• Case Studies
  • News

Interview with Dylan Marma of The Requity Group

Listen on Apple Podcast here: https://podcasts.apple.com/us/podcast/interview-with-dylan-marma-of-the-requity-group/id1520681893?i=1000515955237


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 Dylan Marma of The Requity Group. Today, Dylan gives you his unique take on taking over and converting park owned mobile home communities. Dylan also gives his advice for new passive investors and what they should look out for when diving into the manufactured housing community asset class. Andrew and Dylan take a look to the future of mobile home parks and discuss what makes The Requity Group different from other real estate investment companies.

Dylan is a principal of The Requity Group, a vertically-integrated real estate investment company focused around the acquisition and operation of mobile home parks and multi-family real estate. He also manages investor communications, acquisitions, and plays a very active role within TRG Living, the in-house property management company. He has had over six years of real estate investing experience and he has been the lead sponsor or JV partner on $60 million in real estate transactions. In 2020 Dylan received his CCIM designation and is an active member of the Florida West Coast District.

Andrew Keel is the owner of Keel Team, LLC, a Top 100 Owner of Manufactured Housing Communities with over 1,500 lots under management. His team currently manages over 20 manufactured housing communities across more than ten states – AR, GA, IA, IL, IN, MN, NE, OH, PA and TN. 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: 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.

Would you like to see 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

01:37​ – Dylan’s story and how he got into Manufactured housing communities

05:54​ – Taking over and converting park owned home communities

13:05​ – What are the most important things passive investors (LP’s) need to look out for when investing into MHP’s?

16:21​ – Example evaluation tool that an LP could use

17:39​ – Expense ratio for park-owned homes

18:57​ – Dylan’s perfect mobile home park

20:05​ – The hurdles the mobile home industry faces moving forward

21:32​ – The value proposition at Requity and what makes them different

22:36​ – Getting a hold of Dylan

23:08​ – Conclusion


Links & Mentions from This Episode:

Requity Group: https://therequitygroup.com/

Dylan Marma, LinkedIn: https://www.linkedin.com/in/dylanmarma/

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/PassiveMHPin

Andrew Keel Instagram Page: https://www.instagram.com/passivemhpi

Twitter: @MHPinvestors


Andrew: Welcome to The Passive Mobile Home Park Investing podcast. This is your host, Andrew Keel. Today, we have an amazing guest and an up-and-comer in the mobile home park space in Mr. Dylan Marma.

Before we dive in, I wanted to ask you a quick favor. Would you mind taking an extra 30 seconds and heading over to iTunes to rate this podcast with 5 stars? This helps us get more listeners and it means the absolute world for me. Thank you for taking the time to do that.

All right, let’s dive in. Dylan is the principal of The Requity Group, a vertically-integrated real estate investment company focused around the acquisition and operation of mobile home parks, and multifamily real estate. He has been a principal on over $60 million in real estate transactions over the last 5 years. He has been featured on dozens of podcasts and has spent over 100 hours consulting commercial real estate investors. He is also a CCIM designee and a member of the Florida West Coast Chapter. One thing I learned about Dylan that I thought was amazing is that he dropped out of college after just two years to get started building his business.

Dylan, we’re really excited to have you. Welcome to the show.

Dylan: Thanks for having me, Andrew. I’m excited to be here.

Andrew: Awesome. Maybe you can start out by telling our listeners about your story and how you eventually got into manufactured housing.

Dylan: You hit on the start of it. To start it off, I grew up in Upstate New York and went to school in Upstate New York, City of Albany. After about two years of going to school for accounting I got to a point where I had been raised my whole life to go the corporate route. I had a lot of family that were working on Wall Street or in finance, and I was following in their footsteps.

I had that moment, which I believe many of us entrepreneurs have, where we decide that we want to go against the grain and take a different route. I had spent a lot of time diving into the real estate books and all kinds of personal development at that time. Eventually made the decision to take a big risk, which was to leave school, to move across the country to sunny San Diego, buying a one-way ticket with the pursuit of becoming a real estate investor.

Not having a job lined up, but fortunately, I was able to work my way into real estate investing in an education company. I got my foot in the door there and climbed the ranks in a nice W-2 position. I was able to save up some money, start buying my first rental properties, and getting a taste of cash flow, investing, and a lot of great mentors around me in that position.

Come a certain moment, after say three years of work in a W-2 role, I made the decision to take my entrepreneurial journey to the next level and start pursuing multifamily and multifamily syndication. I dove into that, starting off at 21 units with a few buddies of mine and a little bit of whatever money I had saved up at the time, and really got a good feel for multifamily. I really got a good sense of the lifestyle, that the vehicle of multifamily investing could create for me. It’s something that I think just resonates really well with my personality type.

I was fortunate to find a few partners and we started to go out and invest in a multifamily syndicate. We syndicated about 500 units or so and then did about 250 doors of direct investments along the way in apartments. That was all up until the beginning of last year.

As of the beginning of last year, I hit a point where I felt that the return profile of multifamily was getting worse in a sense. It started to put my head on a swivel a little bit more to see what else is out there, because (I think) at the end of the day, it’s all about what’s going to yield us as investors the best risk-adjusted return.

I had a light bulb moment that I believe that many people have. I’m sure many of your listeners have, just listening to your show. When I got to see the risk of a quality mobile home community versus an apartment complex—I saw that the average lifespan instead of being 50% turnover each year you might have somewhere between 5% to 10% turnover each year—I saw the fact that there’s a lot less operational risk at the put when you have a community as all tenant-owned homes. I saw that you have very good collections and overall just a lot of increasing demand towards the asset class.

When I had that light bulb moment I started to pursue the space, and fortunately linked up with a great partner who had many years of experience—Charles, who was on your show not too long ago, I believe. We started pursuing deals together and started off with a 163-lot, heavy park-owned home community out in North Carolina. We launched a fund together and we are currently on our third acquisition of the fund under the name of TRG Founders Fund. So far, it’s been a great journey.

Andrew: Wow, what a start. You started out with 163 lots and majority park-own homes?

Dylan: Yeah, 140 out of 163.

Andrew: A hundred and forty park-owned homes. Let’s talk about that for a minute. Maybe you can talk to the listeners about your plan to convert park-owned home communities. Many operators are scared and won’t touch these parks, and I think there’s a good opportunity there, because especially at a time like today where we just went to order some new manufactured homes from the factory and they told us that we’re 6–8 months out.

I think it’s attractive that you got homes on lots. It’s just a process to convert them to tenant-owned homes. What makes these parks attractive to you guys and what’s your plan to convert them?

Dylan: There are a few things that make them attractive, and I’ll start with just some more of the situations that we deal with in the present day environment. It’s just like you mentioned. Right now, manufactures are backlogged and the cost of what used to be probably a new home at $35,000, that might be $45,000–$50,000 before we know it. I think the value in older homes is going to be going up because you can’t replace them anymore at the price that you used to be able to replace them. You have that.

The lending environment that we’re in, there are a few different lenders and banks out there that are starting to provide more attractive financing options to park-owned homes that were not previously available. I know in a lot of the old teachings on mobile homes, and I think it was widely used as a negotiating tool on park-owned home deals, that the banks went on the home, so we can’t count that towards the purchase price or the leverage that we’re going to get. That’s solely not becoming the case and (I think) hopefully, it continues to move in that direction.

When you look at it from just more of a macro perspective, I’m not here to advocate that park-owned homes are better than tenant-owned homes. We all want to be in tenant-owned homes. That’s the mecca. That’s what I just talked about of having lower turnover, easier management, you have a part-time community manager, no maintenance guys. It’s great.

But we’re in a very competitive environment. As the demand continues from investors—a lot of institutional money flows into this market—a lot of the low-hanging fruit is gone. You have to pick your poison, and you have to choose which one of the headaches you’re going to deal with when it comes to finding value-add opportunities, to be able to create outsized returns.

With park-owned homes, I came from running apartment complexes, and we had in-house property management—my former company. I’m used to those headaches, let’s say. I was used to the turnover, so none of that really intimidated me very much because it was nothing outside of the norm.

When I could see a deal that was doing, say you’re talking about a deal that’s $35,000 a door, we’ll say with rents that are $750 or $800, if you look at that as an apartment complex, you do that every day of the week. Every apartment operator wants that because that means very high cash flow, double-digit cash flow, attractive yields, and whatnot. When I started to connect those dots and see those numbers, it started to make a lot of sense. Seeing that kind of cash flow going in can give you a lot of comfort and stability. But you do have to be ready to deal with the management side of it.

What I really like in a park home community is having scale. Just like with apartment complexes, I don’t want to go and buy a 20-unit apartment complex halfway across the country. I can’t afford a full-time manager, I can’t afford any full-time maintenance guys, so who’s going to be doing all the work? I’m […] managing much like a handyman trying to do his return. It’s going to be an absolute nightmare.

The way to get into park-owned homes (I think) is the same way. You want at least 100+ park-owned homes. When you have 100+ park-owned homes, you can staff the property with a community manager that’s full-time, constantly leasing, constantly marketing, and handling that side of the business. In addition, you can have full-time maintenance guys.

On the one we just referenced with 140 park-owned homes, we actually went in and started off a total of four full-time maintenance guys. I think it’s going to end up being three full-time maintenance guys. We have an insane crew. In that community right now we have 3 vacant units total out of 163. We have 7 units here that we’re expecting to turn over, 50% turnover, but we’re leasing them up before these units are even rent-ready. As soon as someone’s moving out, we’re getting them leased up.

We’re able to run a tight ship because we have a crew that can operate well, that can do quick turns, and that can lease the property well. If you’ll do that you have the cash flow coming in. You have a very strong double-digit cash flow in this environment, and then you still have the value-add component to it of being able to convert them into tenant-owned homes

There are a number of ways to go about doing this. I think everyone has their own strategy. With the used homes, it’s hard to get a lot of cash sales. Depending on the age of the homes, if you want to fire sale the homes that’s one thing, but a lot of $15,000–$20,000 homes are hard to cash sale. We have had them coming in, which is great, but more often than not, you got to find a different strategy.

A lot of the banks, like 21st Mortgage, don’t finance the lower-priced used homes like the $10,000–$15,000 homes, so you’re going to struggle to get them financed. That leaves you with thinking about an alternative, which we have a sort of a rent credit-type of a program where they have a rent-to-own program, where they can go in and make some level of a down payment, and then pay that off over time by having a portion of their day-to-day rent credited towards the paid out of the home. So over a five-year time period, they can assume ownership and transfer title to the property. It’s definitely a long-term play, but the upside is really good.

Andrew: Definitely. Maybe you could share with us how much, on average, one of those $10,000–$15,000 used homes rents for that first property.

Dylan: On that property, we are renting for around $800–$900 […] pushing beyond that, so we’re getting pretty […]. That includes the portion that’s going towards the lot rent, but we have (I believe) $375 for the lot rent and the remainder is going towards the actual home rent. One other time you’ll see the 50% goes towards the lot rent, 50% goes to the home rent. That’s what we’re doing in that case.

Andrew: Wow. That makes a lot of sense talking about the scale of it and being able to afford the personnel. I think it’s just a different model. It’s a little more management-intensive, but if you’re able to slowly turn it into a tenant-owned home community, you can create some great cash flow along the way. That’s fantastic.

What are the most important things that passive investors (LPs) need to look out for when investing into mobile home parks?

Dylan: I’m a big believer in even as an LP it’s your responsibility to know the numbers. At least at a very base level, you should be able to review someone’s assumptions and underwriting, and start to form your own opinion and perspective of how they’re going to […] in the deal. The easiest way to do that is to look at other operator details and over time start to see patterns, and get a general understanding of what repairs and maintenance looks like, what payroll looks like, utilities, and so on. That way, you can form your own opinion.

I’ve seen a lot of new people enter this space or enter apartments and these deals could be scary, to put it frankly, because they could completely miss on one expensive item or one assumption […] the wrong input, and that could lead to a totally different result, number one, so I think it’s first off knowing the numbers.

If I talk about a park-owned home deal, then I’m expecting probably $1000 for every park-owned home per year in repairs and maintenance. The repairs and maintenance is 5X–10X what a typical tenant-owned home repair and maintenance is. All of your R&M is going into your turnover costs because you’re going to have someone who […] every two years and you have to be prepared for that kind of turnover. You also have to have the proper payroll in place. That’s just one example. The number one is know the numbers and connect with people that are experienced to help you become more familiar with that.

Two, you really need to understand the risks that are outside of the numbers that can take place. Of course, you can have a very rosy pro forma, but if you’re in a flood zone that’s ultra-high risk and you can’t get proper insurance on that deal, then there may be a situation where you could have a deal go to zero. That could even go negative beyond zero if you can’t pay back the investors and there’s still a mortgage to be paid on the property. So knowing what the risks are and always inquiring and learning more.

I’m not saying don’t go after deals that are in flood zones. There are flood zones. There are hurricane areas. There are utility risks. I think that’s a big thing within mobile home communities, with your private utilities. Knowing what the backup plan is if those break down on you and what the risks are of the various private utility systems. Those would be my big suggestions.

Andrew: I think those are huge, huge points that you’ve touched on there, knowing the numbers. If you were an LP, do you have an example of a real rough kind of maybe valuation tool that an LP could use, just to make sure that the numbers make sense on a deal that they’re looking to invest in?

Dylan: Yes. […] is to stay away from too many rules of thumb. There are a lot of rules of thumb out there, like 35% expenses, but you also have to look at it if it’s a park-owned home deal, probably 50% expenses. There’s a number of those that I can get into. I think the best thing to think about is looking out on a per-line item, understanding how much each line item typically goes for.

I don’t have any direct resources for this. It’s something that I’ve been starting to put together a bit, but learning just the basics on how much are repairs and maintenance, how much is typical payroll, how much is insurance, how much are taxes, breaking that down and coming up with a basic pattern. I’m sure any sponsor doing this for a bit can be able to fill you in on those things. Also, I wouldn’t be too shy to ask someone that has more experience.

Andrew: Definitely. A lot of times people say, hey look at the expense ratio and kind of build from that. Would you say that on a park-owned home community the expense ratio would be double that of a tenant-owned home community? Typically, you hear on tenant-owned home communities somewhere around 35%–45% of the gross income is going to be expenses. In a park-owned home community, what does that look like? What is your typical expense ratio?

Dylan: I look at a lot of the patterns on this side and I usually find around 50%. If you look at an apartment complex, you run at about 50% expense ratio when you’re optimized with market rent. For the most part, that’s what I find in most park-owned home communities. If you want to do it on a per door per year expense—I’m just one of those guys that always feels like the per door per year—same thing, but I usually find it around $3800.

A lot of the tenant-owned home side, you’re looking at $1400–$1500 per door per year and you’re all-in expense load. The remainder of that would go towards the park-owned side. If it was all park-owned, let’s say maybe $1400–$1500 towards the lot side of it. Maybe a little over $2000 towards the actual home side that you cover […] taxes, insurance, repairs, […] payroll, and so on.

Andrew: Got you. Wonderful. Dylan, what does the perfect mobile home park look like in your eyes?

Dylan: The perfect one is probably not park-owned homes. After all, let’s talk about it. Although, I think there can be a tremendous amount of opportunity there. I think it depends mostly on price, more than anything. In my eyes I tend to be an investor who thinks that you can buy a good deal at a bad price and you can buy a bad deal at a good price, and probably still make sense of it at times.

I’d lean towards buying more quality product that has more quality long-term prospects than simply […] or something to that degree. I’d say the perfect deal for me would be something that has low […] risks. We can say […] has economies of scale with a minimum of 100+ units […] just be prepared for a nice long-term growth.

Andrew: Wonderful. What hurdles does the manufactured housing industry face, moving forward?

Dylan: I think the biggest hurdle that we’re up against is the increase in price. We have seen that even over the last few months. Pricing has continued to go up, especially as there are risks of inflation or at least talks of inflation coming up. I think more and more people are seeking security that this asset class has to provide for us.

I think the biggest threat is in pricing going up and making it harder for us to find the quality risk-adjusted return that we’re all seeking in this space as we see the industry continue to consolidate. I don’t know how cyclical it will be because there is a possibility that this space really does consolidate and it just becomes a different playing field over the next five years.

Andrew: It’ll be really interesting to see what the business looks like 5–10 years from now. I think a lot of the bigger private equity firms will start to look at smaller assets. They’ll have to go under 100 lots, which is this artificial barrier. That is something that is going to be interesting.

Dylan, one of the last questions here, what’s the value proposition at Requity and what makes you guys different?

Dylan: We are geographically-focused, mainly targeting specific markets throughout the South East, and we are ultimately trying to buy a quality product that has potential for an institutional-level exit.

Our goal, rather than just trying to find the best deals within place, kind of cash flow, would that look good, especially when we say we’re trying to be strategic about our growth in a way that can give us economies scale, the ability to manage very well as we scale, and emphasizing operations, with the ability to have the off chance that we acquire enough scale to be able to have a really attractive exit long-term.

Andrew: Wonderful. Dylan, how can listeners get a hold of you if they would like to do so?

Dylan: You can reach out to us at therequitygroup.com. You can also reach me on LinkedIn. All of my contact information should be on the website as well.

Andrew: Awesome. Thank you so much for coming on the show, Dylan. It was a pleasure having you today. I really appreciate all of the insights you offered.

Dylan: Thanks so much for having me, Andrew. I really enjoyed it.

Andrew: Awesome. That’s it for today, folks. Thank you all so much for tuning in.


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