SHOW NOTES

Welcome back to the Passive Mobile Home Park Investing Podcast, hosted by Andrew Keel. In this episode of the Passive Mobile Home Park Investing Podcast our host Andrew Keel interviews Glenn Yaney of Vertical Equity Partners.

Glenn Yaney began his real estate investing career back in 2012 as a property manager in Tampa Bay, later advancing into the role of leasing manager for the state of Florida at American Homes 4 Rent. In 2020, he partnered with Garrett Smith to become a General Partner at Vertical Equity Partners. Together, they manage a diverse portfolio of over 400 rental units, ranging from mobile home parks to apartment complexes, all handled and managed in-house by their dedicated property management team.

In today’s episode, Andrew Keel and Glenn Yaney explore the differences between tenant-owned and park-owned mobile homes, they also dive into the intricacies of mobile home park septic systems and leach fields, and discuss two capital raising investment strategies for mobile home park deals: debt and equity. Glenn also recounts his transition from Corporate America to mobile home park owner.

Tune into this episode of the Passive Mobile Home Park Investing Podcast with Andrew Keel and Glenn Yaney to learn about the significance of tenant retention and tenant satisfaction in order to foster thriving manufactured housing communities.

***Andrew Keel and Keel Team Real Estate Investments (Keel Team, LLC) do not endorse any interviewee. This interview is for informational purposes only and should not be depended upon for investment purposes. ***

Andrew Keel is the owner of Keel Team, LLC, a Top 100 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.

Book a 1 on 1 consultation with Andrew Keel to discuss:

• A deal review
• Due diligence questions
• How to raise capital from investors
• Mistakes to avoid, and more!

Click Here: https://intro.co/AndrewK

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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

01:12 – Glenn Yaney’s journey from Corporate America (American Homes 4 Rent) to mobile home park investor

13:21 – Glenn Yaney’s portfolio in the Tampa, Florida MSA

17:40 – Learning through experience when investing in mobile home parks: leach fields, septic tanks, and mobile home park-owned homes

21:35 – Sourcing mobile home park deals through brokers

24:35 – Rough mobile home parks are sometimes the best mobile home parks to invest in.

28:03 – Two ways to invest in mobile home parks: debt and equity

34:53 – Prospectus with mobile home parks in Florida

37:37 – Reaching out to Glenn Yaney

38:00 – Focus on the mobile home parks with tenant-owned homes

39:49 – Conclusion

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

Links & Mentions from This Episode:

The Millionaire Journey Podcast: https://podcasts.apple.com/us/podcast/the-millionaire-journey-podcast/id1728886342

Glenn Yaney Twitter/X: https://x.com/GlennYaney

Vertical Equity Partners: https://www.verticalequityproperties.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. This is your host, Andrew Keel. Today, we have Glenn Yaney of Vertical Equity Partners on the show. 

Glenn Yaney started his real estate career in 2012 as a Tampa Bay, Florida property manager. Soon after, in 2013, he went on to become the leasing manager at American Homes for Rent, which is the single family build to rent institutional owner. In 2020, he started Vertical Equity Partners, and they’ve grown to currently oversee 400 units ranging from mobile home parks to apartment complexes of which they manage all in-house. Glenn, welcome to the show.

Glenn: Awesome. Thanks for having me.

Andrew: Would you mind starting out by telling us a little about your story and how you got into investing in mobile home parks?

Glenn: I think not to make it too long, but I would say in 2010, I bought a Honda Civic, and I started learning about finance then. I had a 23.9% interest rate. I learned that at that time, it was the highest legal interest rate you could pay. I quickly learned that $350 was going towards interest, and $50 was going to principal. That’s when I started my financial journey to learning about interest rates and whatnot to do in the future.

What I can tell you is that whenever I got a little bit further in, I was working. I had a job at Red Lobster. I worked there for seven years. Eventually, I started reading books like Rich Dad, Poor Dad. I started getting into the financial. I was told to read more financial information. I ended up getting my real estate license.

I was working at Red Lobster, and I was working for a small property management company. At that time, I would try to get a first time home buyer to go find a house, and it was 2012. I would show up to the house, and the house would already be under contract at that time. 

We found that there were a lot of institutional buyers at that time, cleaning up the wreckage of 2008. The perfect house to buy would be a $150,000–$200,000 house. These buyers were ready to buy, but they were working with financing. The buyers, obviously, have an institution that’s paying cash.

What I started doing is I started pivoting to make money in real estate as I started showing rental houses. What I found was that this one company was paying about $1000 commission for every time you would lease a house. When I worked at Red Lobster, my average pay would be about $1500 a month.

When I started finding these listings that were paying a thousand per listing, I ended up making $15,000 in one month. I did that for about two months. I decided that if there was a time to leave my serving job, it was then. That company, American Homes for Rent, ended up recruiting me. That was the beginning of getting into institutional property management.

Through all of that, I started finding mentors which were very helpful. I had one friend that had about 2000 units and apartments. I would call him to complain about the things that were going on at work, why we aren’t leasing units, and why they won’t lower prices. He was an asset manager of 2000 units.

He would say, well, maybe they’re just trying to discover the rents. They don’t know what the rents are really because single family homes have always been mom and pop, so you don’t really know what single family home rents are until you let them sit out there long enough to see what they’ll pay because there’s so much inventory. Small things like that. 

Then I would go back to work, then I would mimic what he just said to me, to my bosses, and then start moving up the ranks. I worked there for nine years. Right at the very tail end, Covid happened. We ended up consolidating management. 

I actually was able to be the leasing manager of Florida, where we had about 13 leasing agents. I was in charge of managing it, turned into a call center job. Through that, I learned how to build systems. It really just taught me how to manage a call center, which was a grind for sure, sitting at my computer the whole time.

Andrew: Let me jump in here real quick if I could because this is an amazing story. American Homes for Rent, I see their trucks all over town. I live in Orlando. They’re all over the place. I’m not sure how many, but how many single family homes approximately do they own?

Glenn: In Florida, it’s about 9000. When I left, there might be more or less, but 9000 in Florida, about 55,000 in the country.

Andrew: Nine thousand in Florida, 55,000 in the US.

Glenn: Yes.

Andrew: Wow. I have pretty strong feelings on this. I actually think that institutional capital owning that many housing units is not a good thing. Who owns American Homes for Rent? Is that Blackstone?

Glenn: It started with the founder of Public Storage, the second biggest self storage REIT. I think it is the biggest self storage REIT in the world. He started with just buying a hundred houses out in Vegas, built out a team, they just went to town, and then they went public.

Andrew: Wow. Just absolutely amazing. What are some of the things you learned there? Obviously, as a leasing manager, you’re seeing tremendous demand for the homes you have available, but what about the management side of things, the property management side of things? Did you learn anything from them managing at scale that you now use in your business today, managing the mobile home communities and your apartment complex?

Glenn: Yeah. We’re very good at scaling. A lot of multifamily management, even at the 2000–5000 is still somewhat mom and pop, but this was a very institutional structure. What they would do is they would have streamlined for every single job there was. 

Instead of having a property manager, wear all the hats, they had a leasing department, they had a maintenance department, they had a property manager, and then they had a call center that had all the inbound calls come in, and then they would field them through.

Andrew: Pretty big operation, as you can imagine with 55,000 units. That’s crazy. How did you get to mobile home parks? How do you go from that corporate America gig, private equity, leasing manager of Florida, which is 9000 units? How do you go from that to mobile home parks? How’d you hear about them?

Glenn: Just real quick. Back to the leasing manager of Florida, the craziness of the volume that we were dealing with is that we would lease 300–350 houses a month, which is the size of a normal apartment complex every month, which is wild to think about. Before that, I had a lot more interaction with the customers. I came across one customer that had some mobile home parks. He had a bank statement that showed that he was pulling in $60,000 a month. My mind was blown.

It was very rare to see anybody over $20,000. Then I saw this one guy come in. He didn’t look the part of what you would think somebody making $60,000. I thought that was unheard of or it wasn’t heard of. So I started asking him, and he showed me his bank statements to get approved. There were all these small transactions going into his bank account, and I couldn’t figure it out.

I just finally asked him. I said, what do you do? He’s like, oh, I manage mobile home parks. I literally thought to myself, is this guy living on-site? What’s happening here? I couldn’t put two and two together. Anyway, I kept it pretty professional. I didn’t go too far into it, but I did follow up with him after the fact to talk to him about mobile home parks and how he got there.

Andrew: He was renting a house. He was interested in renting a house from American Homes for Rent.

Glenn: There’s more to the story, but it was for (I guess) we’ll call it significant other. He was renting a house. He ended up…

Andrew: Divorced probably.

Glenn: He actually didn’t qualify. It was funny. He didn’t qualify. It was a little weird, but it was one of those things where I’m like, hey, you’re not qualified, but we could be friends. 

Anyway, I ended up following him around. He was literally on the ramp up of his career. I think he went from being, as to come up, you’re putting all your money into all of your real estate. You don’t have any money. I think it was just getting to the point for him where he started taking off with his portfolio. 

My days off were weird. I’d have days off during the week. I would take my days in the middle of the week to meet with this guy. I would ride around with him to his mobile home parks.

Andrew: This was where at? Is this around Tampa?

Glenn: Plan City. The thing he has that a lot of guys don’t is that he actually has almost all of them in one area, Plant City, Gibsonton, and Tampa Metro, but really not far out. We call it the Plant City Metro. It’s not even much further than that. Everything was a 30-minute drive.

Andrew: What kind of parks are these? What quality? What did they look like?

Glenn: They’re family parks. We’ll call them C-class or C-minus, but overall, they were…

Andrew: Affordable housing.

Glenn: Affordable housing, yup. He didn’t do any park-owned homes. He just did lot rents. He would just drive around, and we would look at a lot of construction. A lot of these people were moving out. He was just renovating them and had crews that were doing it at the time, and I would just follow him. That was how I got into it.

His two first parks that he ever bought were a three-unit and a nine-unit mobile home park. They just happened to be a block away from each other. He sold me the three-unit first, seller-financed. I think I put 10% down seller-financed, and then he gave me another one seller-financed. That one was, I think, $350,000. I ended up putting $25,000 down for that one, which is unheard of to have minimal down, but he was helping me out.

Andrew: What a crazy story though. Somehow this guy was applying for a rental unit from American Homes for Rent and somehow weirdly didn’t qualify. It wasn’t for him, it was for a significant other. He didn’t qualify, you became friends, and he helped you get into the business, literally to the extent where he’s selling you some of his mobile home parks.

Glenn: Yeah. Really it was the launching pad that helped me become financially independent, those two parks. I had some real estate, I had some condos, and then I sold those. I traded up to a little bit like a townhome. I bought a couple of single family homes, but the cash flows were just not equivalent to these 12 units that I bought.

Andrew: Tell us about your portfolio. Those are pretty small parks. You have 400 units, so you’ve grown beyond that. Are they all around Tampa? A lot of small parks? You have some bigger ones. What does your portfolio look like?

Glenn: All of our portfolio is in the Tampa MSA. They’re all within an hour drive of each other. Our largest park is about 50 units. I think it’s 46 units. Besides my parks, it would be 10 units and up.

Generally, we buy them pretty distressed, a lot of value add, and just convert them to make them a nice place to live for people. We previously were in the park-owned model where we actually own the mobile homes. We’re starting to just stick to the tenant-owned.

Andrew: Got you. You have a lot of park-owned home units. Did you do anything else to get educated on utility infrastructure, anything like that? Did you go to the Frank and Dave Boot Camp, or did you only just be a mentee under this mentor of yours?

Glenn: Desmond was a mentor. I have a friend, the same friend that had 2000 units. He’s now got 10,000 units. He connected us with his attorney and showed us pretty much how to raise money. The first syndication was a 25-unit apartment building.

Once I bought this three-unit and the nine-unit, my business partner, Garrett, saw how lucrative it was to own mobile home parks and how expensive it really was to own apartments to an extent. 

At the time, the apartment prices were cheap, and then it became over $100,000 a unit. Compared to our business model for mobile home parks is just to buy them around $30,000 a unit. That was our business model.

We thought if we bought them for $30,000 that it was cheaper than the land we’re buying it on. If you were to buy a vacant piece of land, it would probably be cheaper than the land we were buying. We had all the infrastructure there that had mobile homes on it. We just thought it felt like it would be hard to mess this up.

Andrew: Did you know anything about utility infrastructure? Are these all public utilities, the properties that you own? Is there some private?

Glenn: Every park we have is a septic tank park and a lot of wells.

Andrew: A lot of well and septic. How have those fared? Have you had any big learning experiences?

Glenn: Definitely. I didn’t know what a leach field was when I started. We bought this one park. We went to the health department and asked them about really if there were any violations. They’re like, no, there are no violations. The day after we closed on the place, they’re like, yeah. The septic tank actually needs to be fixed to replace, blah-blah-blah. We found out that it was just a $40,000 septic tank.

Andrew: Oh, my goodness.

Glenn: Yeah. We learned on that one, really those large septic tanks. It was a big headache, but it was something we learned on. We found a good septic tank company, really. We started getting connections through learning, really.

Andrew: That’s cool. Okay. That tells us a little bit about your portfolio, your background, and how you got started in the business. I have a lot of questions I want to ask. We’ll do a lightning round. We’ll do quick answers. What do you think is the toughest hurdle that you’ve had to overcome in mobile home park investing?

Glenn: The hurdle that I’m dealing with right now is insurance. Through doing these podcasts and listening to other people, at first you’re like, well, why would you get rid of a park-owned home when the rent is $1200 and you’re getting about $500–$600 in rent? Through going through some refinancing, the conventional financing is pretty tough on the park-owned homes, especially in Florida.

They require wind mitigation. After Hurricane Ian, it’s been pretty much non existent for mobile homes to the age of mobile homes that we have. It’s constantly learning, through doing it. I wouldn’t make the same mistakes we made with maybe the septic tank the first time, which is a big expense. The things that we’re fixing now is just how we operate the parks.

Through guys like you, you wonder. It’s like, why aren’t they doing park-owned homes? Then you learn. It’s like, well, they’ve been there too. It’s hard to think about. You’re losing $1300 in revenue, but you’re lowering your revenue to actually become more profitable. It’s the opposite of everything I’ve ever thought about real estate. You always thought you should always be increasing revenue. Actually, you got to lower the revenue, but you actually increase it through decreasing the expenses is what happens.

Andrew: Park-owned homes are definitely a niche. Some people can do it and do it well, especially with newer vintage, the 90s and 2000s homes. If you can rent those for $1200 a month plus, there’s some good cash flow there. But still they’re going to come with the insurance, the taxes, just the additional expenses.

Glenn: Interest rates.

Andrew: Yeah, that you’re going to have on the chattel loan, for sure. That’s good to know. When did you buy your first park? When was the three-unit and the nine-unit? When was that? What year?

Glenn: 2020.

Andrew: 2020, Covid year. It’s 2024 now. It’s only been four years, and you’ve grown up to 400 units. That’s pretty fast. What would you credit that to?

Glenn: I would say that we’re in a great market. We have great private money lenders, which helps a lot. We do mainly on the front end because we’re doing heavy value add is through private lending. Through doing that, you have credibility.

My business partner, Garrett, I piggybacked off of his experience when I started. He had been doing this since 2009. He’s a great deal guy, and my background is more of property management. That’s whenever I tagged in to help him with that operation.

Andrew: Nice. What other mistakes have you made that other mobile home park operators or investors can learn from outside of the septic tanks? We definitely want to check out the leach fields, the septic tanks, and avoid park-owned homes, but what else? What other stuff in the last four years has popped up?

Glenn: These are all lessons that it would have been hard to learn without not doing the work. I can’t think of much, really.

Andrew: No worries. That’s good. How are you sourcing these, Glenn? Are these just mom and pops? Are these mostly through Desmond, your mentor? How else are you getting these?

Glenn: We’ve pretty much gone through brokers. Because of the type of deals that we buy, they’re smaller unit counts. It’s more work to sell for a broker. A lot of the bigger names, or the brokers that are doing the larger listings aren’t going to want to mess with a smaller park. We find those brokers and we reach out to them, let them know, hey, look, this is what we’re buying. We’re able to close with private money so you don’t have to worry about the banks. It makes us more marketable to them.

Andrew: That’s interesting. Most people would say, oh, you got to go off-market. If you’re going for smaller older vintage home communities that maybe don’t look the best, but they cash flow, you’re in a great market, I’m sure those are easy pickings. You can find them online for 10-plus cap rates, I’d assume, right?

Glenn: Yeah. Add into that, I think that sometimes, it’s always the advertised thing to go cold calling your own deals and stuff like that. I think that a lot of brokers do favor people that rely on them. What I mean by that is that we’ve talked to other brokers.

We just go to lunch with them, talk to them, and they might find a deal for somebody. That person’s like, oh, I’ve already talked to that person. Then they cut the broker out. The brokers are pounding the phone all day long. It’s something that even if they don’t do a lot during the transaction, they’ve done all the work up to the transaction.

When they give us a lead, we respect it. There are times that we don’t hear from the broker until after we close. But at the same time, we would pay them every time just because they’re sending them to us off-market.

Andrew: That’s awesome. Building that relationship is key for sure.

Glenn: By far the best deals we’ve had. It’s hard to find them off-market. There are so many cold callers out there that it’s the brokerage.

Andrew: Sorry. I got a team of five of them.

Glenn: I always ask them who they’re with. I’m always like, oh, what company are you with?

Andrew: They’ll never say Keel Team. They’ll never say that because I don’t really want people to know that they’re with Keel Team, so we have an alias company that they call from. But if they have a foreign accent, it might be one of mine.

Glenn: It could be. 

Andrew: Glenn, what does the perfect mobile home park look like in your eyes and why?

Glenn: I like the ones that are really rough.

Andrew: Everybody else stays away from those, but Glenn loves them.

Glenn: Yeah. I think I welcome them with open arms. I really believe that’s where the value is. When we had the conversation a couple of days ago, you said something that struck a nerve with me. I asked you the 3000 units or pads that you’re at, at what point do you stop? What do you do? You said, I genuinely liked the mission that we’re on.

I really do believe that I’m in the same boat as that. I think to myself that these are either properties that are going to get scrapped and redeveloped, or we can halfway redevelop the place to make it affordable housing for people that normally wouldn’t be able to find housing are able to find housing through what we’re accommodating with. We make it a safe environment as well because sometimes you go in and you’re like, I don’t know if this is where I should be.

If you do the proper background checks and make sure that you and all the people that work with you are going to be walking through that park, you want it to be a nice place to live. I just want to go to bed at night knowing that I’ve done the right thing.

Andrew: We just did a study that went all the way through last year because we were trying to identify our turnover, what the avatar tenant looks like that’s turning over, that gets into a home and then decides to leave eventually. What we found out is only 25% of the tenants that turned over were people that we put in the homes. The majority of the tenants that are turning over that are leaving the homes are legacy tenants, that were with the old owner, and they don’t want to follow our new rules.

Yes, the lot rent has gone up modestly, but they think that that’s the end of the world. I think some people, the bad eggs just get filtered out over time. That really speaks to the asset class of like, hey, the stickiness of the tenant that stays a long term, I think good management can promote that, where these legacy you’re buying from mom and pops that own one park, maybe they started to get lazy with managing it later into their retirement years. And it shows. That’s where these bad eggs slip in.

I applaud you for that. It’s about the mission. It’s like, hey, we’re out here providing affordable housing to people that desperately need it. In the Tampa MSA, I’ve been over there. It’s packed. What a great place to live. You’re so close to the gulf. It’s awesome, but definitely you need a place for service workers and affordable housing for sure. That’s huge.

Let me ask you this, Glenn. I ask this to every guest. If you were going to invest passively as an LP or a private money lender, if you were going to invest passively into a mobile home park deal, what would be the major things, knowing what you know now, that you would want to know about the deal or the sponsor before investing?

Glenn: I heard this question earlier today. I listened to your podcast, and I thought that’s a tough question because I’m more of the active guy. What I would say is that there are two ways to invest. I think one would be debt and one would be equity. Depending on the operator, I think that there are certain qualifications that would be helpful. The debt, if you put that in place, it’s a consistency.

Andrew: Potentially consistent.

Glenn: Yes.

Andrew: That’s like you’re saying they’d be the bank, they’d have a first position mortgage as their collateral for the loan, that type of private money. Okay, debt.

Glenn: I would say that I would focus more on the operator than the deal itself, just because it doesn’t matter how good the deal is if the operator is just not doing their fiduciary duty. I like to hear the good and the bad. If somebody tells me that there’s everything good that’s happening and nothing bad, it makes me think that there’s probably a lot going on. I like to hear a little bit of the rough spots, and I’m that way. There are struggles. What I would say is what we’ve done to overcome those and obviously to try to put backstops in those places to not do that again.

Andrew: Yeah, there’s always hair on the deal. I’ve never seen a deal that was 100% clean. I think that’s a good question as an LP to ask. An operator is like, hey, what’s the hair on this thing? Bring it up to the top. I don’t want to sift through your 40-page offering slide deck. Tell me what’s the hair on the deal right away. I think that would just save a lot of time, and then you can decide.

I have a sticky note on my monitor right here and it says, what does the deal hinge on? What’s the biggest risk? Identify this first. That was a Sam Zell. That was one of his big things. I think you could save yourself a lot of time underwriting and doing all this stuff behind a computer screen, researching and doing due diligence.

If you just think about, hey, what’s the deal hinged on? Is the market small? Are the homes and older vintage? Are there a lot of park-owned homes? Do you have to increase rents a hundred dollars the first year to make the numbers work? You’re going to know that with just doing the quick value underwriting. Just identifying that first I think is huge, so that’s a good point. What’s the hair on the deal? Let’s identify that first.

Glenn, obviously the economy is in a weird place right now. Interest rates are fairly high compared to the mean. What do you think the future holds? How do you think MHPs can fit in with that?

Glenn: I think there’s still an adjustment to mobile home parks as in not price wise, but with rents going up the way they have, I don’t think that those are coming down. Like everybody, if you read the headlines, they say rents are going down. I don’t see rents going down. 

What I would say is mobile homes, everyone that probably listens to this would agree, it is affordable housing. Whether the government allows it, that probably may never happen, but at the same time, too, overproduce mobile home parks, which will never happen.

I think with the interest rates, I believe that mobile homes will be able to weather it pretty well, especially with these rents. I don’t think they’ve adjusted completely. I think there’s still a lot of room for them to go up. It’s hard to really grasp the affordable crisis we’re in right now.

Andrew: Yeah, there’s a lot of demand. We listed one of our brand new homes the other day in Michigan, and we had over 25 people the first day reach out. It’s amazing. The demand is there. But then when you vet 25 people and you look through all the applications, you find that there are a lot of people with bad credit history. There are a lot of people that don’t have I would say consistent income. They’ve bounced around the last few years with Covid and things like that.

It’s an interesting time to be a landlord. To try to sift through that many tenants and find the right fit is definitely a big undertaking. What do you think is the biggest threat to mobile home park investing, Glenn?

Glenn: Government. I would say that if there’s somebody to throw a wrench in it, there’s the government. We have this one park where we had one resident we were evicting. He was squatting. His mom was the old park manager. He ended up calling code on us, the building department. It was for nothing that we did, it was what we inherited. He just started pointing out all the problems. They want a permit for everything. It’s a very expensive way to handle to get it completed. That’s a lesson.

Buying smaller parks, these permits are a big percentage of the capex budget is what I would say. When you have to go in and you have to get a general contractor in there for a park that you paid $750,000 for, it gets to be real expensive real quick.

Andrew: Another thing since you own all of your parks in Florida that some of our listeners might not be aware of is a prospectus is required in the state of Florida for mobile home parks that have 26 or more lots. It basically will provide protections for the tenants and may include rules and regulations of the park. It’s required to be provided to a tenant before they sign their lease.

Some prospectus will have limitations on the rent increases and what you’re going to get from that. If you have a laundry facility on site and it’s in the prospectus, you can’t come in and shut down the laundry facility. Maybe you can tell us about your experience with this prospectus and what you’ve run into.

Glenn: Because we have majority park-owned homes, you do not need a prospectus. Because we’re literally changing our structure, we’re turning all these park-owned homes into tenant-owned homes and talk to an attorney, really the process of doing that. He said, well, once you get over 25 tenant-owned homes, you have to have a prospectus. But if it’s all park-owned, the eviction process and everything is managed as if it were an apartment. That’s the difference.

We would have to create a prospectus. Our attorney, we got on the phone with him yesterday. He was going through each park that we were thinking about converting. There weren’t any prospectus because they’d been park-owned forever.

Anyway, I guess the law started in 1984. I guess before that, it could have been different. At its current, since 1984, they’ve never had over 25 units that were tenant-owned. We’re just learning about that. He gave us a long question, a Q&A to fill out. We have not experienced anything really against it.

I can tell you that one rule that they said on the prospectus, I don’t know if it’s just in Florida, but I have a friend. My mentor is actually dealing with it. If you’re a resident, the person you sell the mobile home to has to receive a prospectus. If I own the mobile home, I’m not the landlord, I’m just a mobile home owner, and I sell it to somebody, the prospectus is not required to be given to that new resident. It’s what we found out.

My attorney told me because they’re in the middle of an eviction. They’re challenging it. The person that’s being evicted was sold the home by a tenant. They didn’t have to receive a prospectus as a short story.

Andrew: That’s interesting because when I was doing the Lonnie dealing around Florida here, I ran into this. It was an interesting scenario because I was buying just the homes and talking to the different park owners. Through that, since I wasn’t living in the homes, I was an investor, we had to figure out a workaround around all of that.

Glenn and I are not attorneys, disclosure here. Definitely check before you do anything to make a decision on who to provide a prospectus to or not. Definitely check with a Florida attorney because that’s pretty important. 

Glenn, we’re running short on time here. How can listeners get a hold of you if they’d like to do so?

Glenn: I do have a podcast, it’s The Millionaire Journey podcast. I am also on LinkedIn. My name is Glenn Yaney. Twitter, I think it’s also @glennyaney. Feel free to reach out to me there. I’d be glad to talk.

Andrew: Awesome. What’s one last bit of important advice you would give an interested passive mobile home park investor before we sign off?

Glenn: I would focus on tenant-owned home operators is what I would say. I’m learning that lesson now.

Andrew: That’s good to know. Yeah, tenant-owned homes. There are different models in mobile home park investing. Tenant-owned homes, there should be some joint equity there with the tenants and the pride of ownership. That’s what we’ve seen in our parks.

For us, it’s just been the reliability of that income stream. It’s a stickier tenant that stays longer when they own their home. They’re vested. They own their home. Whereas the park-owned homes, it’s like the apartments. I had a small apartment complex in Daytona beach. It was one of my first investment properties that I got seller financed to me. If there is such a thing, an F grade apartment complex.

It was F or D when I bought it, it was that way. Very old and it was just trashed. Every time someone would move out, it was just really trashed, and it needed a ton of work. You got to know, in mobile homes, there’s different size drywall. There’s different flooring.

It’s not always plywood for the subfloor, it’s that particle board stuff that gets wet, then it swells up, then it gets soft, now there are soft spots in the floors, and just a ton of different things. The doors are different sizes. The windows are different sizes. Mobile homes can be complex to rehab and maintain. That’s for sure. 

Glenn, thank you so much for coming on the show, man. I really appreciate it.

Glenn: Thanks for having me.

Andrew: That’s it for today, folks. Please leave a review if you got value out of the show. I appreciate you listening. Thank you all so much for tuning in.