Listen on Apple Podcast here: https://podcasts.apple.com/us/podcast/building-a-wisconsin-mobile-home-park-portfolio/id1520681893?i=1000684105012

SHOW NOTES

Join host Andrew Keel in this episode of The Passive Mobile Home Park Investing Podcast as he interviews special guest Dustin Wiskes, a full-time engineer and accomplished mobile home park investor in the state of Wisconsin.

Dustin Wiskes began his real estate journey in 2021 with a value-add, 28-space mobile home park in western Wisconsin. Just four years later, he now owns 9 mobile home communities with a total of approximately 275 pads, all located in Wisconsin.

Dustin Wiskes shares his inspiring mobile home park investing story of starting small and scaling up while balancing the demands of a full-time career. From navigating his first mobile home park deal to overcoming challenges like mobile home park utility infrastructure issues and market evaluation, Dustin Wiskes offers invaluable insights for investors at every stage of their journey.

Key Topics Covered in This Episode:

• Dustin Wikes’ First Deal: Lessons learned from purchasing and managing a value-add mobile home park.
• The Importance of Due Diligence: How proper research can prevent costly mistakes.
• Submetered Mobile Home Parks: The advantages and potential challenges of submetering water and sewer.
• Balancing a Full-Time Career and Real Estate: Tips for managing nine mobile home parks while working as an engineer.
• Public Utilities vs. Septic Systems: Insights into infrastructure decisions and their impact on mobile home park operations.
• Market Research: Evaluating Metropolitan Statistical Areas (MSAs) to identify lucrative opportunities.
• Scaling a Portfolio: Strategies for growing your mobile home park investments while maintaining work-life balance.
• Building Trust with General Partners (GPs): Establishing successful partnerships in real estate.
• Overcoming Mobile Home Park Utility Infrastructure Challenges: Real-world examples of dealing with outdated systems and unengaged owners.

Whether you’re a seasoned mobile home park investor or just beginning to explore passive real estate investing, this episode is filled with actionable strategies and valuable lessons to help you grow your portfolio and achieve financial freedom.

Andrew Keel is the owner of Keel Team, LLC, a Top 50 Owner of Manufactured Housing Communities with over 3,000 lots under management. His team currently manages over 40 manufactured housing communities across more than 10 states. His expertise is in turning around under-managed manufactured housing communities by utilizing proven systems to maximize the occupancy while reducing operating costs. He specializes in bringing in homes to fill vacant lots, implementing utility bill back programs, and improving overall management and operating efficiencies, all of which significantly boost the asset value and net operating income of the communities. Check out KeelTeam.com to learn more.

Andrew has been featured on some of the Top Podcasts in the manufactured housing space, click here to listen to his most recent interviews:  https://www.keelteam.com/podcast-links. In order to successfully implement his management strategy, Andrew’s team usually moves on location during the first several months of ownership. Find out more about Andrew’s story at AndrewKeel.com.

Are you getting value out of this show? If so, please head over to iTunes and leave the show a quick review. I have a goal of hitting over 500 total 5-star reviews, and it would mean the absolute world to me if you could help contribute to that. Thanks ahead of time for making my day with your review of the show.

Would you like to see value-add mobile home park projects in progress? If so, follow us on Instagram: @passivemhpinvesting for photos and awesome videos from our recent mobile home park acquisitions.

Talking Points:

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

04:00 – Dustin’s first mobile home park: lessons learned and key takeaways

08:00 – The importance of thorough mobile home park due diligence

10:45 – Advantages and challenges of submetered water and sewer in mobile home parks

13:30 – Managing nine mobile home parks while working full-time (feat. RentButter insights)

18:20 – Public utilities vs. septic tanks: what to know

20:00 – Acquiring used homes for mobile home parks

24:00 – Market research and evaluating bad infrastructure in mobile home parks

33:00 – Trusting and partnering with GP’s

37:00 – Managing the ups and downs of owning multiple mobile home parks

45:22 – Out-of-touch mobile home park owners: handling common challenges

47:00 –  Researching MSAs and their importance

50:00 – Scaling your mobile home park portfolio while maintaining work-life balance

56:07 – How to connect with Dustin Wiskes

57:00 – Closing thoughts

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

Links & Mentions from This Episode:

Dustin Wiskes’ Instagram: https://www.instagram.com/dustinwiskes/

RentButter: https://www.rentbutter.com/

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

Andrew: Welcome to the Passive Mobile Home Park Investing podcast. I’m your host, Andrew Keel. Today I’m thrilled to have a new guest on the show, Mr. Dustin Wiskes.

Before we jump in, I want to ask a quick favor. If you’re enjoying this podcast, could you please take just a quick second and rate it or review it on your favorite platform, wherever you listen to your podcast? It means the world to me and helps us reach more listeners. Thanks for doing that favor for me. All right, let’s dive in.

Today’s guest, Dustin Wiskes, has an inspiring journey in the mobile home park space. Dustin works full time as an engineer and began investing in mobile home parks back in 2021. His first deal was a 28-space value-add community in Western Wisconsin. Since then, he’s grown his portfolio to nine mobile home communities with approximately 275 lots all within the home state of Wisconsin. Dustin, welcome to the show.

Dustin: All right. Thank you, Andrew. Big fan as I mentioned there and a longtime listener, so look forward to chatting with you here.

Andrew: Awesome, man. You being a Wisconsin fan, we talked a little bit, I got my Travis Kelce jersey on today. This is not a Green Bay Packers jersey, so it’s playoff time. 

Dustin: I know. It has arrived, so all the hype is starting here. The chiefs just have such a team. It’s going to be hard to compete. Anyway, we always are hopeful here in Green Bay.

Andrew: You got a chance. You got to be in it. That’s awesome. Dustin, would you mind just starting out by sharing a little bit about your story and how in the world you got into investing in mobile home parks?

Dustin: As you mentioned, I started in 2021 with mobile home parks. Just prior to that, I was actually pretty confident I was going to just be buying duplexes around the Green Bay area here. A good friend of mine got me involved in that, and helped me get started. I thought that was actually going to be the clear path to financial freedom and everything everyone hopes for in that regard. 

My wife and I did go down that path for a few years. Just like anything else, it wasn’t scaling quick enough and wanted something we can maybe manage remotely someday because, again, we always would. If you invest in something, five minutes down the road, you’re always going to be inclined to be the guy to go fix the issue or what have you. I was doing that nonstop.

I needed to pivot. I think maybe it was BiggerPockets or something like this back in that time, where maybe Brandon Turner or it was somebody in that space that was talking about mobile home parks. I was just following what smart people are doing there. If they think there’s something there, I might as well pursue it. 

I took Frank and Dave’s bootcamp, 2020 timeframe. I actually had to go look that up to see back in my old email archives there when that actually was. It was mid-2020. 

Andrew: Nice. That’s the Covid year. Was it in-person or virtual?

Dustin: It was maybe one of the first virtual experiences, which was fine because I wasn’t trying to go jump on a plane if this thing wasn’t going to be for me. It worked out. We just sat and did that whole course. I was like, okay, we got to just start deal finding at that point. It was at least six months until anything even remotely interesting came about. LoopNet of all places, which is usually where deals go to die.

Andrew: LoopNet’s where you found your first one?

Dustin: Yeah, and it was just a random listing. A broker just put a listing out there. It wasn’t some big offering package. It was a single page, handwritten in the offering documents there with number of spaces, number of occupied, and didn’t even mention how many tenant-owned homes or anything to that regard.

Anyway, I think I just remember sitting. I was putting my two-year-old to sleep and I was like, oh, my God, I got to call this lady right now, as one of those random finds. I must have got her before the rush of other people trying to get a hold of her. I got her to send in an offer basically for me there. That’s how we ended up getting that one.

That had a lot of hair on that deal in hindsight. I was willing to look past anything to get the first deal. It was one of those classic ones, where it was a master meter at electric. The previous owners were telling me when I met them, they were going around with a notepad and paper, getting electric meter readings every month and billing it back. I’m like, this is wacky. Are you sure this is the case here? They’re like, oh, yeah.

Andrew: Is this normal?

Dustin: Yeah. Actually, I was almost going to kill that deal because I was a little nervous at the time. Everybody tells me not to buy something like this. I just took the boot camp. They said, you have to be really wary of this. But we did it, and it worked out that I negotiated a credit. Within a few months, we got that converted. It actually wasn’t that big of a process. I got money at closing to basically help remedy and get that all taken care of there. It was your classic value-add.

Andrew: Do you have to install a pedestal at every lot where it’s like $1500 a lot or maybe more?

Dustin: That’s about right, yeah.

Andrew: Then you have to get to the main line over there on the transformer?

Dustin: You’re correct, yup. There was a study done. Luckily, I don’t know if this is the case everywhere, but it was somewhat more of a local utility provider, not one of the big national brands that’s all over the place. They were fairly easy to work with. 

Don’t quote me on this, but I think they were offering basically to help me out because it was aging. I was able to get on the phone with some of the guys in charge of how much the fees were going to be for them to put in their new main, then trench in all the laterals, and maybe add a transformer. It was a hefty price, but I tried to estimate that ahead of time there and get some credit at closing. I still have to come out of pocket some, but I was like, oh, this is worth it. Brand new electric.

Andrew: Was it septic and well also?

Dustin: Nope. That was all city utilities there. Formerly septic and well, but prior to me purchasing it, they had converted at some point in time. I think they negotiated because there’s a water tower actually almost in the park or the city. When the city put that up, they needed an easement through the park to get to the new water tower. The park had to give up a lot. That’s what it was. The park had to give up a lot, but then the city actually put in a new main in the park as a part of that. I was like, oh, my God.

Andrew: That’s a pretty good trade-off.

Dustin: I’m trying to get that everywhere, yeah.

Andrew: That’s awesome. That was the first park, 28 lots. You took the bootcamp beforehand, so you had the due diligence handbook. What type of mistakes did you make on that first deal that, moving forward, you’ve learned from?

Dustin: That one, I guess I would just say, I didn’t go through the due diligence handbook probably as well as I should have. I tried to do the main ones. I got an environmental study done. In hindsight, I probably should have got more of a proper survey done to see some of the boundaries, because I think those got actually a little tight.

Andrew: When I first got started, I was cheap. I didn’t have a lot of money, so I was doing the boundary surveys at the beginning. I learned a few years ago that the Alta surveys are worth their weight in gold. They point out all the underground utility lines, not only the boundary issues and the title issues, but the underground utility lines are just a huge benefit in my opinion. 

We had gas lines that were going under some homes, and we didn’t even know about it until we got to the refinance point, and the agency lender required the Alta survey. I just think the Alta is worth it, but I know on some smaller properties, it’s like, hey, this is never going to be an agency quality park or an agency loan type of deal, why pay the extra money? It’s something to think about.

Dustin: That’s the reality. Actually, for the most part of my whole portfolio there, they’re all smaller deals. What’s the average? Anywhere from smallest deal, smallest park is 12, up to the biggest one’s 54, and there’s everything in between. Maybe only a couple of those might actually qualify. I don’t even know what those qualifications probably are.

Andrew: But I bet, Dustin, if you package them all together and cross collateralize them as a Wisconsin portfolio loan, I bet you an agency lender would look at it.

Dustin: Okay, got you.

Andrew: Do you have any investors on these deals? Do you raise money from friends, or is it all you?

Dustin: We’ve basically just done everything ourselves. Actually, my wife and I don’t have any investors or anything like that. It’s all just been one at a time. Actually, previous to this it was improving those duplexes at the time, then pulling equity out of those, and rolling that into that first mobile home park. We did the value-add model of infill, billback, water, sewer, all that jazz. It improves the NOI, and then we refinance that one to go get the next. It’s been a snowball effect to date.

Andrew: That’s huge. It’s only been three years, and already you’re hitting that snowball effect. You must be doing some serious value-add deals. Tell us about the infill, what that looks like, and then what your plan is. Do you go back to the same local bank to re-collateralize it after you’ve added the value?

Dustin: Exactly. Everything you read about or hear about is the billback, water, and sewer is like day one. If I ever buy a park that’s not submetered, I’m picking up the phone, sending an email to Metron. That’s just who we use to go get up a bunch of meters to put on all of them. Almost every deal we buy is under market rents.

Andrew: Let’s go back to the Metron thing real quick. Do you guys get the master meter as well? 

Dustin: I never have. I’ve always thought about it.

Andrew: The reason why we do that is that we can track the usage. We’ve had the cities, where the city main meter will be off and it’ll be reading bad. Then they’re charging us all this and we’re like, well, we can’t find this leak. We’ve looked everywhere. We’ve hired American Leak Detection and everything. We couldn’t find this leak.

Come to find out, it was the city’s meter that was reading wrong. Luckily, the master meter, I think for an extra $2000, you can tell the difference between the submeters and the master meter to know if the water is actually even going through.

Dustin: That’s exactly where my head was at too. I just got an email from one of the municipalities. She’s just like, hey, do you know? To your point, sometimes every quarter where they send you the meter reading, you could have three months of catastrophic leak somewhere if it’s not showing itself in the park. You would never know.

She just emailed me a few weeks ago. She’s like, hey, do you know you use 600,000 gallons? I was like, what? You got to be kidding me. I’m doing the math in my head. I’m like, oh, that’s a hefty bill. They read the meter wrong. That was it.

Andrew: An extra zero has huge effects.

Dustin: It’s one of those things. That wasn’t the first time. I actually had an excavator. I had American Leak Detection on standby. It was like a holiday. They were about to hit the road to go to the park and they’re like, oh, no, no, there was some buildup on our meter, it’s giving us a false reading. I’m like, you got to be kidding me.

Andrew: Thanks for the heart attack.

Dustin: Yeah. Luckily, I called everything off there. That’s a good point. One of the things was I think their manhole was never big enough. Every single park I try to do that in, I’d have to put in another manhole or some junk.

Andrew: It’s expensive.

Dustin: Yeah.

Andrew: Sometimes you can have your on-site manager. If you have an issue, just read the master meter, the municipalities, every day. Every day at the same time, go check the meter and how many gallons are you using per day, but you’re going to have a manager that’s on it to do that.

Dustin: I see what you’re saying. That’s a good point.

Andrew: What do you think, Dustin, has been the toughest hurdle for you from going from that first park now to nine parks all in the same state, which is awesome? What’s been the hardest part? 

Dustin: I think it’s probably a mix of just time management for me anyway. I’m still working full-time at my day job. It is a flexible job, I’ll say that. I can get up early and do some work, and then take a phone call from a contractor in the middle of the day if I need to, if I’m not in the middle of a meeting or what have you there, I’m not traveling. Sometimes there’s some travel involved with that. It’s time management.

I’ve been trying to get better. I guess one of the ways I’ve gotten better at that is just investing in software. I do everything through the Rent Manager. I was not a fan of trying to get that when I was still getting started because I’m like, why do I need to buy this software? I only have one park or whatever, but I’m like, no, I’m going to do it. If I’m going to scale this eventually here, it’s going to make sense at some point. That’s been helping. 

Andrew: Do you use it for the accounting side as well?

Dustin: Yeah, I do. I was doing that myself for a while. Only recently, I hired someone to help me with that and some other functions in Rent Manager. I’m trying to switch everything over to there, so I don’t have a bunch of different systems. Now I’m on the phone system through them. Metron obviously integrates with that. I’m still not on everything. 

Andrew: Do you use RentButter or AmRent for the background checks?

Dustin: Now I feel like I might have to do that. I don’t actually screen that many folks though. I don’t know about you. I guess when I infill, that’s one factor. Until I bought these most recent parks, I was rather almost full occupancy-wise, so I wasn’t screening that many folks. There wasn’t that much turnover, so I was just doing one-off background checks on folks. Which one do you use?

Andrew: I use RentButter now. It’s been pretty good. We’ve had good success with it, but we were on AmRent before then.

Dustin: Okay. With RentButter, you have to pay basically an integration fee, and then they bill that right to the tenant there or the applicant, maybe? I’m not sure how that works.

Andrew: It’s been a while since I’ve looked at that. I think it’s per park. I don’t know exactly. I could get back to you on that.

Dustin: I’m pretty sure I’ve pinged a couple of emails to some folks on that.

Andrew: You’re up to almost 300 lots. Are you managing it all yourself, just you and your wife?

Dustin: Yeah. My wife isn’t probably super involved in the day-to-day there. She’s the household management if you know what I mean. We have four kids.

Andrew: Nice. I have four kids as well. 

Dustin: I saw that online, yeah. As well as I do, that’s a pretty hefty…

Andrew: Full-time job with overtime.

Dustin: Yeah, no doubt. They’re upstairs probably wreaking havoc right now. I have park managers. I forgot what the question was, but I have park managers that help at the parks’ day-to-day stuff, but then I recently hired someone to help. She’s getting trained on RentManager. She helps field text messages, voicemails, and some of the accounting functions just to help.

Honestly, it’s hard not to have just RentManager open on the side on a second screen. I just can’t help myself. You see your dashboard, you’ve got all your metrics, and you’ve got your delinquency. You’re like, okay, well, I’m about to send out 10 text messages to these guys here to see where the rent is at.

Andrew: It’s easy.

Dustin: Yeah, it just makes it too easy.

Andrew: That’s awesome. Tell us about your most recent acquisitions and how you’ve been getting deals done with the higher interest rates and the current climate. 

Dustin: The most recent deal was a package of two parks in the northeast Wisconsin area here, so not too far from Green Bay where I’m at. These actually were the closest parks that I own. Everything else is two, three, or four hours away. That was that bigger park. It was a 54-space park and a 42-space park. Just a broker that I’ve got a good relationship with brought that to me there. It was very reasonable. I guess it was maybe more aggressively priced because the rents were super low, but it still made sense. 

Andrew: Value-add. How many were occupied? Was it public utilities?

Dustin: I actually don’t own anything that’s not on public utilities. That’s one of my sticking points there. I’ve just tried to maintain only public utilities. I don’t really want to even think about learning well in septic and what could come with those. I know. 

Andrew: It gets ugly fast. We have a park that has 67 septic tanks and 67 leach fields. Every month, there are roots getting in the leach field. It’s $3000 to replace the lateral line. It adds up quickly.

Dustin: I’d get pretty nervous about that myself here. Like you said, one thing goes wrong on that, and all of a sudden you’re in a pickle there. These both were value-add parks mostly because the rents were 220 lot rent, 245 in the other park, so they just never kept up. A long time owner never kept up with the standard rent raises. That was a clear indication. You don’t even have to be an expert on the area. You just said that 220. Nobody’s at 220 anymore.

Same with infill. I think maybe 75 out of the 96 occupied in that package there. I’m a pretty big used home, infill whenever I can manage there. I just think they can be more affordable as the end product there to sell off.

Andrew: Tell us about that. Tell us how you do that because I’m a big fan of used homes as well. With the pricing of new homes, it seemed like they went from $30,000 to $50,000 real fast just from Covid. It was like, okay, then normally you can get some homes from $30,000–$35,000, even there was $28,000. All of a sudden after Covid, $50,000 is the cheapest they got.

Dustin: You’re absolutely right. It’s frustrating, actually. It’s not an easy button, but it’d be great to just have five new homes show up.

Andrew: You can tie them all up, line up the contractors, easy 100%, yeah.

Dustin: I get them from wherever I can find them, really. That’s Facebook Marketplace. I’m on there, or I have some folks that are looking around for me. You can find $5000 or $10,000, 1990s, 16×80 or 14×70. Any of the above really, it will just all of a sudden pop up because someone’s bought some land with the home on it, and now they need it gone because they want to build their own house. 

I’m scoping that every day. I got in touch with a couple of good movers, transporters. If they’re moving a house, someone wants a new house on their land. They got to get the old one off. They just are looking for someone like myself who’s got somewhere to put it. That’s been really good.

Andrew: You manage all that yourself in addition to the property management day-to-day?

Dustin: Right. That’s probably actually the most time-intensive now that you made me think about it.

Andrew: The follow up, the contractors. The transporters alone, if you find a good transporter, they are worth their weight in gold. It’s just been really tough for us to find consistent ones that are just reliable.

Dustin: You’re absolutely right. Didn’t you say you had a truck? 

Andrew: We bought a toter truck and started a transport and installation business, got licensed and everything. I had it for a really big project where we infilled 60 lots. Then my driver just decided like, hey, I don’t want to be on the road all the time. He did more than one project. I think he did three or four projects. I had it for about two years, but we actually just canceled the insurance and shut it down. 

It’s also very expensive if you want to go over state lines, outside of your state. You have to get these IFTA stickers with the Department of Transportation. And that’s why some transporters take a home to the state line. Then they have another guy come and pick it up and drive it the rest of the way in the other state because it’s so expensive to get those IFTA stickers cross state lines. It makes it exponentially harder.

Dustin: That makes sense, actually. I know some guys. I try to find some neighboring state’s homes that come up and like, I can only go 30 miles into there or something like that. It’s a little hairy. That makes sense now that you’re saying that, if it’s wildly expensive.

Right now, I’ve got a couple of good contacts. I think they get homes too from parks that close down. They now just have dibs on all of their inventory. They’re not all nice. That’s the other tricky part because who’s going to fix up this thing? Not everybody likes fixing up mobile homes. 

My dad actually has volunteered. He’s recently retired, very handy. He’s like, hey, I’ll go fix up some homes, just put me up in a hotel or whatever.

Andrew: Is he willing to travel to Indiana? I got a couple down there.

Dustin: You never know. They got a Ritz Carlton at Indiana, probably not. I’m just joking.

Andrew: That’s awesome, though. How has your strategy changed, your mobile home park investing strategy? Is there something that you were doing early on that now you don’t do? You said you stick with public utilities. Your most recent acquisition, you bought a couple of bigger parks compared to the smaller ones. What’s changed and why?

Dustin: I think the only thing I am now really focusing on, before I thought, if you bought anything in Wisconsin, and there’s a little backstory to that—when I took that bootcamp, I come to find out that Frank, Dave, and all those bigger guys in the market, they owned a ton in Wisconsin. I’m like, damn, this is great. It’s a blessing because you’re like, oh, wow, this must be a great market. It’s a curse because they own a bunch of stuff and in the state.

Anyway, I was like, gosh, if they think this is a great state, anything I buy here is going to just be as good as it gets in terms of tenant base, able to sell homes, and all the above. That’s not the case. I do own a couple of parks that I was like, oh, I’m going to go chase these and they are in tougher markets. There are not as many jobs. These couple of parks I have in mind here have more delinquency if I were to compare it to these other parks. I can’t sell homes for nearly as much. I have to sit on them or heavily discount them, which is fine. They still sell everything. Everybody still pays eventually. Clearly, markets matter.

Andrew: Is it smaller markets,or is it a part of town that’s a bad part of town? What is it?

Dustin: No, it’s just smaller towns. It’s just 1000-people towns. The next closest city is only 20,000 people where a Walmart is. It gets really tricky.

Andrew: Those are the ones where you can get the best deals. You’re like, oh, yeah, this is a 12 cap. How can this not be a home run deal? We own a park right in urban Kenosha. It’s smaller homes, but the demand is crazy. The waiting list is 50 people long. It stays full. If we are going to have a vacancy, there’s no turnover time because it’s like, okay, you’re moving out. This person wants to buy the home from you. Here’s three people that want to buy your home from you. We give that to our tenant and then coordinate, broker the sale.

Markets are super important, but that’s not to discount the mid-sized markets, because I think they need affordable housing. We own a park in Punxsutawney, Pennsylvania. It’s not in an MSA. If you google it and look at all the stats, you’d be like, this is a very rural area, but it’s one of our best parks. It’s just consistency, reliability, and high demand. It’s just finding those little pockets, the good deals, but you’re also able to have high demand.

Dustin: Yeah. That’s the trick, I think. I think most of my stuff isn’t technically in an MSA, but it’s right outside of it. It’s a big enough MSA. I think it extends beyond what the maps maybe say it is. I don’t even know who defines those. Sometimes I look at it and I’m like, we came up with these? It’s all it’s all by the county. I’m not even sure where that comes from at the end of the day.

Being right on the outskirts is actually perfect. You can find better deals that don’t meet the MSA, but technically, you talk to a couple of people and they’re like, oh, yeah, I commute to Minneapolis, is the one I’m thinking about. You’ve got a pretty good extension of Minneapolis, for example, that extends into Western Wisconsin. That’s where some of mine sit, and those are great. I can sell homes. Lot rents are really competitive.

Andrew: Is there anything else outside of market that you would say you’ve learned from and you’ve changed your buying criteria on future acquisitions from that awareness now? 

Dustin: Other than the market, I’d be really wary of like, I guess I don’t know if I would have bought these earlier on, but really bad infrastructure. That would just scare me.

Andrew: Water sewer lines that are really old. That kind of stuff or just old pedestals?

Dustin: Probably really capital-intensive stuff that I couldn’t negotiate. Fun story is this two-park deal that I purchased that I’m talking about was originally a three-park deal. The third park however was riddled with Orangeburg. I just couldn’t stomach even thinking about what it would take to do it. 

A good friend of mine ended up actually making sense of the numbers, negotiating some price reduction, and stuff like closing. He was able to make it work, which was great, but that just isn’t for me. That gets me a little out of my comfort zone.

I spend a lot of time and money on sewer inspections, making sure there are no water leaks going into old water lines and stuff like that. Maybe I spend more time on that than I originally did because I think those can just eat your lunch.

Andrew: A hundred percent. There are deals out there that look like good deals on paper and on the spreadsheets, but then when you start looking through the due diligence. I’ve had three deals under contract in the last year. I look at them and I’m like, okay, there’s obviously a large water leak here. I’m talking to the broker. The broker’s telling me what I want to hear.

I talked to the seller. The seller’s telling me what I want to hear. I talked to the contractor, the contractor’s like, oh, yeah, I told the seller four months ago, he needs to replace all the water lines in here. He has six leaks. 

Then I take that back. I’m like, hey, guys, you listed this thing three months ago right after you got that information, what’s going on here? They send over the cancellation of contract. There are people out there trying to get you to make a bad move. If you’re not careful, that’s a six figure mistake if you don’t identify that beforehand.

Dustin: It definitely can be. This one in particular that I’m talking about there, I don’t know what the bid actually came back at, but I think it was in the hundreds of thousands to remedy this Orangeburg. If you’re going to do it in one move or whatever, replumb the whole park there, who can stomach that.

Andrew: If you don’t know about it.

Dustin: Yeah.

Andrew: The one park in Kenosha that’s in very urban Kenosha had a run of Orangeburg in it. Basically when we found that out, we’re like, oh, we should probably kill the deal, but let’s just get a quote to see like, hey, what’s going on here and how much it would cost? 

We got a quote. It was just a run of 20 homes and it was going to be $150,000. Luckily, we were able to get a repair credit for that. If you don’t know beforehand and you buy that, your investors are going to be pretty upset. You don’t have investors, but your cash flow is going to be gone.

Dustin: Exactly. Did you guys already do that repair? Are you going to wait until it makes more sense?

Andrew: We haven’t. The thing is it’s Orangeburg, and there were some bellies in the line. It wasn’t causing any issues right now, and it’s the middle of winter. We just bought it a few months ago, so if we do it now, it’s going to be more expensive with the ground frozen and everything, so we’re going to wait and do it spring, summer. We got the contractors lined up. 

Went into the city and looked at the permits that have been pulled the last year and found some contractors through those permits of who’s done major infrastructure work, like utility and sewer line infrastructure work. That’s where we found this contractor.

Dustin: Nice. Is that your mentality there? You’re not going to wait until it fails to do something about it. You’re going to just bite the bullet?

Andrew: We did it. We got the price reduction, we got the repair credit. We’re just going to get it done because it’s only a matter of time. Literally, Orangeburg is like papier-mâché. Have you ever seen it?

Dustin: Yeah.

Andrew: I’ve touched it, picked it up, and it just disintegrated in my hands. I was like, how has this been in the ground? It doesn’t make any sense.

Dustin: I’ve got the sewer camera video that I took of the one I’m describing there. We could pull it up for the viewers if they wanted to see what it looks like in real time. It’s pretty awful.

Andrew: That’d be cool if you can share your screen. I don’t know if you can.

Dustin: I didn’t prep.

Andrew: Don’t worry about it.

Dustin: Next time.

Andrew: Next time, yeah.

Dustin: Put it in the notes or something. I’ll link it to Dropbox or something. 

Andrew: That’d be fun if you want to go down a dirty sewer line. Who doesn’t want to do that? Who doesn’t want to see what that looks like? If you were going to passively invest in a mobile home park deal with another operator, what would be the most important things you would look for before wiring the money?

Dustin: I preface this. I never have done any LP stuff, but if I were, I think I’d ask the classic, oh, have you done this in the past? How many times? What’s your prior results, all that normal stuff. 

For me, I just would want to try to talk to wherever the GP is there face-to-face and just try to get a feel for the kind of person they are. I don’t know. Is this guy going to screw me over? Is he someone I could actually see myself sitting down and having lunch with or something like that? Not saying you got to be friends with the guy, but I feel like you can just tell a lot from that.

I have a hard time trusting folks who just talk nonstop. They’re in the pitch mode and salesman-type scenario there versus here’s what we’re offering. If you’re interested, you can invest–type of thing. It’s more of a gut feeling. You don’t know. You can see their prior results.

Andrew: It’s crazy to me how many, I would say 90% to 95% of the investors that have invested in our deals, I haven’t ever seen. They just wire the money and take it, which is terrifying. Like what you’re saying, I would do the same thing. I want to talk through the deal. I want to talk through the value-add, the plan, and the timeframe.

I’ve had people fly to Florida to meet with me before they invest with me. We’ve sat down and had coffee, but most people don’t do that, which is crazy. I agree. I think that’s a good way to get to know somebody.

Dustin: For you, though, that speaks almost to your reputation and what you’re doing on here. To be honest, that does go a long way in my head. When I listen to you on interviews and see you on Instagram posting stuff of your family, I’m like, oh, this guy’s got values. He’s not just out here hustling people and stuff like that. Or he’s an incredible actor if he’s doing all this for show. He’s running off with his four kids and his wife after he takes my money. I don’t think that’s the case, so that’s what I would look for. I would have such a hard time searching them out and being like, oh, this guy buys mobile home parks. I just see the company name, not the actual operator.

Andrew: The person.

Dustin: Yeah, that’s what I would say.

Andrew: I appreciate that, Dustin. I think there is something to be said from that, just people with values and just very transparent like you are. Just very, hey, this is what I’ve learned, I’m trying to help other people. You’re able to still build that passive income and build the dream of being able to work from anywhere, technically.

Dustin: That’s the dream, yeah. I’m hoping to do that one time. I don’t know if I’ll ever get to where you went down the path of. I was going to ask you that. In hindsight, you’ve obviously done the self, you’ve owned them yourself, and built the portfolio yourself. You went on to take on investors, buy bigger deals, and expand. I think I saw you said you own 3000 lots or something like this. Should I have owned 500 and have some just myself? 

Andrew: That’s probably the best question I’ve been asked on this podcast. I think there’s been levels to this. There’s been three times where we’ve hit a ceiling. It was like the wheels were falling off because it’s growing problems, growing pains. We would grow into this and we didn’t have the team to support it. We would have this breakdown.

One time our head bookkeeper during Covid just stopped paying bills, just stopped going to the PO box and stopped paying bills. We got these notices. I was notified the utilities were going to get shut off and all of this. I’m like, how is this even happening? This is blocking and tackling. This is the easy part.

I had to go to the PO box and take out all this mail. I had to go bring a card to the desk and get a big container, a huge container full of mail. I had to open all the mail myself. This was during Covid. I had to start paying bills, checking usage rates, and all of that. She got overwhelmed and she didn’t say anything. She didn’t want to hurt my feelings and tell me that, hey, I’m drowning here. I can’t keep up with the amount of mail we’re getting.

There’s been three times that come to my world where we’ve hit that. We’ll hire ahead a little bit, what we think is ahead and catch up. I do think about that. Taking on investors has been really rewarding because most of my investors are friends and family or referrals of friends and family. 

It’s been really rewarding when we hit a deal that’s just rocket to the moon status, then everybody wins, and everybody’s really happy. The asset class has done really well. It’s not rocket science. When you do the blocking and tackling, it can be very successful. It’s been a good choice, but yeah. Just to grow growing, I don’t recommend it.

Dustin: I kind of waver on the matter myself. My whole goal was just to support my family and eventually step back from my full-time job. I don’t foresee that anytime soon. I like my full-time job. 

I think that’s the natural progression for most folks. If they get enough, where they are getting too much to handle on their own, they need to scale up, change the systems. I’m stuck in that analysis of, is that where I want to take things next, or am I content? I think there’s a peacefulness in that as well, just keeping what I have, optimizing it, and growing a little bit over time.

Andrew: A hundred percent. There’s something to be said about keeping your inner peace and not being like, yeah, we have 50 parks, but I’m pulling my hair out all the time.

Dustin: Drowning, yeah.

Andrew: Yeah. I’d rather have 30 parks, 25, or whatever that number is, but be sane. I think what we’re starting to do is prune off some of the parks that maybe are in the not-so-great markets or have a little bit higher delinquency, and we have to chase them a little bit more. Just prune off some of those and then just really take our time on new acquisitions to try to buy in better markets. 

To me, when I say better markets, I really like to see population growth, and I like to see median home prices really high. Like $300,000 median home prices and lot rents are $250, you know that that is an area that you’re going to have a long runway, in my opinion.

Dustin: You just use BestPlaces for that, generally.

Andrew: Actually, I’ve been using Zillow. Instead of using Kenosha median home price, I’ll go zip code. I’ll be like, okay, this zip code inside of there, whatever the zip code is, then I’ll type in median home price Zillow, and then it’ll usually pop up right at the top what the median home price is in that zip code. That’s a more specific area, more accurate number that’s constantly updated.

Dustin: I like that. That’s good. I never even thought about that. I definitely have Zillow, but I didn’t zoom in to a zip code specific because that could change.

Andrew: Another thing that I’ve found a lot of help, and I actually found this at a self-storage mastermind, but if you go to City-Data, the website is city-data.com, that’s another census website, they have a ton of information on zip codes and areas. In the zip code, do command F and type in poverty, and it’ll bring you right to the poverty rate of an area. If the poverty rate is over 15%, that’s something we stay away from.

I see deals in Mississippi and Alabama all the time that look like really good deals. Then I’ll look at the poverty rate and it’s 33%. I’m like, oh, my goodness, that is the delinquency problems and everything. I would not want to mess with that.

Dustin: I’m super curious. The park I mentioned that’s really hard to sell homes, I’m dying to go look at what that rate is at. I would suspect it’s higher. I suspect it’s all correlated like you said.

Andrew: Totally. We found this because we bought some duds. We bought a park in Keokuk, Iowa, and it was the same thing. It was so tough to sell homes. If we did sell an RTO type of home, the most down payment we could get was $1000, and that was like pulling teeth. Where other markets, like we have one in Columbia, Tennessee where the down payment on the RTO, the minimum is $5000, and we’re getting that all day. It’s a much better market, much more demand.

We’re just trying to test ads and everything, just avoid the Keokuk markets and buy more in these better markets. Even if we have to pay up a little bit more per lot, I think long-term, with the rent growth possibilities, it will be better off.

Dustin: Definitely. How are you guys judging rent growth? Are you just seeing what other parks are doing? Are you basing it on the equivalent…?

Andrew: I think the biggest one is what the other comps are doing. Obviously, we’re not the YES Communities or these UMHs that have brand new swimming pools, playgrounds, and stuff. I think we could be 80% of what they’re charging for lot rent, and they’re raising it every single year. 

In addition to that, we look a lot at median home prices. If we times it by 0.002, 2% of median home price, that’s not a perfect depiction of what lot rent should be, but it’s something to look at, 0.002 of median home price, and then 40% of the three bedroom apartment rents. It’s like another gauge that we’ll look at, and then maybe we’ll take the average between the 40% of apartment rents and the 0.002 of the median home price just to see how those level up in addition to the local comps. 

Some mom and pop markets, all the parks are owned by one family. They’ve just never raised rents, but the median home price is $350. There’s a missed correlation here.

Dustin: I do the same. I’m curious. That’s an interesting calculation there of what you just described there. I definitely take a look at some of the bigger operators. In Wisconsin anyway, there was RHP. They bought 40 or 50 communities. They’re by far the largest owner in the state now. You can call any of their communities and see what they’re doing. 

They’re not hitting all their existing tenant base with it, but you can ask, hey, new move-ins, what are you guys charging? It’s more than I ever would have thought to be honest. They also probably have a team of guys doing that homework and then going through stuff.

Andrew: They just do rent comps.

Dustin: Yeah. As long as I’m just chasing them, I feel pretty good. Andrew Keel is in Southeast Wisconsin now, so I’ll call his park up too to see what’s going on. 

Andrew: You know what’s great in the State of Wisconsin? The Manufactured Housing Association. Do you work with them at all?

Dustin: They’re the best.

Andrew: Every time we called them, we were in due diligence. This is our first deal in Wisconsin. We called them and they were so helpful. We weren’t even members yet. We are now that we own, but they were just so helpful, went out of their way to hook us up with local attorneys that know MH and everything. It was amazing.

Dustin: Probably at least monthly, I ping them for something.

Andrew: The vendor list they gave us, like you’re saying, transporters, installers, other vendors, yeah they’re useful.

Dustin: You got to come to the meeting. I think there’s at least one annual. It’d be the one annual meeting, but then there are random other meetings. You just got to come up to Wisconsin.

Andrew: If I do, you have to promise to bring me some of those cheese curds.

Dustin: Oh yeah.

Andrew: What’s that place up there with the good cheese curds that they have at the state fair?

Dustin: There are probably a dozen different premium brands there, where they’re extra squeaky. If you don’t know what a good cheese curd is, if it squeaks, that’s your measure of whether or not it’s fresh and good. Do you guys have farmer’s markets?

Andrew: Yeah.

Dustin: I assume you did, but that’s the best place to get in my opinion because there are five different options. Usually it’s everybody, it’s local farms, or whatever that comes with their own stuff or whatever. You’re just like, oh, my God, that’s about as good as you get.

Andrew: No preservatives. Yeah, it’s just the real pure stuff. That’s so awesome.

Dustin: Yeah.

Andrew: Dustin, what do you think the perfect mobile home park looks like? 

Dustin: Just for me, it’s definitely on public utilities for all the reasons I already mentioned there. I think we already hit on it, but I’m a huge fan of everything even outside of a normal MSA. If it’s on the outskirts, yeah. If you have 30–40 minutes from the city center, because that’s where everybody lives.

For me anyway, a lot of my tenant base, that’s where they want to live. They could have the option to move closer, but it costs too much, so they live right on the outskirts. Still easy to commute, still has all the amenities. You can still get towns that have Walmarts, even if they’re not right in the MSA there. I actually use that as a pretty good measure as well. Is it 20 minutes from a super Walmart? Again, those guys got teams.

Andrew: Yeah, the bootcamp. Frank talks about that, yeah. Where’s the nearest Sonic? Where’s the nearest Walmart? There’s something to be said about that.

Dustin: Yeah. Walmart’s got a whole floor dedicated to like, is this a good market before we spend all this money here? You go to believe if you’re 20 minutes away from that, they did the research. There’s demand, there are people, there’s some growth. What I’m scouting for is just stuff not in the big cities. 

I’d be interested if you have a hard time dealing with any city like in Kenosha. Kenosha’s pretty big, but then again, it is outside of really big stuff, Milwaukee, in Chicago, and whatnot. I love cities with 5000 or 10,000 people or whatever there versus 50-plus.

Andrew: We have a park in Roseville, Michigan, which is very close to Detroit. It’s very urban, very dense. The city is really tough. We need a permit for everything. Renovating a mobile home, you need to replace the door, you need a permit. You’re going to change the window, you need a separate permit from the door permit. It’s just over engineering and regulation. It’s hard to get anything done because you’re pulling permits to change the skirting. It’s too far. There is a benefit to being in the outskirts, being in the county, where it’s just a little more freedom for sure.

Dustin: I’d say, yeah, that’s the perfect part there. I don’t have experience with something really big, but 30 pads. I don’t know, 30 pads seems you can still afford an onsite manager to keep an eye on things and maybe not doing that all that much beyond just going to run errands for you there, keeping an eye on things. 

Still allows you to pay for snow plowing and all the normal operating expenses. It’s still a healthy property there once you get the rents to where they need to be and do all the submetering, infill, and stuff like that. That’s where I’ve lived. That’s my little bubble there.

Andrew: That’s your comfort zone.

Dustin: Everybody’s coming for them now, honestly.

Andrew: It’s getting more competitive for those smaller ones. Under 50 lots used to be where there’s huge opportunity. I still think there’s a huge opportunity under 50 lots. People are catching on for sure.

Dustin: Yeah, 100%.

Andrew: That’s awesome. I would say direct bill, over 100 lots, but I like that. You’re just like, all right, I’ll take my bite size, little 30 lot park that is quiet.

Dustin: They kill it. I don’t know what the scale is. Maybe that scale of killing it is different for everybody, but you do a little bit of value at it. It’s not even that much. You infill a few homes, you raise the rent a little bit, you submeter, and it’s like, whoa, this thing was a dog, now it’s…

Andrew: Yeah, it’s so much better.

Dustin: Yeah, this thing is actually kicking off some cash flow. Everybody’s happy because I’m able to reinvest some in there. I think that’s the secret sauce for me.

Andrew: Awesome, Dustin. What’s the future look like for you and your company? Are you still looking to buy more? Are you looking to take on money from investors? What does that look like?

Dustin: I think focusing this year on optimizing what I’ve got would actually be the best use of my time. That’s where I always go back to. It’s like, what’s the best use of my time? I feel like that’s the limitation for me anyway. It’s just like, boom, I got so many hours to get some stuff done. As soon as I chase the next deal, all that stuff gets put on hold. You know that.

I think this year I’ve got a bunch of homes I want to infill, one of those new parks that has 15 or 16 empty pads. I’ve already got five of them on standby. They’re just sitting there now, waiting to get set up in the spring. I feel like if I could, again, push stuff like that, I think I’m going to get the biggest bang for my time, essentially, there.

In the future, I think you have to reevaluate. I’m pretty much at the point where it’s, like what you said, one of those inflection points where I need to maybe hire out more or figure out a different way of doing things if I want to keep going beyond. Maybe I could do one or two more parks in the current systems I got. 

That’s where I think I’d hesitate a little bit, unless I figured some stuff out. I’m trying to try to figure that out as I go there. I don’t think I have any dream of taking on investors right now anyway. That’s just my latest thought.

Andrew: Yeah, where you’re at with things.

Dustin: I’ll change it tomorrow. I’ll rethink it when I’m walking the dog tonight like, you know what? That’s still my […] here?

Andrew: I totally relate. I grew up with the buy-and-hold mindset. I’m going to buy, I’m going to refi, I’m going to hold these things forever. I’m never going to sell. I think when interest rates are really low, that makes a lot of sense. But as interest rates have gone up, I think it makes more sense to prune off, sell a couple every year, buy a couple of new ones every year to offset the taxes, and just keep moving but keep that threshold of having enough scale where you can have help, but not too much help where you’re trying to hire ahead.

That’s what has been tough for us. I would hire ahead, then all my cash flow was going to payroll, and it was like, wait a minute, I need to have a life here. I need to take my wife on vacation or something. She’s getting mad at me. I got to have more balance.

Dustin: We just talked about vacation. It comes up often in the house here. That’s a big factor.

Andrew: Yeah, you got to enjoy life for sure. Dustin, last question. What is the biggest threat in your eyes to mobile home park investing? 

Dustin: It would be self-inflicted by ourselves as operators. If we just go there and just are off-the-rails with rent raises and stuff like that where it just ruins the reputation there. It’s always been. The way it was taught to me and the way I still operate it, it should be the most affordable, unsubsidized version of housing. It should be and it can be. I think it should continue to be so. That’s why it’s so good.

Everyone who just needs that affordable place to live, you give them all the value of having a yard, a three bedroom, two bath home, parking spot, maybe a garage or whatever right in front of the house, that’s a sweet deal. If we ruin that by just jacking up rents, just getting carried away with it and stuff like that, and try to compete with whatever you want to say, the other markets that are out there, apartments, condos, and stuff like that, I feel like we’ve just probably sheer ourselves on the foot. 

As long as we’re just reasonable with staying the most affordable product in town, I feel like that’s the best thing. I feel like it’s never going away. It should just be here forever at that point there.

Andrew: If people are reasonable with it, it should fend off the extra regulation and stuff. Because it is housing. It’s not a triple net lease on a Starbucks. There are people that live in these things full-time. I agree with you, man. Good feedback there. 

How could listeners get a hold of you or find out about you and your business, Dustin, if they’d like to do so?

Dustin: I’m on all the social media platforms there. LinkedIn, Instagram, Facebook. I’m not on there all that much, but you can definitely get a hold of me. My email is dustin@blazemhc.com. Just send me an email. That’s cool.

Andrew: Cool. I’ll put it in the show notes. Dustin, thanks so much for coming on and sharing your story with us.

Dustin: Thanks, Andrew. I appreciate it.

Andrew: Thanks everybody for tuning in. Have a good day.