SHOW NOTES

Welcome back to The Passive Mobile Home Park Investing Podcast, hosted by Andrew Keel.
In this episode, Andrew Keel sits down with Andrew Cramer, Founder of Bridgeview Asset Management, to discuss what it really takes to succeed in mobile home park investing.

Since 2011, Andrew Cramer has acquired and managed over 3,000 mobile home park units, building a portfolio valued at more than $600 million. He shares his unique journey from chemistry and hedge funds to mobile home park investor, offering insights into both the operational and investor sides of the business.

Andrew Keel and Andrew Cramer dive into the lessons learned from building a high-performing mobile home park team, executing a game-changing mobile home park deal that reshaped his strategy, and navigating the brokerage community. They also cover the importance of understanding the towns and people behind each mobile home park, breaking common industry stigmas, and strategies for scaling a mobile home park investment portfolio successfully.

Topics covered in this episode:

• Andrew Cramer’s journey from chemistry and hedge funds to mobile home park investing
• Learning the mobile home park business through trial and error
• Building an investor-focused mobile home park team and processes
• Executing a transformative mobile home park acquisition
• Navigating the mobile home park brokerage community
• Why understanding the town and people behind each mobile home park matters
• Common mobile home park investing myths
  

Andrew Cramer shares key lessons from scaling thousands of mobile home park units, building a strong team, and evaluating communities—insights every investor and operator can use.

About Andrew Keel
Andrew Keel is the owner of Keel Team, LLC, a Top 50 Owner of Manufactured Housing Communities with over 3,250 lots under management. His team currently manages more than 50 manufactured housing communities across 15+ states.

Andrew specializes in turning around under-managed manufactured housing communities by implementing proven systems to maximize occupancy while reducing operating costs. His expertise includes:

• Bringing in mobile homes to fill vacant lots.
• Implementing utility bill-back programs.
• Improving overall management and operating efficiencies in mobile home parks.
  

These strategies can significantly boost both asset value and net operating income. Learn more at keelteam.com

Check out Andrew’s FREE e-book: “The Top 20 Things You Need to Know Before You Start Investing in MHPs” — available on our website: https://keelteam.com/top-20-things-learned-from-mobile-home-park-investing/

Andrew has been featured on some of the top podcasts in the manufactured housing space. Listen to his most recent interviews here: keelteam.com/podcast-links.

To successfully implement his management strategy, Andrew’s team often relocates on-site during the first several months of ownership. Find out more about Andrew’s story at andrewkeel.com

Support the Show
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Want to see mobile home park projects in progress? Follow us on Instagram: @passivemhpinvesting for photos and videos from our latest acquisitions.

Talking Points:

00:21 – Welcome to The Passive Mobile Home Park Investing Podcast

01:20 – From chemistry to real estate: Andrew Cramer’s journey to mobile home parks

08:35 – Education by trial and error

11:45 – Lessons learned from working in hedge funds

17:35 – Andrew Cramer’s current mobile home park team and investment processes

25:20 – The mobile home park brokerage community

30:15 – Andrew Cramer’s game-changing mobile home park deal

43:49 – Lightning round: Montana, New York, myths, and rent control

49:00 – Why understanding the town and people behind each park matters

52:40 – How to connect with Andrew Cramer

53:45 – Conclusion

SUBSCRIBE TO PASSIVE MOBILE HOME PARK INVESTING PODCAST YOUTUBE CHANNEL https://www.youtube.com/channel/UCy9uI3KGQmFgABsr9lUtRTQ

Links & Mentions from This Episode:

Bridgeview Asset Management: https://www.bridgeviewassetmanagement.com/

Andrew Cramer on LinkedIn: https://www.linkedin.com/in/andrew-cramer-43b5b513a/

Keel Team’s official website: https://www.keelteam.com/ 

Andrew Keel’s official website: https://www.andrewkeel.com/  

Andrew Keel LinkedIn: https://www.linkedin.com/in/andrewkeel 

Andrew Keel Facebook page: https://www.facebook.com/PassiveMHPinvestingPodcast

Andrew Keel Instagram page: https://www.instagram.com/passivemhpinvesting/

Twitter: @MHPinvestors

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TRANSCRIPT

Keel: Welcome to the Passive Mobile Home Park Investing podcast. I’m your host, Andrew Keel. Today, I’m excited to welcome Andrew Cramer, principal at Bridgeview Asset Management. Since 2011, Andrew has led the acquisition and management of over 3000 mobile home units, building a portfolio valued at more than $600 million. With degrees from Cornell and UC Berkeley, he brings a unique blend of science, finance, and operational expertise to the mobile home park sector. Andrew, welcome to the show.

Cramer: Thanks, man. Glad to be here. Thanks for having me.

Keel: You bet, man. Like we were talking about before you started, I have to say you got probably the best first name as far as first names go.

Cramer: Likewise. 

Keel: That’s awesome, man. Would you mind just starting out by sharing a little about your story and how in the world you ended up in manufactured housing communities?

Cramer: I think it’s scary sometimes. I realize that I’ve been doing this a little while now and 14 years is like, oh man, I’m one of the old guys now. It’s depressing. 

I started my career—I guess if you want to call it that—I originally went to school for chemistry (of all things) and then was outclassed from an intelligence standpoint at UC Berkeley, which is a phenomenal chemistry program where I was by far the dumbest guy there. So was really feeling out of place. I got hooked into a mortgage REIT back in like 2007. From there, jumped to a different REIT, so got exposure to real estate, just almost by happenstance. 

And then during the financial crisis, got laid off from that job, then worked my way into a few entrepreneurial things. Because of my wife’s career, we ended up in Portland, Oregon. 

Originally, I was thinking I was going to be just a developer and I was going to build apartments and things like that. We all learned this in real estate. It’s an interesting insular tribal business in many ways. 

When you show up from the East Coast as a guy who’s like, hey, everybody, I’m here now, that’s not very well received. Particularly, it’s like a guy in his 20s who really didn’t know anything. I was laughed out of a lot of rooms and was able to borrow 10% money. The only thing that worked, even back in the crisis, you could buy apartments in Portland at seven and eight caps, which I know sounds insane today. But back then it was like, who would ever do that? 

So the only thing I could buy was a mobile home park. And that mobile home park I still own today. It was a little 39-unit park. I bought it at a 14 cap. It could pay my 10% equity. 

It was one of those things where, and I think that’s one of the interesting things about mobile home parks in general, is that even not that long ago—that was 13 years ago—that stuff was there. They were these nasty little, oh my God, you want to do that? These very funny properties, in many ways that stigma exists. 

It’s funny, you and I are here talking, we’re in the industry. We understand RV parks and mobile home parks and single lives and park models, but for the most part, we ourselves get very insular too (I think). We realize that for the vast majority of people, that initial stigma that we all had the first park we walked into is still very prevalent. 

My experience was getting in there and then every day I was there. I didn’t know what else to do, so I manage it myself. We had to bring in seven units and I had no money, So I was like, well, I can’t afford these new units. Everything was on the fly. So I found a used unit, and then I said, how do I move this? So I called the tow truck guy and the tow truck, I said, I can’t move it. 

I put everything all together very slowly and painfully, and it’s interesting how the way you start is often how you keep doing things. Because of my experience, I didn’t parachute down from a big private equity fund and have a bunch of money behind me. I always serve on the ground. That’s how things got built up. 

We did that park, refinanced it, bought another park up at […], still own that one, too actually. And then from there hooked in with a hedge fund, did about seven parks with them. Those were round trips where you sold them. Really regretted selling (I think) that for many reasons, not the least of which was having to see those parks do an arc of getting better and then get worse again. 

That’s really hard for me to see, particularly in a family park where you go into a property and, I remember one in North Portland be bought where there were 1100 911 calls to this park the year before I bought it. So it was really rough. 

But then and I’ve got some pictures posted all in various places that everyone wants to check it out. But it just really looked like a dump in the front. We cleared all that out, brought in some nice new park models. Some tremendous, rewarding things where you see, you drive through a park for the first few months and there’s no one outside, and then 6–8 months later when you put a playground and you see kids on the playground, that’s really cool to see. 

That to me is tremendously rewarding when you’re able to provide something, not just you can start to build out a community just by doing these things that no one really wants to do, like a burned out RV. You can’t make a call. You can’t call a guy who’s going to go take care of that. You have to figure out, I better go rent a mini excavator and I better go get a dumpster. 

It’s one of the funny things I find about the industry in general is that there’s no specialist. You have to grab guys from various places and then they’ll do the work. It’s always very patchwork in my mind. I know that’s changing now a little bit, but my experience is always that. 

Your average demo guy is not going to set foot in a mobile home park. If you have a single wide mobile home that you want to do a rehab on, you call 10 GCs. None of them are going to do a mobile home. They just don’t want to do it for a variety of reasons. You’re like, okay, well I guess I’d better find some guys. That was how I’ve started a construction company for that exact purpose because I just couldn’t find anyone to do it.

About seven or eight years, I had my own construction company. Now we’ve backed off a little bit to where we handle project management. I think that’s largely a function of the industry coming along a little bit, but also us just really understanding the things we need to keep in house and getting really, really good at as small a number of things as you can. 

We’ve always really been on the value-add side of things, transitioned through working with some (I call them) ultra high net worth family office types who were in dedicated partnerships, to now we’re trying to transition into a more traditional syndicated model. 

So I think it’s been an interesting transition working with different partners, and then really figuring out the things that I really enjoy doing, the things that the company that Bridgeview has gotten really good at doing, and then figuring the place we want to be in. 

We have very, very specifically chosen the greater Pacific Northwest, and we really focus on these types of value-add deals because like I said before, I got used to that and if I found that there’s a little bit of a niche in high vacancy utility problems, the non-institutional grade properties, we feel we can be very impactful both from an investment standpoint but also in building up these properties and making a difference for the tenants as well. That’s the box we try and stay in.

Keel: I love it. Thank you for that synopsis there. I have several questions. The first park, how’d you get educated? Were you just like, hey, I’m just going to figure this out? What were the utility setups? Did you go to the bootcamp or do something to get updated? Were you just like, hey, I’m going to figure this out?

Cramer: I never said that. I said, that’s how it worked out. I wish I had done more of the educational steps. It was funny, I remember the day before closing, I drove through the park because I just thought that’s what you do. I looked through and I counted the units, and there were five units gone. 

I came to realize, I called the broker that the seller of the property, she owned a lot of parks in the area; she had yanked out five units literally days before. It’s never happened to me since—35 parks—but in the moment, I was like, oh my God. This is how this industry. People are just […]. I didn’t know. I just guess this is how […] technically legal. She got these tenants to move to another one of her parks. I’m sure she paid to move the units, whatever. 

Anyway, I’ll never forget that. Actually, she’s a character. I don’t have a grudge against her for that, believe it or not. But I think I should. It’s funny. I didn’t have any background whatsoever. There wer some advantages and disadvantages. The the advantage was I didn’t know what I was getting into. This park had a huge amount of tenant issues. We ended up evicting six people within the first six months.

But I learned I got to do all of the steps. I did the filings. I did the seven two-hour notices. I did the first appearances because I didn’t have any money. I couldn’t hire an attorney. 

Same thing with tearing out a unit. I hired six guys and paid them $15 an hour or whatever it was, and was there. If I’d had more real estate experience, I think I would’ve said wait a minute, where’s the licensed bonded guy who’s going to do all this stuff for me? He doesn’t exist? Oh my God. I didn’t have a background in apartments or single family homes where I would’ve had that expectation. I think in many ways, the lack of education helped me.

It was 40 units. I could get my arms around it. Not necessarily if it had been 200, I think I would’ve never made it work. The same thing with landlord-tenant stuff. I’m sure coming from more landlord-friendly places, the Pacific Northwest seems like a nightmare from a regulatory standpoint. And it is, but it’s all I know. Had I bought a bunch of parks in North Carolina or Texas, I’m sure I wouldn’t have known how to handle it, but I’m just used to it. 

I think being naive, having no experience, and just building up a knowledge base within this very confined environment, in many ways serve to help me because now we can very conclusively say, hey, we’re specialists in this area. We know all the little nuances, subtleties, and how to go through. Even just the permitting nightmare of bringing in a home in most places in the Northwest compared to other places, it’s nuts. But again, it’s all we’ve ever done, so—

Keel: You’re used to it. 

Cramer: Yeah. 

Keel: Tell me real quick. I’m very curious about, you said you did seven parks with a hedge fund. Maybe tell me about that, because I’ve been approached by PE firms and the like. They’re like, hey, we’re going to bring all this money. 

I’ve always shied away from them for some of the reasons you mentioned, like there’s always a sale date. You’re going to have to sell these assets and close out the fund or whatever. Maybe just tell me about how that experience was working with institutional capital, and the positives and minuses, if you don’t mind. 

Cramer: I think overall it was a great experience. I think those guys were extremely helpful. They were very patient and gave me a window into, as you said, the institutional world and the expectations of an institutional investor. 

I think there are just some realities that are complicated. As you said there’s usually a five max, sometimes seven-year turnaround. At least with me, I was a very, very small part of a much larger fund. So if there’re closing out a fund and your little park is one of the last assets, you’re not going to get another year to really crank it because if it’s a $4 million park today and a $4.5 million park tomorrow, it doesn’t move the needle.

I think you will get marginalized sometimes. Structurally, it was difficult. I was very lucky because the people who I was working with were tremendously supportive, really understood what I was trying to do, and were very accommodating. They thought it was cool that we could like, all right, we need a construction company. Oh, fine, I’ll start one. Let’s go do this here. They were extremely flexible.

Keel: Support you in that. I’ve heard stories where hedge funds are the opposite. They’re less flexible. […] you’re going to follow my rules. That’s cool that you had a good experience. Did you know someone with the hedge fund beforehand and how you got introduced to them?

Cramer: Definitely, so that was really helpful. I completely agree with you. It could have been way worse if it had just been like I’m handed off to some vice-president who calls me nine times a week, and you need to give a presentation to people you’ve never met and get ranked over. 

It could have been way worse. That’s why I don’t necessarily think, for me personally, going back into talking to going to KKR or Invesco or one of these big giant funds. If under the right circumstances it might work, great. The right circumstances would be knowing the people, just like anything. It doesn’t matter if it’s a limited partner and you’ve got a whole bunch of documents that really stipulates control, or if it’s a giant fund.

I’ve had a lot of experiences with a lot of different investors, and the structure has been much less impactful than the people. An LP who’s behind three documents that says you the operator has to do whatever you want, you can do nothing, that person can still be a nightmare. Versus I’ve had some literal complete majority partner is this guy, and I’m the minority partner. From a legal standpoint, they can make all the decisions. 

Those have worked great. I had one exactly like that that I worked with a family for probably five or six years. From my ability to control my destiny, it was extremely disadvantageous because they controlled everything. But in the end, I think it worked extremely well. 

We got to accomplish goals that were in tandem with one another, if that makes sense. Then when we started to diverge, we both understood that, and were able to separate these affairs in a very fair and professional way, I guess. Had that been a person, that could have gone way worse for me. The structure was not great looking back on it, but I think you got—

Keel: […] record right. You built a track record.

Cramer: That’s exactly right. 

Keel: Just like my first investor, by far got the best terms. He didn’t even let me take a property management fee, and that was all my promotion. It was very advantageous, but it was a person and he took a huge risk on me, and he deserves every bit of the good returns he got because of that. It worked out, and we still own those parks to this day. My first park, I still own it. There’s something to be said about just good people and having a common goal and working together.

Cramer: It’s hard because sometimes you learn those lessons in reverse. I don’t know about you, but there were moments where it’s like, ah, I shouldn’t. This is totally unfair. But as you said, you only know yourself in the moment, and when you think you know what you’re doing, you think you deserve this stuff. 

But I look back at 10 years ago, no one had any reason to think I was capable of doing all this stuff. and I would like to think that everybody feels good about those transactions. But certainly when you’re looking at it with the cards on the table, I feel like everybody ended up doing really well. I think that’s important. 

Keel: Tell us about your operations. Tell us about your property management company. Scaling up to 3000 units is no easy task. It’s very, very difficult. There are all these levels where things break and then you have to rebuild it. Tell us about your challenges and what your team looks like today.

Cramer: We ramped up over the course of about six years, we went from managing 5 parks to managing 35 parks. During that time, what we always had was I’m very development-heavy, so I always had a really good team of I would call them project managers. 

When we walk into a new property, we say, all right, this utility upgrade, we have to replace the waterline here, we’ve got to add six used units here. We’re going to put a trash compactor here, we’ve got to do electric upgrade. To compartmentalize that work, and then find the right people to do it. 

Again, if it was an apartment building, I could get three bids from three very qualified GCs who do that stuff all the time. We have to step in a little bit more to that GC developer role where you’re saying, all right, you got to bid out the electric, you got to bid out the plumbing. Sometimes you got to get all the way down to renting the equipment and getting a equipment operator to be on the mini exit your direction for two days. That’s again going back to how I started things. 

It’s been interesting the last couple of years because we were way, way, way scaled up to that big several thousand unit scale. Then we scaled back down because with some of our partners,, instead of owning a minority percentage of 35 parks, we now own a majority percentage of 20 parks. Actually. we had closer to 40 at one point.

Anyway, our management infrastructure is really built out for a much bigger portfolio. For the last year or so, we’ve been re-tinkering and figuring out the next thing to do. Now, we’re going back out and we’re going to buy three more deals this year. We’ve probably got another four or five in Q1 and Q2 of next year. 

We’re rebuilding. We were over staffed, I guess, for a year or so, which obviously hurts from a capital and a cashflow standpoint, but ultimately, I just decided that the company, I really liked the team, and it made more sense to bring some new work in as opposed to really, really pare down and just manage the portfolio we had.

From a scaling standpoint, one thing I will say is I feel like the software systems have come a long way. I also think it’s a little scary to me sometimes because you take AppFolio, they’re being invested in very heavily. They’re adding a ton of features. As are the payroll companies. 

All of these service-providing third-parties (I think) are largely just because of cloud infrastructure and how efficient these places can suddenly be, they’re also taking a lot of investment. So that investment means they’re adding a bunch of functionality, which is really cool. But I also worry that a year or two from now, the pricing will go up. 

Also at a certain point, knowing the venture capital and the private equity world, if they can’t show a return on this, they’re just going to split. And now suddenly you’re very committed to this software system that’s not really going to work very well. So that concerns me. 

I hope it doesn’t happen. From a scalability standpoint, it’s made things tremendously efficient. The ability of even a couple of years ago when we switched from one software system to another, it took eight weeks. We had to do some manual transcription because the two systems didn’t talk to one another. 

Now all of that’s a foregone conclusion because with all these AI visual reading systems, it doesn’t matter anymore. From a high-level accounting, blocking and tackling payroll, all that stuff, there are so many third-party resources that are great. 

The hardest thing to scale and in my mind is just making sure you have people who understand the importance of execution and who understand the importance of getting things done. It’s hard to find a third-party probably in any industry who really understands that. It’s like, all right, if we’re bringing these six units in, where are they coming from? Are we going to work with multiple people? 

Another thing I’ve found is the scale’s gotten bigger is partnering, and not trying to scrape every dollar off the table for yourself is a mistake I’ve made a lot in the past where if there’s someone who wants to bring in a unit, rehab it, sell it, and I don’t make a dime and I don’t even charge them space rent, almost always that’s a great thing to do because it’s not on your plate. 

What do you end up with? A nice home in your park. That’s what you want. Don’t try and scrape the few thousand dollars every time you can, I guess. In more recent years, I’ve realized that. Sometimes you just focus on what your business goal is when you’ve bought this property or whatever your business is. Focus on the goal. 

I’ve been amazed where a few thousand dollars can oftentimes be the difference maker in what can be a really productive partnership with somebody. I have a great partnership in eastern Washington with a home dealer, believe it or not, who brings homes. I’m money out to help them get the home set up, and then when the home sells, everybody gets paid.

It works phenomenal. I don’t have to worry about it. Whereas maybe even five years ago, I would want to be like, no, no, you got to give me a commission here, or I got to make a contractor fee on my setup. Little stuff like that where it would’ve equated to, honestly probably $2500 a unit, and the amount of friction, those relatively small amounts. 

Don’t get me wrong, $2500 is a lot of money, but the friction it creates and what could otherwise be just a tremendously fruitful partnership. I’ve found that leaving some upside for other people. The other benefit of that is that most people don’t do that.

Keel: You want to bring more homes into your park versus others, right?

Cramer: Because everybody else is like, yeah, you can bring homes in, but I’m not going to pay for it, and you got to pay space rent day. So it’s really just being a little more collaborative and just getting to talk to you. I feel like there is a little bit more of that. 

I feel like we all have, I don’t want to say common enemies, but the regulatory burden is so high. There’s no point. We’re in two different geographies, but the guys who are my direct competitors, I suppose you’d call them, are much more collaborators than anything. 

Buying properties from someone who you know and trust, and who has a reputation that they care, it gets a lot easier. As opposed to just trying to fight everybody all the time. I think having a much more collaborative mentality has been really helpful in the last three or four years, versus trying to just fight, fight, fight all the time.

Keel: Let me ask you this. How are you sourcing new opportunities to invest in? Are you working with brokers? Do you try to find off-market stuff?

Cramer: I think the whole off-market deal ethos, I always find a little bit funny. Everyone’s obsessed with it in a weird way where it’s like, this is off-market. Okay, is it good? Why is it off-market? 

Keel: It would be a worse deal than you could’ve gotten on-market.

Cramer: All the time. Yes, we absolutely do. Having said that, the brokerage community at least out here, I think they’re pretty good at bringing deals. They’re pretty good at pricing them fair. They’re pretty good at setting seller expectations. 

Probably half are listed in some way. I don’t mean listed on LoopNet or something, but just a broker’s involved, let’s call it. The off-market thing is interesting because, as you just said, sometimes an off-market deal is off-market for a reason. 

We’re working right now with a property that we own some parks in the area. The sellers are in their 80s and they’re just fixated on this price. They call me about once every six months and they say they’re ready to sell. Then I make an offer and they’re pissed off, so they go away for another six months. 

The off-market thing is great and you can get some great value, but it takes a long time. You have to be established and you have to be in an area where not just having really bad reputation can really hurt you. If you have a reputation for screwing over sellers, that doesn’t help you. 

Every time I’ve had an off-market transaction, there’s always a call to someone I bought apart from. You got to be able to treat those guys and if those guys think you’re horrible to work with, a broker can manage that a little bit. But if you don’t have a broker involved, that seller is really going to be a very sensitive individual. You have to be really careful with how you’re managing yourself. 

The short answer is, I’m not one of these everything’s off-market and no one ever sees the deals I do. I think you got to be a little more particular. I got to be in— 

Keel: Pass a wide net.

Cramer: Yeah. I can’t just be in Portland or just in Seattle. Me’re mainly in the eastern side of the states right now because we’re seeing tremendous opportunities there. Then everything gets even more focused where if you’re in a town of 10,000 people, it’s really easy to get a bad reputation, particularly when you’re an out-of-town person. You really have to take the time to go out, meet the concrete guy, meet the framers, meet the electricians, just so they understand that you’re not just coming out of nowhere.

Keel: Actually, that’s good advice for any mobile home park, to […] your vendors. We bought a park and there were three plumbers in town. That was it. They all had bad relationships with the previous owner. The previous owner just used to do all the plumbing himself. 

We called these plumbers and they’re like, oh, you’re with that mobile home park? No, we don’t do work there. We had to meet them in person, build back the relationship because something happened. We never got the full story. But it’s really, really important because otherwise, you’re thousands of miles away. How are you going to get anything done?

Cramer: And then it’s not only the distance, but it’s also just the attitude and reputation. If you do have to do something, you’re going to get kicked to the bottom of their list. You’re going to get the worst pricing. 

It’s so funny that even in this hyper connected world, in the end, particularly in the subcontractor traits, relationship really matters. If they trust you and if they know that they’re going to get paid, and if they know that you’re not going to come back nine months later with some ridiculous warranty complaint, they’re going to take care of you. That’s hard to communicate with a LinkedIn profile. It’s hard to communicate with a website.

Keel: There’s a full circle moment there. Relationships matter with your vendors, they matter with your lenders, they matter with your hedge fund investors. If there’s one major point to take away from this podcast, even the small relationships matter. 

Cramer: And you can’t automate that. You can’t build a bubble around yourself that prevents that. I’ve seen where there are people who have huge amounts of capital, who are able to write a check from their own money, and for some reason, something about them is just unappealing. Or even the brokerage community who you’d think would be all over someone like that, they just won’t deal with them because they don’t want to. 

That’s something you got to be very conscious of, where even if you feel like you have the resources and you’re the guy that isn’t going to get things done if you don’t value these, if you don’t take the time as you said, to really value and build trust, build some level of network and within whatever you’re doing.

Keel: Totally. Let me ask you this, Andrew. Looking back at your career so far, what’s one deal that stands out as a game-changer and what made it so successful?

Cramer: One that really stands out to me was I bought a park, this is a funny one because I’ve owned it three separate times. Now I own 100% of it. I had one investor group I bought it with. We sold it to another investor group. Then as part of that transaction I was telling you about where we broke apart a portfolio, I ended up with this park. 

I think about it because you looked at this and it was just such a nightmare. There was just trash everywhere, utilities non-functional, failed septic system, wires hanging out of every single meter. When I look back on it, now it’s a 40-unit park, so not huge but it’s on 15 acres. It’s in a semi-rural area on your way out to Mount Hood. 

I look at what we actually had to do. We had to bring in 40-yard dumpsters to clear out that park, which is insane. Except for when you think about it, that was all in, and that was about $60,000 to do all of that. That’s a big sum of money, but in the scheme of what is now a $5 million property, not a whole lot. 

It was one of those things where I couldn’t hire a third-party to manage that for me, but I could hire three guys with three mini excavators, and the municipal waste company just kept pulling dumpsters and reset them up. 

It was not complicated. It was not expensive in the scheme of things. It was transformative as I’m sure you can imagine, going from that much trash. It took three weeks to get all that done. So the timing wasn’t significant, the expense wasn’t significant, and the complexity wasn’t significant, but it was transformative. 

When I saw that shake down, I didn’t know. We just walked in be like, okay, let’s do something. Let’s get dumpsters, let’s get mini excavators, let’s start picking up trash and putting it in the dumpster. That was my whole thinking at the start of this.

Keel: It’s not rocket science, right?

Cramer: It’s not complicated. And logistically it’s fairly simple too. I’m not invading Iraq. It’s a fairly simple three-step process, but I still take this away where the stuff that is just gross never tends to be very expensive or complicated. 

I think about this with septic systems too. I’m sure you’ve had these conversations where you have a lender says it on septic. Yes. Whoa, wait a minute. It’s like, listen. Here’s why I like it. It’s just gross, I get it. It’s raw sewage. But when you actually go in and fix those problems, they are never very complicated. 

Just like that, I always think about that in the context of the most impactful things you can do, that’s not a linear chart with complexity and expense. You can do a ton that happens quickly, isn’t very expensive, and number one adds tremendous value, but also can be transformative. 

That’s what I always think with a new project is what are the things we want to do to add value to this for our investors. It’s also the order in which we do those things. 

Another example would be like locking mailboxes. Those don’t reduce any expenses. There’s not a mail expense on your P&L, but I found that same thing. We’re doing one now at a property we just bought. It’s a 100-unit park. It’s going to cost us $30,000 to install locking mailboxes. 

But particularly for low income residents, for older residents, mail theft is so destructive beyond what we can really comprehend. Suddenly when you come in and now the mail is secure and they don’t have to worry about their sometimes medications or social security checks being stolen, it’s a huge difference. I always think about it in terms of go and do the work, go and do the hard work.

Keel: Sweat equity and just the value-add is what you’re talking about.

Cramer: Yes, but the value-add is not building a high rise or spending $100,000 a space to do some massive upgrade. I just find it very interesting when you look at the properties that are issued by the agency and institutional community. 

I often find that those properties from an investment standpoint offer by far the highest return. But they also, not that complicated. You drive by a park that’s got utilities that look bad, it’s got trash all over the place, and it’s got a burned out unit, that gets rid of 90% of the buyers because they just don’t know. It’s scary. It’s like, oh, what, what do I do here? 

Sometimes those problems that look bad, the more you are able to address those, the rewards are always threefold. You have a community that’s grateful, you have a great return for your investors, and you end up with an operationally sound project that didn’t take those dollars on those types of things are so much more valuable.

Keel: And to compare it to multifamily where—we’ve all seen it, the pitch decks—their value-add is, hey, we’re going to replace all of the faucets with aerated faucets and we’re going to spend all this money to do that, to reduce our water bill. 

They get way granular and way complex with it where it’s like, hey, we’re going to take this trailer park that’s been abused for 30 years by a mom and pop owner that we’re squeezing every penny out of it. We’re going to reinvest into it, justify the rent increases, and boom, we added the value. 

I bought self storage, and that was a whole nother avenue of creative value-add where you’re revenue managing people, you’re trying to squeeze every penny out, and it’s less black and white compared to mobile home parks. Way less black and white.

Cramer: Not to hammer this too much, but I think that whole stigma side of this, what’s really hard for me to see is people missing out on a great opportunity where if you have someone who’s making $15 an hour in the Pacific Northwest, which is not really a living wage, that person can buy a home and now they can pay a mortgage, which has tremendous tax advantages, and at the end of year five, they have equity in that home. 

What frustrates me is that story, no one believes. I’ve shown the math, I’ve done all the analysis, it’s on the Bridgeview website, and people still like, yeah, but no. I’m like, well, actually yes. As long as these things happen, as long as you have ethical management, actually yes. Now, that person where if they’re in an apartment—and we’ve calculated—over five years at least out here, the math actually pretty much translates anywhere in the country. That five years adds $55,000 of wealth to that person. 

If you compare a two bedroom apartment in any given market to buying a home in a comparable manufactured home park, $55,000. If you’re making $15 an hour, that’s transformative. The biggest impediment to that is the stigma. We’re here talking, I love it, we’re investor-focused and that’s great, but someone who’s just looking to afford a two bedroom apartment, that whole stigma that in some ways for the investment community is funny. It trickles down to the working class population. It’s very real. 

They’ll say, well if these guys are saying that this is gross trailer trash, I don’t want to be a part of that. It materially hurts what could otherwise be a great investment opportunity for people. That’s the stigma around investment is certainly changing, and this is becoming a much more institutional asset class and all that good stuff. But the stigma, I do find the problem now is that stigma is really, really hurting a smaller group of people who are the last people that need to be disadvantaged, financially fragile.

Keel: Tenant base is very fragile, sure. Those are really good insights there. On the flip side, is there maybe a specific deal that didn’t go as planned that maybe you can share and we can learn from? 

Cramer: I think there’s another one and this is getting back to what we were talking about relationships. I came in and this again only in hindsight, I felt I had a very good argument to do a bunch of things in this property. The city disagreed. Instead of trying to reach resolution, I just dug in and I started fighting them immediately. 

Then I wrote a bunch of articles and went to city council. In the end where it stands now is the property’s okay. It’s a little bit better than break even, because I guess it pays its mortgage and I don’t have to feed it anymore. But most of that could have been avoided if I had just not had such a brazen attitude going in and demand. 

It was a tricky one because even today, I think I technically was right in my arguments for (in this case) adding density to this park. But sometimes being right isn’t as important as understanding that you’re going to have to figure out a way to get along with someone. I just didn’t like the city. I didn’t like the people. I was like, you guys are wrong, I’m right, and here’s why. That was the crux of all of the problems, I think. 

We ended up having to spend a bunch of money there that we just didn’t really have to. The incremental gains that I ended up with today versus if I just seven or eight years ago just sat down and said, okay guys, what can we do here and just accepting that that was going to be the reality, that was a hard lesson to learn. What I take away from it is being right, particularly dealing with the government, whether it’s a local government. It doesn’t really matter. There are fights you can’t win. 

A guy who was a great mentor in his 80s now was in mobile home park management for a million years. I’m sure he took this quote, but sometimes a bad deal is better than a good fight. I think that’s probably a quote from some World War II general. Who knows? I always keep it in the back of my mind where, if you feel like you’re getting screwed a little bit, even though you feel like you’ve got great posture to go take someone on, it just oftentimes just isn’t worth it.

Keel: […] going to in the end.

Cramer: That’s an ego thing. You want to be the guy who wins. You want to be the guy who can stand up and be like, yeah, but you got to get yourself out the way. Particularly when you’re dealing with investor funds and things like that, you got to put your ego aside. There are a lot of things happen in that property, but I think that was the biggest one when I looked back is I should have just accepted that, and that created the vast majority of the problems there.

Keel: Well, thanks for sharing that with us. That’s a tough situation all around. We’ve all ran into cities that have the extra regulation or they’re just really strict. We ran into one that’s legal nonconforming, but they were really adamant that no homes could be brought in that were older than five years old. We were trying to fight back. Like you said, at a certain point you’re not going to get very far, and the attorneys are all who’s going to win.

Cramer: And you’ll win. You’ll win a few times. Then you’ll get the state involved and the state will come and slap the city. But then guess what? Now you’ve made a massive enemy out of the code enforcement guy who got lectured, and now he hates you. I’ve done this. You can claim that he’s being unfair. You can claim it’s discriminatory. But it’s not going to work. 

Then you’ve got this guy who can make your life miserable. Usually, you can win every fight and you still end up in this awful position. Back to relationships. Even people you don’t like, and you don’t want to like, you have to figure out a way to get along with them or it’s very, very self damaging.

Keel: It’s good advice. Real quick, we have a little lightning round here. I’m going to ask you five questions. Just tell me the first thing that comes to your mind, all right?

Cramer: Got it.

Keel: If you could own every park in one state, what would it be and why?

Cramer: Every park in one state, Montana. The quick answer is Montana is a recreational market that’s transitioning into a multi-family market. I think there’s tremendous opportunity when that happens going from an overnight RV recreation campground into more of a developed multi-family market. So Montana.

Keel: That’s good. One state you would never own a mobile home park in

Cramer: New York.

Keel: New York. That’s a good one.

Cramer: Tie. California’s a close second, but probably New York would be my first one.

Keel: Question three: what’s the biggest myth about mobile home parks you’d like to bust?

Cramer: That you can raise rents forever and there are never going to be any problems. I really hate that. I hate hearing it. Sam Zell said it. It drives me nuts. It’s a dumb way to think because there are tremendous repercussions, even in a non-rent–controlled market. There are tremendous repercussions to that attitude. Every time I hear it, I cringe. That notion of, your tenants are stuck there. They can’t leave. I hear lenders say it’s not true and it’s very destructive.

Keel: People will leave, for sure.

Cramer: Or they don’t leave, and then you have people who can’t afford to live in the home they own, and they call the attorney general. In my mind, that’s a legitimate complaint that person has.

Keel: Again, relationships.

Cramer: Yeah

Keel: First image that pops into your head when you hear mobile home park.

Cramer: What I see now is some of the really, really modern cool park models we’ve designed. When I hear that, I think of all the potential that could exist. I don’t really think of even what’s around today or even the parks I own. I think that there’s tremendous potential in very, very efficient design, construction, affordable housing. I have a ridiculously optimistic view when you say mobile home park, but I’m not changing it. I don’t care. I know it’s ridiculously optimistic, but I don’t care.

Keel: That’s awesome. If lot rent caps, like rent control became law tomorrow, how would you pivot? I know you’re already operating in some of those states, but how do you pivot around those?

Cramer: Rent control creates a unique set of opportunities. I think it eliminates a lot of buyers just on principle, and it magnifies what you can do. Raising rents is a very easy business plan. When you can’t do that, you’re forced into a lot of strategic things. Expense reduction’s one, infill is another one. How can you add units effectively? 

The interesting thing about rent control that I found, rent increases used to be a very big thing. Every month, my property manager and I would get together, we’d look at what the market rent, how much could blah-blah-blah. Now, it’s just a foregone conclusion, which I think is ironic. 

I’ve written some articles about this, but what happens with rent control is Andrew Keel might have a park that’s at market, and you might say, all right, I’m at market. Tenants are happy, I don’t need to raise the rents. Well, what if you have to repave it? Well, then I’ll deal with that in three years. Now, your mentality has totally shifted. It is no longer do I need to raise rents? It’s how much can I raise the rents? And everybody does it. 

They don’t really track this, but I’m sure, I’m virtually positive that if you look on a per unit basis, rents start to go up way more once rent control is initiated, because nobody can leave their rents the same. We all did that before. If we’re at market, no one raises your rents above.

Rents are no longer a thing. Now, I don’t even know. We raise them once the state tells us to. It’s a destructive policy for a lot of reasons, but again, you guys check out the Bridgeview website, I’ve written a bunch of stuff about it. 

It really focuses your business plan down to improvements. In a weird way, I like it because that’s what we’ve always done. We’ve always really focused on infill, utility repairs, reducing operating expenses. 

Keel: Add real value.

Cramer: Yeah, and I think now when you eliminate the buyers who are more not tactical but who are more strategic (I suppose) and thinking like, all right, this market has a market rent of $750. We can buy this market $500 a month and raise the rents $250. Those guys are gone, so it really opens up interesting buying opportunities. 

I’m a fairly small operator in the scheme of things, but being competitive on big giant institutional deals, I probably wouldn’t have that opportunity. I hesitate to say it, I don’t want to get crucified by every investor, but I wouldn’t view rent control universally as a bad thing. I think there are operational advantages to it.

Keel: Creates opportunity because those institutions, they don’t want to infill. They don’t want to do all that hard value-add. They just want to raise rents. That’s a really good point.

Cramer: That’s exactly right. 

Keel: Andrew, if you were going to be a passive investor looking to invest in a mobile home park deal, what’s a couple of pieces of advice you would give that passive investor just from your knowledge?

Cramer: I would say understand the town would be the first thing. Understand where Ellensburg, Washington is versus another place. That doesn’t mean jump on a plane and fly out there. If you can, great. But understand that Seattle is not better than Walla Walla, Washington or Spokane, Washington, or even Yakima, Washington. 

Understand that the basic metrics of MSA, proximity to a major airport, and median income, all of these big, giant things that like JLL and Coldwell Bank are put in their big reports, those are impactful only to a point. If you want to invest as a passive investor, find a talent you like, find a place that’s showing interesting growth. From there, I would say figure out, and then finding good operators, that’s a whole different thing.

Or if you find someone you want to work with, pick an investment or pick a strategy that you feel like you can check in on. Just like I was saying about have a very clear business goal and be okay leaving money on the table, I think if you’re a limited partner, I would do the same thing. I would go into an Andrew Keel Park, a guy with a track record, and maybe the promote is 50/50 or 60/40, versus trying to go in to someone else who has less of a track record, and maybe the pref is 10 and the promotes only 30.

Don’t get greedy. Find somebody who understands what they’re doing, who’s willing to talk to you and answer questions. As you were saying about some of these offering memorandum that we all see, sometimes these promises get a little bit insane. 

I’d say if I was investing passively, I would put a lot of focus on the market, specifically like the little submarket. Understand the town that you’re going into, and then pick someone who, I don’t want to say track record experience. I know lots of guys have very extensive track records who I wouldn’t necessarily trust. Just you want to keep hammering on this. You want somebody who you can trust for a variety of reasons. Someone who’s willing to talk to you, someone who’s willing to share the worst deal they’ve had, or who is more involved than just at a very high level strategic, I can buy this thing. I don’t care if it’s a strip mall or a mobile home park, because I see a revenue gap between the market and this asset. I think that’s pretty dangerous. 

The advantage of being an accredited investor and being able to pick one of your properties and invest in an Andrew Keel deal is you get to talk to you and you get to confer all those great benefits. I think that those would be the big ones to me. Taking advantage of that opportunity where we don’t all get to go talk to the senior guys at Blackstone or the senior guys at Charles Schwab or whatever, but you do. If you’re going to make significant investments, like take advantage of that opportunity, really understand who you’re working with, and understand the talent. I’d say those would be the things I would focus on.

Keel: Awesome advice, Andrew. Thank you so much for coming on the show. If any of our listeners would like to connect with you or learn more about what you’re doing at Bridgeview Asset Management, what would be the best way for them to contact you?

Cramer: The website. If you just go to bridgeviewassetmanagement.com. Then LinkedIn’s probably another good one. All the stuff we’re talking about, about affordability, rent control impacts, the future of manufactured housing. I do write pretty extensively on that. If anyone’s interested on the investment front, we obviously do a ton of that too. 

I’m really passionate how manufactured housing can solve more problems than most people think it can. That’s my main goal with getting to talk to you, just hopefully we can break down that stigma a little bit, and then hopefully someone listening says, maybe I should go look at some of these. That’s why I’m so grateful for the time. Thanks again.

Keel: Love it. You bet. It takes money to do that. It takes money to buy these things and money to improve them. So really important. Thanks again. 

That’s it for today, folks. If you got value out of this episode, please consider leaving us a review. It really does help us get more listeners. Again, thank you so much for tuning in. We’ll catch you next time on the Passive Mobile Home Park Investing podcast.

Thank you.