Interview with Lee Meekcoms of Parkbridge Capital Group

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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 Lee Meekcoms, from Parkbridge Capital Group. Lee and Andrew discuss many mobile home park related topics including: the future of interest rates, the demand for affordable housing, expense ratios associated with owning Mobile Home Parks, and passive investing tips for Mobile Home Park investors. Andrew and Lee also awards us advice for recessions and the current mobile home park investing climate.

Lee initially entered the real estate investing arena in the apartment and self-storage sectors with a private equity firm based in the northwest. He later formed Parkbridge as an affiliate company in the mobile home parks and RV resort investment business. Lee’s company was instrumental in the affiliate growing to over 60 communities across 13 states and 28,000 mobile home sites. Lee participated in the first CMBS (conduit) financing in the United States, in the early 1990’s resulting in $106 million in financing for his affiliate company.

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 200 total 5-star reviews by the end of 2022, 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

01:40 – Lee’s start into the manufactured housing business

05:20 – The future of interest rates

07:50 – Advice for recessions

13:00 – The MHP assets Lee wishes he kept

15:20 – The biggest hurdle in the MHP business

18:35 – The expenses on a case by case basis

21:12 – CapEx reserves

28:00 – Realistic timelines for raising rents in a mobile home park

33:16 – Secondary and tertiary markets and mobile home park investing

35:00 – The most important thing passive investors need to look out for when investing in mobile home parks

38:00 – Finding the demand for affordable housing

41:31 – Lee’s perfect mobile home park

43:48 – Park-owned homes versus tenant-owned homes

45:40 – Getting ahold of Lee

46:06 – Conclusion


Links & Mentions from This Episode:

Lee’s Email:

ParkBridge Capital:

Frank and Dave’s MHU:

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 an amazing guest in Mr. Lee Meekcoms of Park Bridge Capital Group.

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

Lee has more than 30 years of experience in real estate. He initially entered the real estate investing arena in the apartment and self-storage sectors with a private equity firm based in the northwest. He later formed Park Bridge as an affiliate company in the mobile home parks and RV resort investment business. Lee’s company was instrumental in the affiliate growing to over 60 communities across 13 states and 28,000 home sites. Lee participated in the first CMBS financing in the US in the early 1990’s resulting in $106 million in financing for his affiliate company. Lee currently resides in Los Angeles, California. Lee, welcome to the show.

Lee: Thank you, Andrew.

Andrew: Excited to have you here and would love to hear your story and how in the world you ended up in mobile home parks?

Lee: Okay. Good question. As you mentioned in the intro, I was in the apartment syndication business many years ago when I was a younger guy, of course. During the business cycle since we’re tightening up, we had a spike in interest rates, business slowed down, this affected the real estate industry, the multi-family industry quite dramatically.

I was living in the Portland area. We had a bunch of apartments up and down I-5—Eugene, Salem, Portland, Vancouver, and so forth. I noticed there was quite a bit of vacancy up in some of the apartments, particularly one bedroom, we’re consolidating moving into two bedrooms, moving on with their parents, and so forth. While this is going on, I noticed that the mobile home park industry in the Portland area, the west coast Oregon has some really spectacular mobile home parks. Some of the really nicest in the country.

I noted that the 55 and older parks had no change. I mean they were full. People were paying their rent. Nobody was complaining, if you have fixed incomes, retirement income, own their homes, or whatever. With that noted and noticing the turmoil in the multi-family area, we also had some self-storage as well and even that got a little bit shaken up, since so much the case today.

But nonetheless, what I saw in the mobile home park side was this stability and what appeared to be predictable increases because of the lack of supply of spaces, I got in the business. I picked up my first park. It was a 72-space 55 and older property in the Northeast Portland area, very nice.

I picked up another one after that and they ran beautifully without a hitch as if they were immune to the economy where you hear the saying that mobile home parks are recession-proof, but that was very evident to me, I was living it. While some of the apartments were going through a lot of turmoil, these were cruising along. That’s how I got into the business originally.

Andrew: In what time frame was that when you first got into the business?

Lee: When I was five years old. This was back around 1982 or 1983. That’s when the interest rate spiked up into the 20% area. For people that lived through that time, which are many still, the Reagan era came on and so forth and we saw some turn around the business scene, but that’s when I think Paul Volcker jammed up the interest rates and stopped that recession, that inflation that we had in its tracks.

In the meantime, people suffered through that inflationary spike and then it cut short. I don’t know what they’re going to do today. It’s a little more out of hand. But in any event, that’s the time frame that it occurred in.

Andrew: I would love to spend a little time talking about that because they say history repeats itself. I don’t know if the Fed really has the gumption to do what Paul did back then and raise rates as high as he did. What do you think about the economy right now and where interest rates are going to go? I mean, I’ve heard a quarter of a point, but I think it needs more than that. I don’t know. What do you think?

Lee: Well, it’s really hard to predict. I mean this is not so much a credit cycle where you have this inflation just from trillions of dollars being thrown out of the market and people having all the extra money. The problem now is how do you squeeze that out of the economy?

Now, like I said, Japanese inflation that happened many, many years ago and a more dramatic program to run it out. I don’t know what they’re going to do here because the leadership is way different than it was back then. The appetite for the executive branch to take responsibility for what’s going on and take the necessary actions to correct it to improve life for Americans seems to be beyond the reach of what they’re willing to do.

The future is somewhat unpredictable even with respect to the business cycle, let alone whatever else is going on in the world, which is certainly really tumultuous. It’s hard to predict what’s going on in the future. I would think that the interest rates do need to go up significantly in order to ramp down the inflation that we’re having, but I don’t know if that’s going to solve gas prices at all or food. I mean, those things are just dramatically mismanaged with the resources we have available in this country. We’re just off to the rodeo to see what happens.

Andrew: Yeah, it was funny. This past weekend I subscribed to a newsletter by John Mauldin, he’s an economist. In the headline of his email, he called it a recession. He said the Fed is walking a tightrope and he just doesn’t see a way for them to get out of this without a recession. Do you agree with him?

Lee: I do. We might even be looking at stagflation as well where we have a business slowdown and increasing prices at the same time. No increase in productivity. People in small businesses today are having a heck of a time hiring. I mean if you’re in the business, you know how difficult it is to hire skilled people that actually even want to work. It’s sort of a unique time in memory of those of us that have been through this sort of thing before. Time will tell how it comes out the other side.

Andrew: Maybe you could shed some light on mobile home parks. You mentioned how your 55 and older communities did well during the ’80s. They performed well. How about other recessions? I know there was the chattel loan crisis in the ’90s. Maybe you can shed some light on that. Even as recent as the Great Recession in 2008 and 2009.

Lee: Which is the greatest recession. It hit the fan again in the ’90s I think when we had a change in the tax law, it was Bob Packwood, he was a senator from Oregon. The tax laws were voted so that passive losses couldn’t flow through to investors anymore, which created a huge problem for lenders. We went into a recessionary environment then. Frankly, that was the banking collapse we had at that time and the Resolution Trust Corporation (RTC) came along and consulted a bunch of the banks and so forth.

It was also very painful. We had a number of loans going through. I was affiliated with another significant investment firm, Ellenburg Capital, some of the people who have been on this podcast, maybe you remember them but, we assembled probably the largest, highest quality institutional portfolio parks of the country during the, let’s say, late ’80 to the late ’90s.

That collapsed the RTC I entered in on was really painful. Not so much of the operations side, but the fact that banks couldn’t really get loans. Interestingly enough, during this time, as the banks were going down, certain investment firms—Merrill Lynch, and other companies that were white papers—were checking to see what was going on with respect to the debt of various types of assets.

What was discovered is that one of these portfolios, let’s say for home savings, Gibraltar, and some of the other bigger companies, their mobile home park portfolios were performing really well, which was a real eye-opener to the investment community as some of the other asset types had suffered pretty badly. I remember Lincoln National Life Insurance came over to our office and we were interviewed for a white paper they were doing to assess where they want to get that business as well.

As a result of those investigations back in the ’90s, it was more or less proved out of the risk factors that were associated with lenders going to the mobile home park space were very low. The foreclosures, the defaults were very low.

Even though it was tumult in the markets, these assets were still performing very well, which led thereafter to a way out of getting out of this lending bind in the—although there have been many […] residential for years, we got into one where the first commercial […] have been received the […] loans and my firm. I arranged it so that we were going to do a project where Daiwa Securities was in the lead through to do a CMBS loan. It was the first CMBS loan ever done in the United States in 1991. The portfolios that were put together then were not multifamily, it was mostly […] mobile home park, our portfolio.

That was an interesting piece of history. The CMBS financing has become a lot simpler since then. That was a real wild and crazy time, but we came out the other end with our financing and then from there on out, the CMBS market expanded by leaps and bounds to a whole really viable way of doing business and gave outlet to mobile home park investors. We really didn’t have any Fannie and Freddie going strong at that time, so when the savings loan shut down, it was very hard to find answers. […] paper would be the option and then CMBS came out, voila, we have liquidity and a lot more that business going on today.

Andrew: I can only imagine. That’s fantastic. I’m sure it was more common practice with mom and pops being willing to hold paper and just because of the marketplace.

Lee: That’s true. Shortly thereafter, you have some of the REITs coming out and they were tremendously liquid to pay cash and that also. Following the tumult of the debt markets at that time with the RTC, shortly thereafter you have the REITs coming forward. Then even more so, into the mid-90s, they were a dramatic influence in the markets, ELS and Sun particularly.

Andrew: I wrote a note here when you were talking. I said which institutional quality assets do you still own today? Given cap rates are at the lowest they’ve been on mobile home parks. I think I heard someone say in 50 or 60 years, which ones do you wish you kept?

Lee: I mean, personally, I haven’t been able to make the paradigm shift in my mind going from buying high end five-star assets 8.75 to 8.8 caps to where now it’s less than half of that, but for instance, we had a beautiful couple of parks in Sarasota in the ’90s that divided by I-75 and total of about 980 sites between the two. We paid $28,000 a site for those. Now, this again, was in the mid-90s. Those properties were bought I think a year or two ago by another company that David Knapp put together using—I forgot the name of it. He has a big investment fund, the name escapes me, that park was about two years ago.

He paid $170,000 space for it. Would we like to have kept that? Probably. In hindsight, it was 2020 and as an investment group, you like to make your investors happy and turn property once in a while. There are those guys are very long term holders. I know someone that’s a great business and you get to run the inflationary spiral that way. I bought a property for my family back then in ’88, a mobile home park in Portland Oregon. I think we paid $22,000 a space, that was sweating bullets for paying that kind of a price for it at that time. Now, that property is not part of my family, my former family lives there.

That property is worth probably $125,000 a space. It’s part of the metro, higher quality parks, family or otherwise or senior are really priced up there as you can see in many other areas. That’s what happens, assets you would rather not sell. That’s the choice you make. But hindsight is remarkable.

Andrew: What does Sam Zell say? He says you never get in trouble taking a profit. I mean, it makes sense. Let’s dive in here. I have a couple of other questions I wanted to ask you. What was the biggest hurdle for you in your investment experience with mobile home parks? It seems like you were dealing with 55 and older, institutional quality assets. I’m sure management’s a lot easier on those types of assets, but maybe you can shed some light on the toughest hurdle for you guys in the business.

Lee: Well for me, since I was on the acquisition side, more or less asset management, I didn’t get too terribly involved in the operational side of it. I knew we had operational issues in some parks, but those are operational issues if you run across a portfolio endemic to anything you own, if you own enough of it. You’re going to run into some really crappy things.

For the most part, we were buying higher and higher quality properties, but that didn’t mean to say that inadvertently, one of the properties along a river wasn’t going to get flooded out and be wiped out. Another one, we did not know anything really in the tornado belt, but the parks that were near us were destroyed that way. Those are sort of extraneous, if you own that portfolio, it’s on your own private black swan event, I’d say.

The operating parks are just something that’s really, really hands-on. You got to stay and have really good people. We have really good people in our company to run those assets. Since that time, I opened up my own management company with my partner Doris who used to be a division president of Hometown. She’s very experienced. I rely upon other people that really know how to do it that way.

My side, it was mostly trying to figure out what to buy next, having it make sense, and overseeing the due diligence properly. It’s never been too much of an issue getting good financing, sort of an issue, but it’s whether or not they’re going to re-trade you at some point, your investors, and just your sleepless night for a couple of nights or whatever.

For me, it was just finding the correct asset, valuing it up, and being able to buy it. Of course, it’s very competitive today. There’s never been like a cornucopia of parks where you go like that one or that one, let’s go buy those. It’s always digging and finding them, evaluating them properly. I’m really orthodox in the way I enter right parks and really have been where you don’t want to say tweak it all, we’ll be able to save that amount on our maintenance because the broker said so. They’re paying way more to the management you need to pay. By the way, what happened to your reserves replacements in there, Mr. Broker? You just don’t see that.

But if you run a property, my focus is really underwriting the expenses much more than the income. Income, you can play with it a little bit more dramatically. You can change things for marketing or what have you. In some cases, it’s not as easy as others, but you really get hit on the expense side.

Andrew: Let’s talk about the expenses. They say the industry standard is around the 35% to 40% expense ratio and a lot of operators use that. Would you say that’s true from your experience?

Lee: That’s a case-by-case basis. In some states, you have a much higher cost if your gross income goes to real estate taxes, for example. Depending on whether you pick up the water and sewer inside of your rent or not can influence that dramatically by 5%, 10%, or 12%. The age of the property can also influence the amount you have to stand on fixing it up, repairs and maintenance, and so forth.

If you’re not catching your CapEx well or you don’t know that you’re underground’s going to have significant problems, you could have issues there. It’s really interesting, but I think that is probably a relatively good range. Let’s see, when we underwrite, we also have a professional management fee, there’s a CapEx reserve, capital replacements, and that sort of thing.

We have a real business that we have to abide by the law, so we pay our on-site managers. We also have to pay their employees. We have to withhold on them. They have to pay workers’ comp, all that stuff. At the properties that we deal with, we can’t just go, well, we’ll pay under the table, this and that. We just don’t do that. You can do it. It’s just that we don’t do it. It works, but each to his own, I’m not judgmental about it. Sometimes, I wish we could actually, but we don’t.

Overall but saying if you’re to 35% to 40% range, 35–45, you see stuff come out. The 18% expense is only 20%, it’s falling apart. Of course, there are no expenses. Nobody’s managing it. There’s no maintenance.

Really easy to run, low expense park. Why don’t we find out why that is? You find that going forward that—I look at it very seriously because my money and my investors’ money, I mean I certainly don’t want to use my money, but I feel with investors’ money, that’s way more important than mine. I could sleep at night. I mean, my wife might not be happy about it. I do not want to deal with investor losses. Fortunately, I haven’t had to, but nonetheless, those are all components of how you correctly underwrite and figure out expenses. One of the great things that are overlooked is the CapEx.

Andrew: Let’s talk about that for a second. What’s an appropriate baseline, middle-of-the-road park CapEx reserve that you would say on a per lot basis you should be setting aside?

Lee: Well, it’s a good question. I don’t know if there’s any particularly spectacular correct answer to that. A lot has to do with the age of the property and what type of infrastructure you have. Let’s say, if you have onsite sewage facilities, whether it’s a plant or whether you have septic, you can run into some major issues with that as opposed to if you’ve got public water and sewer, you might have a pipe break here and there. Maybe […] sewer pipe, water line breaks, what have you. You have certain stuff going on there.

Then the age on the roads, we do an assessment of that. But frankly, I run probably a 1.5% to 2.5% of gross, probably fills in there and that could be in the low end maybe $75,000 up to $125,000 to $150,000 a site depending on the property. It varies so much, but I don’t think you necessarily fool yourself into thinking that’s not going to happen. You could try and fool yourself that way as an underwriter or as a buyer. It’s certainly different when you’re a lender, you take a look at the conditions and go, we’re going to have you set aside your CapEx reserve of $25, $30, or $50 off and you’re like, great.

Let’s wait for the underwriting of the debt and many lenders won’t even require it, but realistically, I’m involved in overseeing about 30,000, 35,000 spaces. Over that period of time, you get a good flavor when things are going to be happening to you. Not everyone goes into the tank that way, but if you have to replace the septic field or you have Florida sinkholes or eventually going to have to overlay your roads, all sorts of things can happen underground, it just runs into that stuff.

I personally can’t ignore it. I would like to because you can then come up with a different net operating income to which you can capitalize and buy whatever your preferred cap rate is today. To compete in this market is pretty tough.

You have the cap rate and dartboard, I think, it starts at three and goes up to six, and that’s all you can play anymore and many of these that are quality parks or different markets. That paradigm shift has been made by some people […] came into the market by a great broker the other day […] grant in Santa Maria, north of here between San Luis Obispo and Santa Barbara, that’s three cap.

That’s happening, whether it sells it better or not, I don’t know, but highly desirable assets in California coasts that are spectacular will sell for very low cap rates. I see this continually. I keep asking, when did the cap rates start moving up again? They usually do follow interest rates to some degree, but interest rates have only gone down X amount.

Let’s say debt goes down from 4.5% down to 3.5% rate. Cap rates have gone down from about 5.5% to 3.5% or 6% to 3%. I mean that’s a big spread, so you lose a lot of your cash flow. I guess it depends on what your investors are satisfied taking these days. Those guys have investors that take 5%, some very good companies are paying 5% or maybe 4%. Mine’s a little more than that, but it’s a problem.

Now we ran into this craziness today, you can’t call it craziness, it’s just the way things are, it’s the paradigm shift where we have very low cap rates and debt rates going up. You have your cost to do a deal. By the time you run your cash flow diagram, your net cash flow per year can be not where you like to see it. Sorry to run it off here but the inflation—

Andrew: I want to talk about that because I think that’s one of the big things when I talk to our investors that they’re concerned about. You’re going in. You’re buying this asset at this cap rate, you’re planning out a 5- or a 10-year hold, and an exit cap rate. Today, we don’t really know what that exit cap rate is going to be because it’s heavily dependent on what interest rates are. What have you seen in the past? Have you bought assets, whether mobile home parks, apartments, or storage in a rising interest rate environment? How did that play out?

Lee: This is a good question. I really haven’t quantified, but we have bought parks over the years in rising interest rate environments with rising cap rate environments. I think that’s something that never seems to change. You have some fluctuation in rates, although interest rates are so contrived these days in a way. I mean look at what’s happening to our debt.

Realistically, if you had to run up and stop things by raising the real cost of money to beat inflation, let’s say, raise the cost of money, the government debt is so dramatic that a 1% or 2% increase in the—I once paid for debt for US government securities, there’s nothing left to pay the debt.

It’s fairly manipulated, it appears, but everybody’s in on the game. As far as forecasting in and out, you could assume that, well, if I’m buying it […], certainly that should sell at that rate. Maybe I’ll sell at a half a point higher because rates will move up, but that’s dependent upon each individual sponsor, each managing partner, the committee, or the asset management group that’s going to determine how that works out.

Andrew: Sure. We talked a little bit about expenses. Maybe we could talk a little bit about the revenue piece. What is consistent in the primary markets let’s say rent growth-wise, what have you guys seen over the last 30 years you’ve been doing this for rent growth? What’s a realistic percentage? Everybody says you could raise rents 5% per year. As inflation gets higher, you can always just raise your rates with inflation. Is that realistic or where are we off there?

Lee: You’re going to have to choose your points because you can only run it up so much. In some markets that are really tight, you can really jam the rents. Let’s say, really pitch them up high, in many instances, create a backlash and have some regulatory authorities weigh in on you. For instance, Oregon never had rent control. It was not allowed to be put on a local level. A couple of years ago, the state decided to go with—somebody comes in and says, all our tenants […] lately. You can’t really even buy a good hotdog anymore, that sort of thing. We’ll cry before the legislature and bingo, you’ve got rent control.

It’s not really an accurate assessment of what’s really going on because most people are living an affordable lifestyle without rent control. Then when you get rent control, it makes it even worse.

But to answer your question, I think you can trend with inflation at least and have to maybe add a little bit more than that. If you manage well with a park or the businesses in a market that has really high demand, certainly go above that. In many cases, you can take, once in a while, a more dramatic rent increase.

We could forecast 3%, 4%, or 5%. Of course, we have inflation realistically, close to 9% or 10% when we weigh everything in. Can you project that? Perhaps. I mean it’s easy to take apartments in the $600 rent market, but the rents are $500, you can certainly take a much larger increase at a 3% to 5% increase initially, bump it up, and then run it up from there.

It’s so interesting because so much of this business, because of the way it’s stratified, there’s no really concentration of a great member of parks in a given area, the rents can be all over the place. You just have to judge that. You have to be really careful not to make it really painful for customers. At the same time, we serve two publics, the investor and the tenant. Try to be fair to everybody, and want to make the tenants’ experience where they live a great one. I want people when going to parks that are involved to go, this is a nice park, rather than go, look at that, crappy place. Who would live there?

Because we invest back in the property in the long run. That pays back very good dividends, as opposed to neglecting it, taking it all, and cash flow. You can do it, but you’re better than investing back into it than taking the value in the long run.

Andrew: Yeah. I think a lot of the people we’re buying these parks from, at least with my firm, they somewhat have let these things go. They don’t realize that if they would have reinvested into these things, it would have paid them three-fold at the closing table instead of taking all the cash and not reinvesting.

Lee: That is exactly the case. Some people are squeezed. They want the cash flow or they don’t care. I care so much about the tenants or whatever. I think you really have to take care of your tenants, […] a nice environment to live in. The other side of it, they would then have more pride in what they own and then people look at the assets. I’m happy to have people take a look at it. I bought parks for people who go, wow. […] I would say a disaster. I go, yeah, but I know what we can do with that.

I bought a park here in 2018, not a big park but it was falling apart, horrible tenancy. I was able to remove a lot of the tenants because, at the time, we still do this in Oregon. We replaced probably 80% of the tenants, moved into new homes. This was an RV park, a mobile home park. Three and a half years later, we sold for multiple in a 42 IRR. You can’t do that every time, but I mean I don’t even like to say it. I want to do some business with you again, 42 IRR? No, that was probably an anomaly.

The fact is, if you can go in and see—it sounds like this is what you would do—an opportunity of something that’s really mismanaged, a lot of deferred maintenance, people don’t know what they’re doing, they’re not spending money in the right places, they don’t know that to throw some good money in the landscaping, which is probably the easiest way to increase the curb appeal and the look at your park, I don’t know, a nice sign and then start forcing people to clean up or head out. You get a nice story in the making for the tenants, you, and your investors.

Andrew: Definitely. Lee, let me ask you this. It seems like you’re more of a primary market guy, what are your thoughts on secondary and tertiary markets and mobile home Park investing in those?

Lee: That’s a good question. Years ago, we were very primary market-oriented, we’re building a large mobile home park portfolio, we had a great presence. We had 20 parks in Florida, a rather large one with 10,000 spaces, some have golf courses, elegant clubhouses, and so forth, some in Arizona, some of the biggest and best RV parks in the country and around the Phoenix metro area. Now, we’re sold off to own one of our investor partners, the time Calian Properties, it’s really, really nice stuff. Those are very institutional.

Nowadays, actually not so much primary market-driven because I’m trying to get better returns. We’ll look at secondary and tertiary markets in order to get those returns. I just haven’t been able to make a paradigm shift yet to buy the four caps. I haven’t had anybody come to me and go, I’d like to buy a four cap park. Let’s invest and do that. I guess we could. There are plenty of guys out there, whether they’re individual players, high net worth players or hedge funds, sovereign funds, and so forth can go ahead and do that even. I’m not there. Where do I want to be actually?

Andrew: I’m with you. I’m not there either.

Lee: I like secondary markets. I like tertiary markets that I think we’re seeing in this day and age, because of people’s frustration with what’s going on in some of the big cities that they like to get out of town and they like to live in a smaller market with their family and their kids. I think it’s a great choice. Whether you choose one that’s solely oriented in one industry or has a few different industries, that would be great. I mean, you might find a tertiary market and it’s all military outside. It can work right, unless it’s close to base down. It’s like […] factory in Maine. When it closed down, nobody’s left to work or live there anymore. I’m all in when you said to […] market, I want to go in.

Andrew: Let me ask you this, what are the most important things passive investors, we’re talking limited partnership, what do they need to look out for when investing into the mobile home park asset class?

Lee: Well, that’s a very good question. The investors that I have, and many of them are people I’ve known for years, friends of mine, high net worth people. I literally want them to know as much as they can about that asset and learn, know about it, and so forth.

You can leave it up to me and people will invest with you or I because they have the confidence in what we do, but I love people to know all they can about it. Know the guy you’re investing with. If somebody’s going to invest with you, you’re quite prominent, well known, you have a bit of a track record going, you’re a young guy, you could be whatever your dreams are that you are likely to achieve over your lifetime doing it methodically.

For me, we’re doing some investing now and then, my investors are frankly a bit picky. I’m like, we got to go to the park, the business didn’t work out right, they’re going to harangue you. You have enough uninterrupted nine or eight-hour nights of sleep as it is without an investor joining in on that too. I want to make sure my folks are well informed, invested in real estate before. It’s not to say I’m taking people into this and kind of new to the game but I like to help them out.

Ordinarily, I want people to know a lot about it. If they could study, read, and listen to podcasts (what you do). There are a couple of other industry guys, Frank and Dave have their thing. I tell people, go to Frank and Dave, go to their MH University, whatever it is.

My wife and I will be married for I think six years this coming weekend. She wanted to get involved in the business. I have her go to a Mobile Home University. It happened to be in Austin, I didn’t want to go. I wanted to go to a brisket safari, so it worked for both of us. She said, do you know about…? Yeah, I do know about that. How about…? Yeah, I know about that. I’m glad that people are learning that sort of thing.

A lot of people in this business have gone there and gotten really well educated. I think it’s money really well spent to read books about it, follow blogs, there are all sorts of interesting things you can get involved with to raise your level of understanding. The more knowledge you have about something, the more responsibility you can take for what you’re doing and have a certain degree of control in that too. Knowledge, responsibility, and control kind of go together. I think that’s important. That’s really, really important.

Andrew: Yeah, really important. Lee let me ask you this, when studying a new market to go into and to invest in, what’s one metric—if you have to narrow it down to one—that is most important for you?

Lee: I would say the demand for affordable housing in the area. I think that’s really kind of the key.

Andrew: How would someone find that out?

Lee: I think you would just see whether it be an apartment supply, how that’s going, where the housing supplies are really jumping in terms of its pricing and so forth. You can look into vacancy rates and other parks in that area. It is really hard to narrow down to one metric because that can really mess you up a little bit. But I like to see a bit of a diversified base and know that that area is growing somewhat.

You can be in an area that’s not necessarily growing but has a real stable ongoing flow of people that want affordable housing, whether it has to be military, whether it has to be a chemical plant, or whatever. Oil and gas is something I’d stay away from. I’ve always been a little bit reluctant to get into an area that has major swings regarding the business cycle. Diversified economy is great too.

To answer your question, one metric, hard to say, but I think the demand for affordable housing. See what apartment prices are doing, how occupied all those are, and then people’s ability to be able to buy homes in the market or whatever.

There are a lot of things that go into it. This business has become more complicated than it used to be I believe because years ago, if you’re buying a mobile home park or a manufactured home community, you can go into a community and you would find that there are a couple of dealers in town, apartments have a handful of vacancies. You find they’re placing homes in the park and they would sell. Nowadays, a lot of those […] are gone, and if you’re going to get in and fill a park, you have to do some arrangements to bring the homes in yourself, which adds a whole different layer of risk.

You have to have a skill set for marketing or really, really understand the demand or see that maybe somebody else next door is doing. I can see I can do that too because they’re buying this house and selling them for $50,000, $75,000, or $80,000 apiece. The other houses in that particular park might be selling for $20,000. That’s sort of an unnerving thing. Would you gamble that? These are all the assessments you have to make. It has actually made his business I think a little bit more hard to wade through than it was many years ago.

Andrew: Agreed. What does the perfect mobile home park look like in your eyes and why?

Lee: I think it would be in Bali for starters, near the beach. The perfect mobile home park, if money were no object, I mean, we can all have our dream park. I would be in an area that wasn’t rent-controlled and wasn’t going to be looking toward getting rent-controlled, that have been 20 years or newer, that have been on some public utilities. Underground infrastructure is in good shape, roads are in good shape, that sort of thing, with pretty high demand, and it would be in a good market.

It could be next to a primary market. Primary is a whole different level of perception we’re dealing with in mobile home parks as opposed to class A institutional investments for sovereign funds which are LA, Washington DC, New York, Boston, San Francisco, and maybe Chicago.

It’s all different when we’re dealing with mobile home parks. Phoenix would be great. Let’s say Portland, go to different parts, Denver, Orlando, Naples, Fort Lauderdale, all great markets, I wouldn’t mind owning them. You do run the risk in some of those markets. In Florida, I mean I lived in Florida for 14 years. There’s more than one time that a hurricane had my home as a bullseye, so that’s unnerving.

Those are risks you have to take. I think, just as I say, it’s going to be quality assets, diverse economy, 20 years or newer, […], 10 years or newer, all double-wide homes, or all single wide. People have really, really kept that up, you see the pride of ownership in it, but get onsite management. Onsite management is a whole other thing. That is your life as an owner and operator. Whether you sleep all right or not, it’s whether you have good onsite management or whether it’s a rodeo as well there.

Andrew: You’re so right. Last question, park-owned homes or tenant-owned homes?

Lee: Help me out, I’m not a park-owned home guy. I get involved with parks that had a few or went re-managed, third party management mobile home parks. Dealing with park-owned homes, I’ve seen it where you have a little […] making X amount of dollars. At the end of the year or two, whenever they move out, you’re going to spend all that money fixing it back up for the next person to […].

That’s not necessarily true with the newer homes. Some of that can work out really, really well for what you’re doing. Like the single family builder, rent stuff is a big deal in the market today. It can work very, very well if you’re buying mobile homes or manufactured homes. Manufactured homes, putting them in and renting them out. Good maintenance program, good management can be really, really wonderful.

Older homes have all sorts of problems. These homes do get abused. It can be hard to fix them up. For me, if I’m looking at a park, I limit it at 10% to park-owned homes or less, or probably zero. I’d rather have people and say, great, let’s bring them on, I can get all that extra cash flow with it, that’s a choice to make.

Andrew: I think people underestimate the costs to renovate a mobile home. I think they forget or don’t realize that the drywalls are different sizes, the doors are different sizes, and the windows are different sizes. Typically, it has to be special ordered and shipped in, which right now with the logistical issues, raises the price significantly.

Lee: It sounds like you’ve had some experience with that?

Andrew: Unfortunately.

Lee: You got to really massage that, it’s a real skill. You guys can do that really well. It’s just that I’ve chosen not to.

Andrew: Yeah, it can be difficult. Lee, how can our listeners get a hold of you if they would like to do so?

Lee: Stop on by. I can be reached at my email address,, probably the easiest way to do it.

Andrew: Lee, it’s been an absolute pleasure. Thank you so much for coming on the show.

Lee: I’ve really enjoyed it. It’s been great. Thanks for having invited me.

Andrew: 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. 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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