18
so we had 50 vacant lots at one mobile
28:21
home park
28:22
and so for us to advertise no matter how
28:26
much our operator advertised they’re
28:29
only going to fill a
28:30
few of those spots if any during a year
28:34
so a great operator will go buy a used
28:38
or
28:38
new mobile home they’ll put it on the
28:41
lot
28:41
and then they’ll get financing arranged
28:44
through
28:45
let’s say 21st mortgage which is a
28:47
warren buffett berkshire hathaway
28:49
company
28:50
or they’ll get financing a range for
28:52
some you know somebody else who likes to
28:54
finance
28:55
mobile home parts or mobile homes and
28:57
then they’ll sell
28:58
the mobile home to an individual and
29:01
sometimes they can get 100
29:03
financing so you’re right the mobile
29:06
home park owner doesn’t want to own that
29:08
home but they will own it long enough to
29:10
get a tenant
29:11
buyer who actually buys it is that your
29:13
experience too
29:14
yeah yeah that’s uh that’s exactly where
29:18
the the good operators are separating
29:20
themselves from
29:21
from the mom and pop funds uh
29:26
they just do not know how to how to deal
29:29
with uh
29:29
with the situation right so they know
29:32
that
29:32
they need to fill it they have uh
29:36
but they don’t have access to inventory
29:38
yeah
29:40
yeah that’s true yeah so uh
29:44
when it comes to looking into uh 2021
29:48
and 22 uh do you foresee that you stick
29:52
to
29:53
mobile home parks and self storage for
29:56
the time being or
29:57
will you look back in two years and say
30:00
that was the greatest thing i need to
30:02
write a book but now it’s
30:03
something else well
30:07
we plan to stay involved in self storage
30:09
in mobile home parks as long as we can
30:11
find
30:12
operators who know how to find these you
30:14
know mom-and-pop
30:15
fragmented deals but we’re also looking
30:19
you know forward to the day we can get
30:22
involved in multi-family again
30:24
we’re also looking at senior living we
30:27
have a friend who does a lot of senior
30:28
living and he’s making a tremendous
30:30
profit
30:31
and he seems quite safe but it’s ground
30:33
up development which makes us pause a
30:36
little bit
30:37
we would consider data centers but
30:40
just it’s just not something we really
30:42
know much about
30:44
so those are some of the things that are
30:46
on our mind these days
30:48
on the senior living side are we talking
30:51
about
30:52
independent living assisted living or
30:56
continuous care facilities
30:59
or yeah to my knowledge there’s
31:02
independent living
31:03
and then there’s assisted living and
31:05
then there’s skilled nursing facilities
31:07
and we want to go at the lowest level
31:10
the independent living
31:11
if we decide we want to do this okay all
31:14
right
31:14
very good so good to hear obviously from
31:18
a demographic perspective there’s only a
31:21
big need for it right there is also a
31:25
big need obviously for assisted living
31:28
and ultimately skill nursing memory care
31:31
and
31:32
all that uh with yeah with all the
31:34
boomer generation at some point
31:37
reaching that assisted living age right
31:41
right yeah that’s absolutely true um
31:44
there’s
31:44
10 000 people guys turning
31:47
65 every day 6
31:51
in 10 of them have less than 10
31:54
000 saved for retirement so those
31:57
six in ten they’re not going to be
32:00
moving into
32:01
a you know a senior living facility for
32:04
the most part but a lot of them
32:06
will move into mobile home parks because
32:08
some of them
32:10
have equity built up in their home and
32:13
they’re willing to
32:14
trade that equity for a mobile home park
32:17
lifestyle as a result mobile home parks
32:20
are booming
32:21
you know with seniors moving in there
32:24
and also there’s an affordable housing
32:26
crisis
32:27
in general as we all know yeah yeah
32:30
that’s a very good point right so
32:33
when you look at really dig in into the
32:36
demographics
32:37
right at the ammo’s parcel level
32:40
obviously sometimes it’s available
32:42
sometimes not
32:43
but it’s really interesting to see when
32:45
you look at
32:47
at uh at cities and towns
32:50
and you circling into that mobile home
32:54
park
32:54
how the the age bracket really changes
32:57
right and
32:58
that definitely supports that uh that uh
33:01
you have a lot of retirees that that
33:04
move to mobile home parks because that’s
33:07
one of the affordable ways to to uh
33:10
to do an independent living without
33:12
still staying in your home
33:14
yeah yeah it’s really true yep yeah
33:18
very good uh so uh paul thank you very
33:21
much for for sharing your your insight
33:25
so how obviously it’s important that uh
33:28
our listeners can reach you i assume
33:31
that you are not looking for
33:33
more operators i’m pretty sure that you
33:36
know everyone out there who who you
33:38
would trust
33:39
but you for individuals that also want
33:42
to invest with
33:44
uh with you how how would they be able
33:47
to to reach you
33:50
yeah we’re always evaluating more
33:52
operators and we do get some of those
33:54
referred by
33:55
friends um in fact a friend of one of
33:58
our investors named anton
34:00
uh referred us our best operator years
34:02
to go
34:03
and so um we uh
34:06
but we generally yeah we’re generally
34:08
connecting with investors these days and
34:11
so people can reach out to me at my
34:13
company
34:14
wellingscapital.com that’s
34:17
w-e-l-l-i-n-g-s
34:19
c a p i t a l wellingscapital.com
34:23
and we have some resources there
34:25
including a
34:26
special report which is an ebook on
34:29
getting involved in mobile home park
34:31
investing
34:32
another one on self storage and then
34:34
another
34:35
course on commercial real estate
34:37
investing
34:38
for beginners yeah that’s uh that’s
34:41
great always
34:42
always very valuable to provide free
34:45
advice right for
34:46
for investors uh rather than just uh
34:50
asking for the money right uh i think
34:52
what is also important to to mention
34:54
is both paul and ivy are uh in
34:58
the real estate guys resource network oh
35:01
yeah
35:02
uh the real estate guys uh
35:06
are well known right so they are
35:08
probably the ultimate podcaster even
35:10
though it’s called the real estate show
35:12
they have started out earlier than
35:14
anyone else and it’s
35:16
they are very pecky whom they want to
35:19
have in the resource network
35:21
as their trusted advisors for for the
35:23
listeners
35:24
so uh paul is also uh one of uh
35:28
the few in in in that uh in that group
35:31
together with me so i’m proud to have
35:33
you uh
35:34
as a as a as a co uh
35:37
resource uh person in in in that group
35:40
and i think that
35:41
solely also for for our listeners it’s
35:44
it’s important to to highlight right
35:46
that uh
35:47
when you have others that have looked
35:49
into into your background that they
35:52
that you’re comfortable with you so
35:54
that’s also when it comes to the due
35:55
diligence that you have mentioned is so
35:58
important when you do your due diligence
36:01
of operators
36:03
it’s equally important when someone
36:04
wants to invest with
36:06
with you or anyone else that they do a
36:08
proper due diligence
36:10
and i think uh the fact that also the
36:13
real estate guys have have waited you
36:15
and uh
36:15
are uh or supporting you is speaking
36:19
uh very very positive in in your favor
36:24
thanks anton same with you my friend and
36:26
and i’m glad to be there with you i’m
36:28
thinking about going on the uh
36:29
belize trip instead of the cruise this
36:32
year so
36:33
anyway maybe i’ll see you there yeah
36:36
very good
36:36
so uh thanks again paul it was great
36:39
having you on and uh
36:41
all all the success uh for this year and
36:45
next year in
36:46
in your investments thank you so much
36:49
anton thank you john
36:50
and thank you everybody else it was
36:52
really an honor to be with you today
36:54
thanks paul