LUR 90 Bryce Robertson | Mobile Home Parks

 

With the pandemic, a lot of homeowners have been downgrading their lifestyles. From Class A to Class C, people just needed affordable housing. The supply and demand are so huge for the mobile home park industry. This is something Bryce Robertson knew going into the real estate industry. Lisa Hylton brings him in to talk about the mobile home parks industry and why it’s so important in America. Bryce is a real estate investing entrepreneur who began his career with a negative net worth. Now, he is the founder of PropertyWorkz as well as YouTuber, podcaster, and author. Learn how Bryce lived by the idea of the freedom trinity and how that helped him start his real estate career. Join in the conversation to understand why mobile home parks were his gateway to real estate. 

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Tackling The Affordable Home Crisis Thru Mobile Home Parks With Bryce Robertson 

I am super excited to have you on the show, Bryce Robertson. He is an Aussie-born real estate investing entrepreneur. He’s your Real Estate Mate, number one international bestselling author, world traveler and adventurer. Bryce began his investing journey with a negative net worth, unseasoned credit and a mere $2,000 in the bank. Having raised millions of dollars and accumulation of success in mobile home park investing, Bryce lives the freedom trinity of financial, time and location freedom. He’s also the host of the YouTube channel and video podcast Freedom Hack Radio, co-author of 10,000 Miles to the American Dream and writes weekly articles for BiggerPockets, and has a number one top-selling mobile home park investing and capital raising home study courses. Welcome to the show, Bryce. I’m happy to have you on. 

Thank you, Lisa. It’s great to be here. 

To get started, what do you and your family like to do for fun? 

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We love nature so we love hiking. We’ve got ourselves a little pup. We love taking our little pup out in nature. We love adventuring, outdoor adventure, athletics, sports, travel, all the goodness that life brings. 

That leads perfectly into this show. We are going to explore mobile home parks, primarily because I haven’t had a ton of people on my show to talk about it. I’m pretty sure my readers, including myself, are always intrigued about learning about mobile home park investing and the ins and outs of it. I also want to touch a little bit about the freedom trinity, what it’s all about and why it spoke to you, and why you chose to design your life, influenced by that. Let’s kick things off here. Can you talk a little bit about the freedom trinity to get started? I introduced it as financial, time and location freedom, but when did you seriously believe that it was possible for you and started to put that, go after it and make it possible for your life? 

When I started, I had a negative net worth, unseasoned credit and $2,000 in the bank. Under those conditions, I ended up getting a $570,000 mobile home park under contract. I ended up learning how to raise capital. We bought family and friends in and did a joint venture. We closed on that deal about three months later, and then 2.5 years after I closed on my first deal, I had achieved financial freedom. I was able to retire from my day job. My wife and I, at that point, both retired from our day jobs. We became financially free. Most of my goals leading up to that point were financial-based. They were like financial freedom, a millionaire, all this stuff. 

Once we achieved that, we are like, “This is cool and it’s great.” That relief is gone but new possibilities were open for us. I was on the ball of this whole location, time and financial freedom. Once we achieved financial freedom, we knew the next steps were to go through a time and location freedom, and then we would be set because if we can do that way, we can do what we want, when we want, with who we want and however we want. To give you an example of how we applied this to our real life, fast forward in the early parts of 2019, I like to surf it’s my favorite sport, my wife and I said, “Let’s go down to Costa Rica for three weeks. We are going to surf. Maybe we will find some property down there while we are there.” 

We had some business ideas and everything. We went there, had fun surfing but it wasn’t the business and lifestyle opportunity we were looking for. My wife said, “Let’s go down to South America.” I found some cool tickets. We can go down to Patagonia and we will get down to South America. We stayed there for several months. We ended up going to 5 or 6 different countries, hiking in Patagonia, jungle treks in the Amazon, surfing in Brazil, fine wine and dining in Argentina. It’s a beautiful time. At the end of those months, my wife said, “Let’s go over to Europe. I found some cool tickets to Paris and you can go surfing over there in France.” 

I’m like, “Let’s go.” We did and we went for six months. We went to about another twelve countries or something there. All in all, we ended up going to twenty countries. The whole trip took six months. It was spontaneous. We did it on the fly but while that happened, we grew our businesses. I launched my book 10,000 Miles to the American DreamI brought on new investments and our business expanded. I suppose that’s a real-life example of how we would apply financially, time and location freedom in our life. At that point, I was working somewhere between 1/2 day to 2 days a week while I was traveling and the rest of the time, we are just enjoying the fruits of life. To me, that’s living a freedom lifestyle. 

Scaling back, how did this get initiated? I knew that I wanted to travel the world when I was younger so I left Australia when I was about 23. I had $6,000 in my pocket. I went over to the UK and based myself in London. I worked there for three months straight up, seven days a week, 12 to 14 hours a day. I saved up a bunch of cash, and then I went to Europe for a little while until my money ran out then I came back. I went to Africa for a while then I came back. I went to Europe and I did that cycle for three years. I went to Canada and I lived there for two years. 

I stayed up in the mountains, snowboarding, downhill mountain biking and all this, then I saved up a big chunk of cash. I ended up taking on an eighteen-month surfing and scuba diving trip and that was in Central and South America. In the last six months of that trip, that’s where I met my wife. My wife comes from California so once we came to America, we decided that we wanted to recreate that freedom lifestyle but this time so our money doesn’t run out and grows while we are doing it. 

Is that when you started in real estate investing? 

We started in a few different areas in the beginning. We knew that the three main ways to make a lot of money is owning a business. The stock market, I suppose these days you could add cryptocurrencies into that category as well, and then also real estate. In the beginning, we started to do all of it and I was spinning plates and having mediocre success everywhere then I’m like, “I know it’s real estate for me.” I had a twenty-year background in construction management. I wanted to choose real estate but which asset class and business model? I looked at all the different profits and losses. I looked at all the returns, projections, financials and all these different real estate investment models. Hand over hand, mobile home parks had the best cashflow, the most appreciated and the best tax benefits. 

Over and over again, it was mobile home parks so I chose that and completely laser-focused on one thing. As soon as I did that, the divine, the universe, God, whatever you want to call it totally tested me. I started having a multifamily apartment and single-family home deals come my way, I had to say no to all of it. I was being tested. “Do you want to laser focus on this thing?” As soon as I said no to a few other things, I had massive success in the mobile home park space and it hasn’t stopped since. 

I can feel the importance of focus and intentionality in terms of going after what you truly want to go after. This lays up perfectly to move right into mobile home parks. A lot of my readers are not familiar with the mobile home park. For many of them, when they think about investing, mobile home parks aren’t top on their list. You have rattled off tax benefits. Can you talk about why investors need to think about investing in mobile home parks? 

LUR 90 Bryce Robertson | Mobile Home Parks

Mobile Home Parks: Once you achieved financial freedom, your next step is to get time and location freedom.

 

That’s a good place to go. There are a lot of different ways to answer that question and I could give you a long answer but the most direct and powerful reason that we invest in mobile home parks is because of the supply and demand. It’s in favor of mobile home park owners. This is why. This data came out for extremely low-income households, there are 10.9 million extremely low-income households in America. There are only 7.3 million extremely low household rental units available for those 10.9 million people. There are 3.6 million households that do not have housing even available to them in America at the price point that they need it at extremely low housing. Above that, there’s very low income and it scales up. 

There are problems in all of these areas. Depending on where you get your facts, it varies but anywhere between 20% to 30% of Americans require affordable housing, where the housing costs $700 a month or less. Mobile home parks are by far the number one contributor to solving that problem but alone, there is not a chance on this planet that we can solve that problem. There are only 44,000 mobile home parks in the entire of America, yet there are arguably 20% or more of Americans that need affordable housing below $700 a month. Now, are we seeing this in real life? Our investments perform well during good economical times and then they perform even better in down economical times because you’ve got to think about it. 

Even with the things that have happened, lockdowns, the pandemic and COVID, people have started to downgrade already. People have gone from the A-class apartment down to a B-class apartment, B-class down to C-class. C-class, probably into a mobile home park then if you are not in a mobile home park and you downgrade from there, you are probably sleeping in your car or the street because there’s not that much cheaper accommodation. Now, we’ve got waiting lists. Our shortest waiting list is fifteen people of pre-qualified tenants ready to move in. 

We can’t buy homes and fill lots quickly enough to keep up with the demand. There’s an insane demand for affordable housing in America now. I honestly believe it’s America’s largest real estate problem. It’s monumental and hardly anybody is talking about it but even if mobile home parks attempt to solve the problem, we can’t do it alone but while we are in these circumstances, nothing can compare. There’s so much demand for affordable housing and that’s the markets that we buy in. 

Diving deeper into that, can you talk about some of the key assumptions when buying a mobile home park? 

I will go through our criteria. We want to see at least 30,000 people or more in the immediate market. We want to see 100,000 people or more in the Metropolitan statistical area. We do that for two reasons. Number one, we need enough tenant base to pull from to fill vacancies. Number two, we need enough contractors to pull from so we’ve got a selection, we are not backed into the corner. As far as park size goes, I suppose the smallest we buy is 40 spaces where we are not limited on the high end but our sweet spot is probably somewhere between 75 and 300 spaces. We prefer to have no utility systems at all owned by the park. 

If our utility system is owned by the park, then some of them were more okay with others. We don’t mind water wells and septic systems. We are okay with a lifting station, which pushes poop uphill to get it over the other side. We would maybe take on an electrical system but we would have to have a discount on the purchase price for taking on those utilities. Most of the other utility systems, we are not interested in because they are too risky. There are two types of homeownership in mobile home parks. There’s a tenant-owned home where the tenant owns the home. They are responsible for the repairs. They pay lot rent to the park owner and then if everybody in the park is a tenant-owned home, were essentially a glorified parking lot. The mobile home parks are responsible to make sure that there’s water and sewer is going to and from the house to make sure that the grounds are clean. We are a glorified parking lot, we just collect rents. 

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The other type of homeownership is called a park-owned home. That’s when the tenant doesn’t own the home and they are paying rent. They are paying lot-rent to us plus they are paying home rents on top of that. In that scenario, the tenant is not responsible for the repairs, the park is because we own the home. You can imagine if you have a tenant-owned home and a park-owned home, at tenant-owned homes they are in better shape. They get looked after better because they are responsible. 

We like to see 10% or less of park-owned homes in our community. We also like to see 10% or fewer of RVs in our community and we’ve got significantly less than that. We’ve got 2 RVs in 1 of our communities and that’s it. The two transient, they come in and out. There are a lot of embezzlement that can happen. The manager can say, “Those two RVs got there yesterday,” but they have been there for a week and have been collecting cash from them. They can also run in over the utilities and stuff like that so we are not big fans of RVs. That’s pretty much like the main criteria that we are looking for in a mobile home park. 

One other thing to know is in the apartment space, there are the value-add plays, the core assets or complete development of the multifamily asset in the mobile home park space. What would you say that’s equivalent to? How would an investor look at it from the point of view of the strategy per se in terms of the business plan? 

There are a lot of different strategies. There’s one way you can wholesale or assign so there’s that. There’s an extremely short-term flip, which would be up to six months. Maybe you buy it, raise the rents and sell it on the back end. There’s a short-term flip, which should be up to two years, do some improvements, improve the financials and sell it. There’s a longer-term one like a medium one, which would probably be maybe 5 to 7 years. There’s ten years and above. What we are doing, essentially the business model that we have and not every operator is the same as us but we essentially fix and flip mobile homes. It takes a longer time to do it, where we are increasing the occupancy, we are billing back utilities. 

We are doing everything we can in our hold period to drive up that net operating income and provide the biggest return we can to our investors. Our overall goal is to double the value of that property within a short time, like 3 to 7 years depending on what market and how much needs to be done. We are essentially fixing and flipping but the reason we need extra time is that we also need to be able to provide two years of good financials once we have improved it to put us in the best position to sell. Most of our holds now in the market are somewhere between 5 to 7 year holds. 

What would you say is the key risk in the mobile home park space? What are the ways, in which you as an operator seek to mitigate that risk? 

The biggest risks are one, how to evaluate a mobile home park. Most parks that are listed now are listed for double what they are worth. A lot of buyers are paying that price because they don’t know what they are doing and that comes down to not understanding how to correctly evaluate a mobile home park. They might know how to evaluate multifamily apartments and self-storage but mobile home parks are a different animal. How do people get over that? Take my course on my A to Z of MHP’s mobile home park investing course. We dig into that deeply. I’m not trying to seed there. Literally, that’s how to learn. I also write articles about that on BiggerPockets and I believe that there’s an article specifically on evaluation that people can check out for free too. 

Another thing is utilities. People not understanding the correct risks of each utility system and that not compensating for that in the purchase price, would be another risk. Another risk is buying in the wrong markets. I told you some of our market criteria. You can have the best business plan in the world but if your market can’t support that business plan, then you are buying the wrong property. Not every market is going to work, needs affordable housing, and has demand for people to buy these homes at the prices we need to sell them up. That’s the main thing, evaluation and utilities totally by far the main thing that trips people up. That can cost you hundreds of thousands, if not millions of dollars so it’s important stuff. 

A couple more questions here to pivot off of mobile home parks a bit. I know that you are passionate about the economy. Why are you so passionate in terms of researching the economy? 

LUR 90 Bryce Robertson | Mobile Home Parks

Mobile Home Parks: Supply and demand are in favor of mobile home park owners.

 

In my opinion, if you are a serious investor, you have to. Our economical environment is changing so quickly. It’s wild. Also, when I study the economy, I can’t say that I can predict the future but I know what the highest probability is that things are going to happen in the future. The only question now is I don’t know exactly when they are going to happen but I research. After all, I need to stay ahead of the game because I know that there are historical ups, downs, up trends in real estate, commodities and every single asset class there is. We must stay ahead of the game so we can predict where interest rates are going. 

What’s cash is going to be like in years? Are we experiencing hyperinflation in the coming years? If we are, how can we like set ourselves up to protect ourselves against that? Is there going to be a large economical downturn coming up soon? In my belief, yes, and then how are we going to protect ourselves against that? How are we going to protect ourselves? How are we going to protect our investors? How are we going to best position ourselves to weather the storm? To explain it in a metaphor, I know that there’s a storm coming so I’m checking the weather to find out because there will be a time where we may need to board up our windows or there might be a time where we need to temporarily drive to the state beside us and then let the storm blow over and come back. 

I know there are a lot of people out there going, “Let’s cross our fingers and see what happens.” By the time the ball drops, it’s too late. We want to stay ahead of the game and we believe we are doing a pretty good job at that. I know that it’s probably not the most exciting topic and not the most exciting to research. I like to condense the information that I’ve got and then pass it on to people. Hopefully, they can make better choices because I know that not everybody is going to go out there and dedicate the time to researching it. 

It’s so important, especially when investing in either real estate stocks, whatever. It’s super important to be on top of that. To wrap things up, you have a book called the 10,000 Miles to the American Dream. I talked about it a little bit in introducing you. Can you talk a little bit about why you decided to write that book? 

It happened by accident, one of my mates, Reed Goossens a co-author of the book, I was introduced to him because he’s another Australian in the real estate scene. He introduced me to this group of Aussie guys that were all real estate investors, real financially free through our own different asset classes in real estate. We also happened to come from Australia. We ended up meeting up down in San Diego to play some golf, have some fun and just connect. We started jumping on mastermind calls and solving problems. We even started doing deals together but when we are in San Diego, we realized that we had this compelling. We were all excited about the fact that you can create financial freedom in America so easily through real estate. 

Tenant-owned homes are just glorified parking lots. Click To Tweet

We all did it in different ways. We’ve got to the same point but we had done it in different ways. Many Americans don’t know that the land that they are standing on is so easy to do business with compared to other countries. What we have done here, you can’t do that in Australia, Canada, UK and Europe. Trust me. I have lived there. I have been there. It’s a different environment. Here is an environment like nowhere else in the world. Part of it is like waking up Americans and saying, “This is a massive opportunity. It’s standing right beneath you. You can bend down, grab it and pick it up. It’s very easy for you to achieve.” The second part is, as we share our story of how we achieved it, which has got impacted with learning lessons and a lot more on real estate in there as well. 

I love that because the reality is this is a land of great opportunity and a lot of people have come here, as you have said in your story, $2,000 unseasoned credit, negative net worth. The last question on that would be from that place raising capital and how impactful that has been in building your business and your career. You even have a course on raising capital. Can you talk about how raising capital has impacted you and why you felt so compelled to even pay it forward to teach others about it? 

I didn’t know about it and I knew a little bit about it before I had that park under contract. It was a major shock to me in the beginning when I went out to raise capital. It was more challenging than I thought because I wasn’t prepared. I didn’t take the right steps. That’s the reason I wanted to teach people is that there’s not much education on it out there and you are learning from someone who had to learn from scratch. We use syndication or capital raising in all of our mobile home parks. We have been doing that since day one so that’s a part of our business model. When I saw the first deal that was possible and how that was possible through raising capital, I felt like I was 10-foot tall and I was unstoppable. 

I also realized that I had a whole bunch of value to be able to bring investors in on our deals, and then they can create financial freedom in their future through investing in our deals because maybe they don’t have the time, the resources or the experience to be able to pull these deals together so it’s a win-win scenario. I see in the beginning, I thought I needed their money and I didn’t know that I had that much value to bring to the table. I wasn’t presenting myself that well in the beginning. It became evident that I’ve got a lot of value I’m bringing to the table and it’s a relationship that works well because when we bring investors capital in, we can do more deals. 

We can go out and we can do ten times more deals. That means that we can provide returns to investors then we can go out and we can get nine more deals that we can bring more returns back to investors. It’s like this cycle where investors help us grow our business, get better, expand our wealth and our freedom, and at the same time, we are doing the same thing for them. I’m passionate about it. I love it. It’s an amazing tool. It’s beneficial. You need to be smart when you are doing it when you are an operator and raising capital. 

You also need to be smart when you are a passive investor and choosing an operator, which on the latter is at least 50% of your decision-making needs to be on the operator, if not probably 80%. Whereas a lot of people just focus on the asset themselves. If you have a bad operator, they are going to take a good asset and run it to the ground. If you have an amazing operator, they can take a total dud and can make it a top performer. You must have the running vehicle to get there but more importantly, the person you invest with is the most important part. 

Two things I wanted to talk about is, first, what is a key way to prepare to raise? What is the key thing that people need to make sure that they are doing in preparation to raise? 

The main thing is people need to know about it. If you are going to be out there and you are raising capital, don’t wait until you need it to tell people about it. That’s what I did. I was like, “I’ve got a mobile home park and I need money in six weeks.” People are like, “You are in mobile home parks now? I thought you were in construction.” You have to let people know. If you are considering raising capital, I would be talking to everybody about it. People in the grocery line, your next-door neighbor, all your family and friends, everybody, I would be mentioning that you are entering the real estate world or you’ve got these exciting investments that you are working on. You are going to be bringing investments to the table soon and have these opportunities for investors. Maybe you can walk them through what some of those looks like. Don’t wait until you need it because trust me, it’s not there when you need it if you haven’t prepared for it. 

Lastly, you talked about betting on the operator. Talk about the key thing that passive investors need to look at when assessing a mobile home park operator? 

The key thing is trust. I know it’s hard to quantify trust because it’s a feeling that we have, we either have it or we don’t. There are a lot of different ways that our operator can display trust. Trust in authenticity like when you are speaking to somebody, you can tell, whether they are being transparent. Transparency is huge. If an operator is transparent, they are sharing their numbers and reporting on everything all the time, that’s perfect. We tell investors the good, the bad, the ugly and we also tell them how we are going to solve those problems but we are not the ones that are saying, “Everything is good every single month.” It’s like, “We had some stuff happened. Here’s how we are going to solve it.” You want to be transparent if they are withholding information. If they only want to share a little bit with you, run the other way. 

Another thing is if they are not taking the correct legal path so they have to have a PPM subscription agreement, Private Placement Memorandum, all that stuff. Are they conservative in their underwriting? That’s another one. Are they aggressive and it’s going to be hard for them to pull their business plan off? The last thing is experience. Do you feel confident that with the experience that they and their team have, they would be able to pull off the investment that you are looking to invest in? 

Such a great episode. Thank you so much for coming on. This then leads me to my Level Up questions that I ask all my guests. The first one is, what are you grateful for in your life right now? 

This could go on forever. I’m grateful for so much. I’m grateful for my wife, my puppy, my friends, our investors, all the people that we work with, where I live, the life I get to live, how I get to spend my time and my health. I will probably burn your show talking about gratitude. That’s something that I have forced myself to focus on and spend time focusing on every day so I’m clear on it. 

What has attributed to your success and continuous growth? 

Massive action is one component. Consistent self-development is another huge component and the other one is doing it and taking the next step. Not knowing exactly how I’m going to piece it all together but knowing, “If I do this next step and I get that done, then we will get to the next step.” That plays the main thing. 

Lastly, what do you now know that you wish you knew at the beginning of your journey? 

LUR 90 Bryce Robertson | Mobile Home Parks

Mobile Home Parks: So many Americans don’t know how easy it is to get financial freedom. The land that they’re standing on is so easy to do business with compared to other countries.

 

Relationships would probably be the top topic there. I could have cultivated stronger and powerful relationships from the beginning. If I had have understood that that’s what this game is all about, then I would have been even further than where I am now. I know that where I am now is because of relationships and I have cultivated some very special ones. I hope that I can improve making even better relationships moving forward. 

Thank you so much. If my readers want to learn more about you, where’s the best place they can go? 

You can go to our website PropertyWorkzUSA.com. You can also email me Bryce@PropertyWorkzUSA.com. That’s the best place to check us out or come over to Freedom Hack Radio as well over on YouTube. 

Thank you so much, Bryce. It’s a pleasure. 

Thanks, Lisa. Thanks for having me on. 

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About Bryce Robertson

LUR 90 Bryce Robertson | Mobile Home ParksBryce Robertson “Your Real Estate Mate” is an Aussie born real estate investing entrepreneur, #1 international bestselling author, world traveler and adventurer. Bryce began his investing career with a negative net worth, unseasoned credit, and a mere $2,000 in the bank.

Having raised millions of dollars and a culmination of success in mobile home park investing, Bryce lives the freedom trinity of; financial, time and location freedom.

Bryce is host to the YouTube channel & video podcast “Freedom Hack Radio”, co-author of “10,000 Miles to the American Dream”, he writes weekly articles for BiggerPockets and has #1 top-selling “Mobile Home Park Investing” and “Capital Raising” home study courses

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