Interview with Demetre Booker and Gretchen Zucker of Elevate Commercial

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Welcome back to the Passive Mobile Home Park Investing Podcast, hosted by Andrew Keel. On this episode of the Passive Mobile Home Park Investing Podcast, Andrew talks with Demetre Booker and Gretchen Zucker of Elevate Commercial. The big topic today is “social impact” and “social responsibility” when it comes to mobile home park investing and management. Investing, managing, and operating mobile home parks isn’t just about the property, it’s also about the people. One would argue, it’s mostly about the people. Demetre, Gretchen, and Andrew talk about how to handle non-paying residents, how to look at a deal in a “socially responsible” way, and what “social impact” means for passive mobile home park investors. Demetre and Gretchen also tackle Andrew’s questions on the toughest hurdles they have faced in manufactured housing community ownership, their advice for limited partner investors, and their process of sourcing deals.

Elevate Commercial Investment Group is a real estate firm that focuses on acquiring value-add multifamily assets. They are a full-service, socially responsible, and vertically integrated and has either acquired, partnered, or consulted on over 1,300 work-force housing multi-family units, over 1,400 mobile home park lots, and over 113,000 sq ft of retail and medical office buildings since 2015. Demetre Booker Jr. is the Principal Partner of Elevate Commercial, a full service, socially responsible, and vertically integrated commercial real estate firm. Gretchen Zucker has a career working with social entrepreneurs. She works with around 4,000 entrepreneurs, in over 90 countries to blend profits with social impact.

Andrew Keel is the owner of Keel Team, LLC, a Top 100 Owner of Manufactured Housing Communities with over 2,000 lots under management. His team currently manages over 30 manufactured housing communities across more than ten 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.

Andrew has been featured on some of the Top Podcasts in the manufactured housing space, click here to listen to his most recent interviews: 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 Are you getting value out of this show? If so, please head over to iTunes and leave the show a quick five-star review. I have a goal of hitting over 100 total 5-star reviews by the end of 2021, 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 five-star review of the show.

Talking Points:

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

01:51 – Demetre’s story and journey into manufactured housing

03:30 – Gretchen’s story and how she met Demetre

05:15 – What “social impact” means for mobile home parks

07:01 – The toughest hurdle

09:07 – The management of their parks

10:41 – Sourcing deals

11:48 – The most important thing LP’s need to look out for prior to making an investment

17:52 – Examples of being socially responsible when managing MHP’s

21:53 – How to handle a non-paying resident

24:07 – Their perfect mobile home park

25:30 – Esusu, Till, and PayLease

29:40 – Common mistakes new investors make

32:48 – The toughest time for real estate

38:29 – Getting a hold of Gretchen and Demetre

39:07 – Conclusion


Links & Mentions from This Episode:

Elevate Commercial:




Keel Team’s Official Website:

Andrew Keel’s Official Website:

Andrew Keel LinkedIn:

Andrew Keel Facebook Page:…

Andrew Keel Instagram Page:…

Twitter: @MHPinvestors


Andrew: Welcome to the Passive Mobile Home Park Investing podcast. This is your host, Andrew Keel. Today, we have a couple of amazing guests in Mr. Demetre Booker and Gretchen Zucker of ELEVATe Commercial.

Before we dive in, I want to ask a real quick favor. Would you mind taking an extra 30 seconds and heading over to iTunes to rate this podcast with five stars? This helps us get more listeners and it means the absolute world to me. Thanks for making my day with that five-star review of the show. All right, let’s dive in.

ELEVATe Commercial is a full-service, socially responsible, and vertically integrated commercial real estate firm. Since 2015, the firm has either acquired, partnered, and/or consulted on over 1300 workforce housing multifamily units, over 1400 mobile home park lots, over 113,000 square feet of retail, and a medical office building.

Demetre previously served as the Director of Acquisitions for Comunidad Realty Partners and was directly involved in the acquisition and disposition of over 2000 multifamily units. Gretchen has a career working with social entrepreneurs, and she works with around 4000 entrepreneurs in over 90 countries. Demetre and Gretchen, welcome to the show.

Demetre: Thank you. Thanks for having us.

Andrew: Happy to dive in here. Demetre, maybe we can start with you. Can you tell us about your story and how you got into manufactured housing?

Demetre: Andrew, my path to this industry was unique. I’m from a middle-class family in Fresno, California. I went to Cal Poly in San Luis Obispo. During college, I started buying and investing in commercial real estate. Fast forward, like you said, I cut my teeth running acquisitions for Comunidad Realty Partners.

Through a conference that we’re at, Scott Scheel’s conference, I met a gentleman by the name of Jeremiah Boucher. I spoke on stage about what I did in the multifamily world. Jeremiah pulled me aside and said, hey, I need your advice on my portfolio, can you fly to Vegas and come look at what we’re doing? During that engagement, I was blown away by the opportunity in the MH space. I initially started off by consulting Jeremiah on his deals as far as structuring his portfolio to sell, and then we partnered up on a deal.

From there, it led to a second deal. From there, we’re off and running. We learned the nuances of the industry and applied all the best practices for multifamily and workforce housing. Here we are today, a clear focus on scaling in this industry.

Andrew: That is fantastic. That’s how we met was at Scott Scheel’s Commercial Academy. The diamond inner circle there. That is really awesome. I’m going to have to get Jeremiah on the show. I think he could add a lot of value. Stay tuned for a future episode with him. Gretchen, maybe you can give us a little bit of your story and how you and Demetre ended up partnering together.

Gretchen: I think we should put on an advertisement for Scott Scheel’s Commercial Academy because that’s how I met Demetre. I was at Scott Scheel’s Commercial Academy event. What really attracted me to Demetre and his mobile home park and other investing is his socially responsible approach. My experience working with social entrepreneurs seems a natural fit with Demetre’s vision.

I think, through this network of these amazing social entrepreneurs and all their innovative approaches to solving many of our problems in the world, we can bring a lot of really powerful ideas that can have a real impact on the lives of our mobile home park residents. That’s the initial idea that brought Demetre and me together. We’ve started experimenting already in several mobile home parks.

The plan is that we’ll continue to grow and grow, learn, and really engage our residents in being leaders together with us in uplifting these communities. Through the uplifting of these communities, frankly, also providing a really good return to our investors. They get a financial return, in part because of the impact, but they also get an impact or social return, which I think is increasingly appealing to investors in all asset classes.

Andrew: Definitely, that’s fantastic. What are some examples of that social impact?

Gretchen: What we’ve learned in mobile home parks, generally—and we’re still learning, obviously—is that people end up living in these communities for a long time, but they haven’t necessarily envisioned that they would be long-term residents in these communities. It feels transient, if not in actuality, in people’s mindsets.

Just being invested in your community and really wanting to build a community of people, and to make your neighborhood look beautiful and be a place that you’re really proud of is not naturally there, at least in the mobile home parks where we’ve been working.

One of the first things that we’ve been doing is bringing the community together to really get to know each other as neighbors and to become invested in the community. An example of what we just did recently, which was a ton of fun both for the investors like me, as well as for the residents themselves is we brought a whole bunch of residents together with investors, ELEVATe staff, and Ashoka fellow with social entrepreneurs organization called YouthBuild.

We beautified about eight homes in one of our mobile home parks. The residents were painting each other’s homes alongside these YouthBuild apprentices in the construction industry. They had never met each other before and they were painting each other’s homes side by side. That’s just one example of starting to foster a sense of community.

Andrew: I love that. That’s really awesome. Wow, very cool. A different look on the business entirely. I’ll just throw this question out there and you guys can take it. What has been the toughest hurdle for you both thus far in the business?

Demetre: The toughest hurdle has been cultivating talent from the onsite management position. Coming from a multifamily background, you have established management companies. Were in MH space, you’re better off forming your own management company, which means you build the infrastructure around it, and then you’re seeking out the best talent. There are not many mobile home park managers, onsite managers walking around besides who’s on your site when you buy the property.

There’s a factor of risk management, best practices, what are the pros and cons of that person, their skill sets, their financial literacy, et cetera. We empower our managers to be involved and understand our social impact platform, but also, there’s the basic blocking and tackling that you have to do. We try to provide as much support around our managers. The key is finding the right talent to fit the role, and then we can coach and build around them.

Andrew: Spoken like a true ex-football player. I did notice the analogy. Demetre did play quarterback and some corner at Cal Poly back in the day.

Demetre: Yeah, quarterback and safety.

Andrew: Safety? Okay, awesome. Very cool.

Gretchen: Sorry. I’ll just add that Demetre sets up—we have a site call for each site and we do offense and then we do defense.

Demetre: Special teams.

Gretchen: Special teams, exactly.

Demetre: Those are title trackers.

Gretchen: It goes through all of our offensive players, then the defensive players, and then special teams.

Andrew: I love that. That is so cool. I played football in college as well. I’m a huge fan of the football analogies.

Demetre: Offense is income, defense is expenses, which is just as important, and then special teams are all your intangibles—selling homes, leasing, title, service, et cetera.

Andrew: Love that. That’s the first time I’ve heard of that. Very cool. The management of your parks, how do you all do that? How long have you been managing communities? Tell us about your team, how that’s been going, and how you’ve been successful with it.

Demetre: The first park we managed was a partnership with Patriot Parks. We took over management the first few weeks of ownership and we learned the business. How we developed our management culture and system since is a high emphasis on resident communication as far as the message. Gretchen and her team are heavily involved with messaging.

Number two, our investors are heavily involved. Typically, someone from our team is at the site every two, three weeks. We have a lot of site visits, a lot of support. We’re constantly doing team syncs for each property every week that we get on. Our whole asset management team is on including myself, the onsite manager, and maintenance technicians, whether they’re a contractor or employee. That’s the system of management that we have in place as far as operating properties.

Andrew: That’s great that you’re getting on-site so often. I think that’s a huge value to the communities just to see what’s going on. Having boots on the ground, there’s no replacement for that. I’ve seen that firsthand. When did you buy your first community? What year was that again?

Demetre: That was in 2016, 2017.

Andrew: Awesome, very cool. How do you typically source your mobile home park deals?

Demetre: Some stuff is obvious and we have a secret sauce. There are three main ways that we source deals. One is the local real estate eviction attorneys that we work with. They typically know a lot of the park owners. Occasionally, we’ll get off-market deals from brokers.

A third source, which has been our bread and butter, is the mobile home park movers. We built relationships with a lot of the movers. Obviously, your movers in house, but we both relate with movers. From there, we make sure that we communicate well and build relationships because they’re talking to the property owners.

Then a fourth, which is a quasi-movers, are vendors. Vendor’s skirting, siding. Typically, those vendors are servicing the other parks nearby. We try to build relationships through the vendors to talk to the other property owners.

Andrew: Awesome. Definitely not your run-of-the-mill ways of finding deals. I love that. It’s creative. Tell me this, a lot of our listeners are passive investors, just strictly limited partners. If you were talking to a passive investor that has not invested in the mobile home park space yet, what would you tell them are the most important things that they need to look out for prior to making an investment?

Demetre: I’d love for Gretchen to share her feedback, and then I’ll have a few comments also.

Gretchen: As a passive investor, I think the biggest thing, at least for me, is the quality of the management team that’s really going to be operating the mobile home park. What their track record is, whether they are personally invested in the asset themselves.

I certainly look at the financials. I spent a lot of time looking at the financial model for each investment that I do. But I’m also really interested to know, overall, what the market is looking like, how this park is going to operate 5, 10 years from now, to the extent that you can really forecast what job growth is going to look like, population growth, et cetera.

It’s very aligned with the same factors that the operator itself would be evaluating as they’re looking to buy the park. The more that you can align so that you’re doing this together as partners, I think the more successful it will be. I think what makes ELEVATe unique is the opportunity for investors like me to be personally involved. I think one thing in particular about Demetre is that every passive investor should want to work with Demetre, in part because of the opportunity to learn from Demetre.

How you manage to have time for everyone is amazing. Of course, I’ll have to say that the social impact specifically of ELEVATe, I think, is clearly really important to me, but I think it’s been really important to all of our investors too. They want to feel like this investment is doing more than just making money. It’s making good money, but it’s also having a real impact on real people’s lives.

I think sometimes we forget about that when we’re evaluating deals or thinking about investing in property. You think of just owning the land or the infrastructure, but you forget the people who were there. ELEVATe does not forget the people. They’re really central to what we do. Which by the way, going back to the site management and all of our management positions, all the staffing positions, the mission is a key part of attracting and retaining the right kind of talent.

Entrepreneurial problem solvers with good people skills, empathy skills—all of that is what you want in your talent. I think we’re able to attract that talent, in large part because of the mission.

Andrew: That’s wonderful. That’s really wonderful. I want to circle back and talk more about the socially responsible approach and that mission. Demetre, if you could touch on what your advice for passive investors would be, that would be awesome.

Demetre: I’ll piggyback on what Gretchen shared. I’ve noticed a lot of investors are looking at depreciation nowadays. The opportunity of the benefit of cost segregation will lead to depreciation benefits for the investors. Number one, just be aware of the business plan. If that property’s going to be sold in two or three years, think about the recapture of that depreciation.

Number two, understand that if you’re going to invest, make sure that it’s not about increasing rents by $100 and displacing people. Look at the mission of the group. Can they achieve the returns that you’re looking for without displacing families? Because in some cases, 30%, 40% increases in rents that we see where we have an internal mandate to where we don’t have to increase rents anywhere near that, but we still hit the same returns or better, and then we’re getting better pricing from our lenders Fannie Mae and whatnot.

There are some benefits to adding a social impact component to what you do. The third thing is understanding the property itself. The rule of thumb that we do is we say, hey, in that immediate market, for the price of a mobile home, if we have a mobile home that’s selling for $30,000, our single family homes in the area are selling for $300,000. Our target is what we call a sweet deal is 10X.

If single family homes are selling for 10 times the price of a mobile home, I think we have some traction there. You usually have a very high demand for people wanting to buy homes, whether it’s a lease option or buy cash. We’ve been advancing and adjusting our model internally of our deal selection based on the target market. Is there a market for people to buy a home?

The fifth thing is, what is the business plan? If there’s a property that’s 50% occupied, there’s usually a reason why. There are very few operators like you, Andrew, that could fill up a park like that. Understand your operator and their capacity to fill lots because it’s not as simple as multifamily.

When someone says, hey, my business plan is to go from 50% to 100% in one year, it’s not realistic in most cases unless it’s a market where you can bring in brand new homes and used homes and sell them for a premium. But if it’s a market where you’re losing money per home, you may want to look at that business plan is not feasible.

Andrew: That’s great advice. I agree. I think one thing you both touched on is just the quality of the management team, the quality of the operator. What’s their track record tell you? That’s something that has resonated across all of our interviews as the most important factor. I think that’s cool that I didn’t even give you that hint and that’s what you came up with.

Let’s circle back and talk about that socially responsible approach and maybe you can just add a couple more examples. I know you mentioned the limits on your rent increases. I think that’s really cool. Maybe you can just tell us a little bit more of how you add that value without displacing families.

Demetre: I’m going to let Gretchen run with it because she could take the rest of 30 minutes. She has a lot of good stuff that we do.

Gretchen: Rachel, by the way, is one of our other investors who has been a huge adviser for us. The idea is really about helping our residents to develop agency so that they can take initiative, they can have more control of their lives and impact on each other’s lives. Part of it, as I mentioned before, is increasing the sense of community and investment in the community. Part of it is really empowering our residents.

Another example of what we’ll be working on is having the kids design a playground, and then the community actually builds the playground. It’s a shared thing that we’re creating together and then we get to see the result of what we’ve done. We are also working on just financial stability for our residents. This colleague of ours I mentioned has been very influential. She wrote a book called The Financial Diaries that I would highly recommend if you’re interested in what the lives are like of people who live in mobile home parks.

One of the biggest challenges that residents have is that their income will spike and dip. It’s very uneven (the income), and the same with expenses. It makes it really hard then to manage your monthly bills if your income keeps going up and down and your expenses are going up and down. We are looking at ways to help them smooth out their expenses. One way is by working with our residents to develop rent payment programs that work for them.

There are a number of services started by other social entrepreneurs that I think are really promising. We’re working currently with Till and Esusu. We’re also talking with a company called Circa. This is really addressing the problem that most renters have, which is that their biggest bill is their rent and their rent is due at the first of the month when they have the least amount of money in their bank account. What these platforms do is they really help residents break their rent expenses into more bite-sized chunks that allow them to be able to stay on top of those bills.

We are going to go into setting up saving circles, some ways for residents to save money by working together collectively. Other programs, I think will help with their financial well-being, which obviously is going to make them a better tenant for us.

We talked a bit about their mindset as changemakers, about financial stability. We’re also looking at ways to support their financial mobility so that they’re able to increase their income over time. There are amazing opportunities out there that they probably never heard of that would provide different ways for them to augment their income or upskill their skill set to have better-paying jobs. That’s part of the equation, and health and well-being as well.

There are, again, amazing programs that can really support residents’ mental and physical health. It’s just a matter of connecting the dots and making this available.

Andrew: That is so cool.

Gretchen: The idea is that there’ll be change agents who can make the overall community better and their own lives better and help create a thriving community.

Andrew: I love how you guys lead with that. It’s a huge differentiator. Kudos to both of you. How would you handle a non-paying resident? I know you have some programs. You’re working with the residents. How do you all handle that? Do you evict or do you not allow that?

Demetre: Andrew, that’s a good question. We try within our power not to evict a resident. There have been a few evictions and it hurts each one. It’s tough to deal with. Our mitigation against eviction is, again, we’re the first mobile home park community operator to have the rental assistance through Esusu and Till. That’s a major, major breakthrough because it took some time to get them to commit to the industry because we’re predominantly multifamily. That was a breakthrough that other operators may be able to use now that we open up the doors, or they open the doors for us.

Number two, we often reach out. This is partners, not just myself, but Gretchen and other partners will reach out to severe delinquent residents and work out solutions. Often, it’s through a payment plan or, again, Esusu and Till; or B, there’s a lot of skilled labor in these communities. We look at ways if they’re underemployed to employ them temporarily, to support them, to involve with our culture, with our team. Therefore, they can go back into the workforce.

During that time frame, they can actually do work for us at our properties, rather mowing lawns at vacant lots or helping clean up the communities. Therefore, there’s a sense of dignity. Half their money goes towards their rent, half goes to their pockets. They could pay their bills. We provide the financial stability to get them back on track. We know there are going to be setbacks along the way. We collectively look to find ways to keep our residents employed or give them opportunities within our community to get back on track.

Andrew: That’s very cool. Before we move on from this, what was the name? Is it Esusu and Till? Is that what it was called?

Demetre: Yes.

Andrew: Okay. I’ll make sure to get the links to those and put them in the show notes because I think that’s a cool tip other operators will want to use. Tell us this, what does the perfect mobile home park look like and why?

Demetre: None of them are perfect. When we consider using football’s analogy, a five-star recruit. When we look for a five-star recruit, we’re looking for opportunities on the coast, 100+ lots. There’s a property in Southern California that we’re chasing. It’s the 5 freeway in Southern California, west of the 5 is beach. It’s west to the 5, it’s sizable. It’s over 120 lots. It has curbs, gutters, and sidewalks. You’re dealing with a very decent class of residents. That’s what we call the holy grail or five-star recruit. Those are the unicorns that we go after. Public utilities, we want public sewer, public water.

Then our other five-star recruits are just resort areas that may not have all the bells and whistles, but there are resort areas where the affordability is less than 5%. We call that our five stars because we collect rent in those parks without increasing rents significantly, and they’re a lot easier to operate.

Andrew: Definitely. Gretchen, do you have any comments on that?

Gretchen: No, just quickly about Esusu because you’re going to put that link. I think it’s also valuable to know a little bit more about that. So just very briefly, Esusu is a credit reporting platform. Every time our residents pay their rent on time, that’s reported to the credit bureaus, which allows our residents to increase their credit score. I think on average, they’re able to help residents increase their credit score by about 170 points or so. That’s very meaningful for our residents.

They also provide zero-interest loans for up to three months’ worth of rent with a […] repayment plan in case residents have a financial emergency. We have triggered that with a couple of our residents so far. We can’t keep going back to Esusu for loans. They really need to work on their financial stability.

You learn this when you study people living on the edge of poverty, that one broken-down car will set you on a path of further impoverishing you. It’s a downward cycle. That’s what Esusu is trying to do is to avoid that downward cycle for residents, and they pay the landlord directly. We get up to three months of rent in our bank account, and then Esusu will work with the resident to help them with that repayment plan, which then turns into an Esusu savings plan. After they repay their rent, they can keep going and it becomes a savings vehicle for the resident.

Andrew: That is really cool.

Gretchen: It’s this […] financial services in particular for the generally unbanked or underbanked population, but I think it’s tremendously exciting. It’s a win-win for our residents and for landlords.

Andrew: I really like that. We use PayLease, which integrates with Rent Manager. PayLease has an option where the residents can subscribe to get positive credit reporting. It doesn’t report any negatives, it only reports the positives. However, most residents don’t opt-in. We did an initiative and handout to a lot of our residents, and they didn’t opt into that. There’s no real downside.

I think the other thing is a lot of our residents, for whatever reason, don’t have bank accounts. What we found out is a lot of it is either passed to child support or other garnishing of wages that is preventing them from doing that. That might not be a solution for that resident, but I think it’s really cool, especially the 0% interest loan option. That’s a very cool initiative.

Gretchen: Yeah. Underbanked poor families are a huge problem, the dearth of financial services. Happily, there are some disruptors who are getting into the space. I think that that’s going to wield some great, less expensive—for poor people, they spend up to 10% of their income just using their income.

Andrew: Cashing checks and so forth.

Gretchen: It’s crazy how expensive it is to be poor. That’s where the social entrepreneurs coming into the space could add real value, that of course then helps our tenants be better tenants. It’s very exciting. You could consider having the residents opt-out instead of opting in to credit reporting. There’s another book I would recommend for anyone working in a mobile home park.

Andrew: We did look into that because I remember in the state of Florida with your driver’s license, you’re automatically an organ donor unless you opt-out. The percentages were way higher, but the way that the software is set up, it wouldn’t.

Gretchen: I guess it depends on what provider you’re working with. You should certainly look at the laws in that particular state, which the service providers can look at too.

Andrew: Totally. Very cool. Let’s jump back in here. I will put that link to Esusu in the show notes because I definitely want to look at that myself. What common mistakes do new operators make in the space, maybe on performance or so forth? I know I made many when I first started, but I think this would be good to talk on for investors interested in maybe investing with a newer operator.

Demetre: The number one mistake that I see, and I made this mistake also, is budgeting for new lots to fill lots. What it costs to improve your infrastructure, move a mobile home, remodel the mobile home if it’s used or buying a new mobile home. There’s a lot of costs to the infrastructure. Before you buy a property, understand that within that state or jurisdiction, is it concrete pads, is it concrete runners, is it post and piers as far as your foundation to hold the home? Because you’re responsible for providing the foundation.

But also, you’re responsible for providing utilities and particularly the electricity, which the meter boxes can be very expensive. I just see these operators are underestimating—including myself at first—the cost to fill a lot. You have to make sure that your budget is correct, and you understand what you’re getting into.

Andrew: Do you have a ballpark number you use to fill a vacant lot?

Demetre: Yeah, if it’s a concrete pad, just to get the lot prepared for a home to be there, we budget for about $15,000 now. That’s for concrete pads. Concrete runners were about $10,000, that’s including moving the home. That’s not even the physical home, but moving the utilities, skirting—all the bells and whistles. $15,000 for concrete pads, $10,000 for runners, post, and piers about $8000. That’s what we’re seeing just to prep the lots. That’s just factoring hit or misses on electricity because of the conduit and whatnot.

Andrew: Sure. Yeah, that’s expensive. I’m sure a lot of your parks are unlike the Pacific Northwest, right?

Demetre: They’re over Idaho, Ohio, Pennsylvania.

Andrew: Okay, got you. Gretchen, have you what other mistakes do you see that new operators make?

Gretchen: Demetre doesn’t make any mistakes. I would say one thing that we’ve learned, which is a valuable lesson that we can share, is there’s a temptation to hire family members of your employees. Really think twice before you do it. My husband or my cousin would be great for this job and you want to be supportive, and then I think we’ve realized that we’re better off just really doing our due diligence in our search and selection of all of our staff members to make sure we really have the best people for the job.

Andrew: Definitely. That’s a big deal, for sure. I’ll ask you both this question. When was the toughest time for the mobile home park industry and why (that you both are aware of)?

Demetre: That’s a great question. I think the toughest time is on the horizon. The toughest time is obviously when the market churns because this resident base has the most vulnerability or the biggest risk as far as paying the rent, and life changes. Just in general, whenever there’s a churn in the market, being prepared and understanding your resident base that your delinquency may not be 2%, 3%, it may increase.

Just being aware of it, planning for it, and making sure that you qualify your residents properly. You measure twice cut once on leasing spaces because it really is taking the mortgage back that I have into the equation. It’s important to understand what your resident base income is and the opportunities around for job mobility. The bottom line is when the market churns and defaults increase.

I’ve lived through it earlier on in my career. It wasn’t in mobile home communities, but it was in multifamily. When the market churns and people are defaulting, if you don’t have any pro forma or your stress test, you’re in trouble.

Andrew: You did mention, you think the toughest times are ahead. Maybe you can shed a little light on what you think specifically, mobile home parks, what headwinds they’re going to face?

Demetre: Most of these pro formas that I see where they’re looking at substantial rent growth year over year, it comes to a point, yes, we’re more resilient because compared to multifamily rental rates, typically, it’s less than 50% in some cases. But you got to be aware. If you’re buying in areas where your mobile home park lot rents are near your apartment rents, when the market churns, you’re going to have some trouble.

We try to tell people to be aware of what’s on the horizon because there will be higher defaults. Also, we want to make sure that you’re buying or investing in communities where their markets where apartment rents might be three times a lot rent. Therefore, you’re more resilient if there’s a change in the market. You have to maintain rents and you have stable growth and rents or no growth. I just think, we pro forma to a one-time rent increase and then a 3% annual increase. That’s our pro forma.

If our deals produce the multiple that our investors are looking for, and the pref, they are happy, that’s our way of being resilient for the market. We may do 4% or 5%, but our mandate is 3% rent growth. That’s what we’re banking on. I see a lot of pro formas where there’s a $100 rent increase, year one or year two, and then year three is $25 a year. The next thing you know, your rent’s doubled in two years. I just don’t see that being sustainable because historically, we haven’t seen rent growth like that.

Andrew: Definitely. Thank you for sharing that. Gretchen, did you have any insights into the mobile home community industry? A lot of people have brought up when Green Tree back in the ‘90s, when they were a lender on mobile homes, how they went under, there were a lot of homes being pulled out of parks, and parks being repoed. I’ve heard that that was one of the tougher times in the industry. I didn’t own communities during the Great Recession. I’ve tried to talk to people that did and learned from them.

As you mentioned, those stress test factors, what are some of those? Do you pro forma for 60% collections? Is that too aggressive? It’s a lot different from multifamily, I’m sure.

Gretchen: I think also looking at loan to value, what that ratio is something else. So not taking on too much debt. Art is as good debt that you’re taking on. We’ve been generally aiming for agency debt. I think Fannie Mae has been a great partner for us. I think they’re quite invested. In fact, looking to us to support them with their social impact goals as an agency.

The one thing I would add is that I totally believe that manufactured housing is one of our solutions as a society for how to have more affordable housing. At the same time, my worry is that the cost of manufactured housing is going up too. It’s obviously still significantly less expensive than site-built homes. I think that there’s a very strong future for manufactured housing.

There’s actually a social entrepreneur who’s gotten double-wide manufactured homes with a front porch. That’s not considered real property, which I think is a big advancement to have a HUD code to make that real property. You can get a mortgage for that. That is totally unnecessary component of having more affordable housing in the US. But I do worry that even manufactured housing is getting more expensive. That’s probably my biggest worry.

Andrew: Those are very valid points. I think the other thing would be headwinds regulatory-wise with rent control and some other just change in policies that we could be facing. Wow, we’ve run a little long on this episode. I’m so thankful for your time. If listeners would like to get a hold of both of you, what would be the best way for them to do so?

Demetre: I’ll take the lead. We could share our information in the chat, our email or mobile numbers, so they could call us or email us directly.

Andrew: Perfect. Yeah, we’ll put those in the show notes. What is your website, Demetre?

Demetre: It’s We’ll share it with you in the chat.

Andrew: Perfect. Awesome. Thank you both, Demetre and Gretchen, for all of your insights. I love the social impact, that look at the business, and getting rid of the stigma of trailer parks. Because as new operators come in and improve these communities, it makes them better. Again, like you mentioned, Gretchen, it improves the supply of affordable housing, which I think we need desperately.

Thanks again, both of you. That’s it for today, folks. Thank you all so much for tuning in.

Demetre: Thank you.

Andrew is a passionate commercial real estate investor, husband, father and fitness fanatic. His specialty is in acquiring and operating manufactured housing communities. Visit for more details on Andrew's story.

Keel Team provides unique opportunities for passive investors to enter the mobile home park asset class without having to deal with the headaches of tenants, toilets or trash.


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