Interview with Mobile Home Park Operator Ryan Narus

Listen on Apple Podcast here: https://podcasts.apple.com/us/podcast/interview-with-mobile-home-park-operator-ryan-narus/id1520681893?i=1000495653961

SHOW NOTES

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 Ryan Narus, a double graduate of Wake Forest University with an undergrad in Psychology & Statistics and an MBA. He is a self made real estate entrepreneur who owns and operates 14 Mobile Home Parks spanning ~1,408 units.

But here’s the thing: He started with nothing. No money. No experience. No network. He was a 20 something with way more student loan debt than actual capital to invest in deals. He’s just a normal dude. The only thing that makes him different is that he refused to quit. And he was willing to sacrifice, and take bold action. He found creative ways to make money while he scaled his business up. He was stuck in Corporate America. He escaped. And now he wants to help others.

Today we’re talking about how Ryan got started in mobile home parks, his views on investing in mobile home parks, what he does to improve trailer parks, his perfect communities, wins, pitfalls, and everything in between.

***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 1,400 lots under management. His team currently manages over 20 manufactured housing communities across 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.

Are you getting value out of this show? If so, please over to iTunes and leave the show a quick five-star review. I have a goal of hitting over 100 5-star reviews by the end of 2021, and it would mean the absolute world to me if you could help contribute to that. Thanks ahead of time for making my day with your five-star review of the show.

Talking Points:

00:19 – Welcome, Introduction to Ryan

01:23 – Ryan’s background

03:06 – What hooked Ryan into Mobile Home Park Investing

05:35 – How long Ryan’s been in the business

07:38 – The parks Ryan has taken full-cycle and the length of the cycle

11:43 – The hardest part about the business

13:35 – Ryan’s perfect park

15:33 – Partnerships with passive investors

17:56 – What it looks like for Ryan, when he partners with passive investors

20:00 – Tips for passive investors

24:50 – Mistakes Ryan has made as an operator

27:00 – Ryan’s biggest win in the business so far

28:40 – Ryan’s view on park-owned homes

32:11 – Recourse on debt

32:34 – Plans for refinancing

34:17 – When a due diligence deal falls through

35:53 – Ryan’s vision for the next 10 years

38:32 – How to get a hold of Ryan

40:00 – Thanks and see you next week

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

Links & Mentions from This Episode:

Ryan’s LinkedIn: https://www.linkedin.com/in/ryan-narus-87293417/

Mobile Home Park Mastermind Facebook Group: https://www.facebook.com/groups/225028118382839/

The Archimedes Group: http://www.archimedesgrp.com/

The MHP IRL Podcast: http://www.archimedesgrp.com/podcast

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

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TRANSCRIPT

Welcome to the Passive Mobile Home Park Investing podcast with your host Andrew Keel. This is the podcast where you can get the education you need to invest 100% passively in a highly profitable niche of mobile home parks.

Andrew: Welcome to the Passive Mobile Home Park Investing podcast. This is your host, Andrew Keel. Today, we are going to interview Ryan Narus. Ryan is a double graduate from Wake Forest University. He had an undergrad in Psychology and Statistics and an MBA. He’s a self-made real estate entrepreneur who owns and operates 14 mobile home parks spanning 1408 units. Here’s the thing, Ryan started with nothing—no money, no experience, and no network. Ryan, welcome to the show. Happy to have you.

Ryan: Andrew, I am so pumped to be here like I told you when we were talking a couple of times prior up to this. I think what you’re doing is really important and necessary and not done in our space. I am utterly jazzed to be here.

Andrew: Awesome, dude. Why don’t you start out by telling the listeners a little bit about your background?

Ryan: Sure. I can talk about all sorts of fancy stuff. I went to Wake Forest, sold cars, won a bunch of awards, yada, yada, yada. Look, I was stuck. I bought the lie. The lie is work really hard in school, then you can go to a really good college, and then you can get a really good job. You work really hard, you get promoted, and you can retire on the beach one day.

It turns out that’s not really true. You work really hard in school, you miss a lot of stuff, you stress out, you look back in your early years and you’re like, man, I worried so much about getting As and I missed all these opportunities to grow in so many other important ways. And then you go to a great school, you’re like, hey, Wake Forest University, dream school, I get to go—I don’t regret anything about it. Until you get in the working world. You’re like, that’s a lot of student loan debt. I’m going to be paying for this for a long, long time.

And then you get that job where you’re like, great, I’m in corporate America. I’m making good money, it’s stable. Then all of a sudden, you realize, I hate this. I’m stuck with student loan debt, I’m at a job I don’t want to get promoted at, I feel underpaid and overworked, and it’s unfulfilling. I get tired of complaining. I just went, you know what, this is not for me.

I went out and I looked at over a hundred businesses to start. Over the process of about 10 years, I’ve landed on mobile home parks and flash forward about 10 years later, here I am today.

Andrew: When you found mobile home parks, did you come across an article? Did you read about it in an investment? I know you were in banking at Wells Fargo for a while. Did you find it there and say, wow, this looks like an intriguing asset class. What was the hook that got you?

Ryan: There’s a two-parter to this. First off, I was looking. I had started three businesses prior to mobile home parks—all of which failed. Most of it didn’t even get started. One of them was totally stupid in retrospect. It was me and my buddy trying to start a blog about which bars are the best to go to in Charlotte, which is ridiculous to think I was ever going to do that full time.

I was looking and I was reading a […]. I was challenging myself to read 50 books a year. I knew I needed to be an owner. This actually happened while I was selling cars. I have sold cars for four years. Sold a ton of cars—over 800 cars. It was about 18 cars a month, a little over that, closer to 19 cars a month. Won a ton of awards and was just totally unhappy. I was looking for more. During that process looking at over a hundred businesses (give or take). I eventually went, I really like real estate. There’s something special about this.

And then I bumped into Ian Tudor. We had grown up in the same neighborhood together. I was in Miami doing an internship with Carnival Cruise Line Corporate, and he was in Orlando working for Parkway, which is a multibillion-dollar REIT. We’re just hanging out and we were like, we are perfect business partners. We both had been looking at businesses to start. He was like, what do you think about mobile home parks? I was like, you know what, I love the show Trailer Park Boys. Let’s have a look, […].

We bought a Frank & Dave—we didn’t go to the boot camp, but we got their manual or whatever. Crushed through it and I went, this is it. My wife hates that I say this. Okay, she loves the first part, hates the second part. When I met my wife—I know this sounds like Hollywood—the stars just aligned. Everything just made sense. It was like, this is it. This is what I’ve been looking for.

When I found mobile home parks, the same thing happened. I went, all the boxes are checked, this is it. My wife is like, I utterly hate that you compare me to this.

Andrew: Oh my gosh, that comparison. Oh, jeez. That’s fantastic. How long have you owned mobile home parks? When did you buy your first park?

Ryan: It took some time. We started in July 2015. We’re actually on our five-year anniversary this month, which is exciting. It took us until September ‘16 to buy our first, so 14 months to get started. That was a joint venture. I had no money. Quite literally, I had more student loan debt than actual cash. What we had to do was cash out the finder’s fee from that deal and keep a sliver in it so we could learn the operations along with a strong operator. Take that finder’s fee—the majority of which we cashed out and invested in the next deal.

The third deal, we literally just quit our jobs and moved into the mobile home park and lived that life for 14 months learning everything from the frontline. That’s how I got started, and it took about two full years just about to actually go from learning about the business to actually getting started full time. That’s the big asterisk because I took a huge pay cut to do that. I’m literally paying myself a property manager’s salary. I’m literally living in a mobile home. I pay myself next to nothing, and that doesn’t include 401(k) or benefits which were gone as soon as I quit Wells Fargo.

I made a pretty big sacrifice. I had the vision at the time that if I’m going to grow this, I need to go full time, and I need to learn everything about all the nuts and bolts from the frontline.

Andrew: That’s awesome. That’s why I love you and Ian. Because you guys are just very hands-on, very involved. You’re one of the few operators that live in a mobile home park. I’m one of the other ones.

Ryan: I know.

Andrew: It’s a very special experience. As I’m sure you have a few stories of your own to tell. That’s really awesome that you guys have gone all in and done that, and now grown a nice portfolio. How many parks have you guys taken a full business cycle from when you bought it? And is your business model to buy, fix it up, value add, and refinance, is that your typical model?

Ryan: First off, I want to say that’s why Ian and I love you and what you do. I have to get that in there. When people ask me, who are your favorite people in the space? You are either the first one or one of the first people I mention because of what you do.

Andrew: Thank you.

Ryan: Right back at you, dude. We think the world of you. That’s probably because we are part of the same brotherhood of actually showing up. When you came on my podcast, I said this and I’m going to say this on yours. You have a one-up on me because you figured out how to get your wife to move in and stay in. My wife was there for about a weekend and was like, no, we’re out.

Andrew: I think we both have that in common. Where we have amazing partners. That’s a big part of probably why we’ve built these large businesses, that we have supportive partners that are right by our side. I couldn’t do it if my wife wasn’t pushing, assisting, and supporting.

Ryan: Like what you said before we hit record, if you don’t have a happy and healthy family, you have nothing. It’s just so important to have a wife—both of our wives—who are just so supportive of what we do. They realize it makes us happy. Regardless, if you’re making millions or making pennies—if it’s making you happy—you’re doing good in the world, it is everything (quite literally).

But to answer your question, the 14 deals that we bought, we have sold out of 3. We currently have 11 under our belt. The reason why we did that is just going to answer another question that you have lined up in a little bit is we don’t actually want to take investors right now. I actually have a handful of folks that I do joint ventures with. So 10 out of the 11 deals are literally just me and Ian, and one of our best friends—Jason. That’s it. The other deal I do with another one of my best friends. That’s it.

The reason why I do that is because I want to not have pressure from a pref or from outside investors. We can get into how much I’m costing myself by doing that, but what I’m gaining by paying for that later. To answer your question, my goal is almost always to buy and refinance. Because I’m trying to grow something. We started a partial college scholarship. We partner—I think you do too—with PayLease to help people build their credit. We love charity work. We love to give back.

What we’ve learned in a few years of doing charity work is you can’t be the jack of all trades and master of none. Otherwise, no one’s going to take you up on your charity work. For us, it’s not only an economy of scale by keeping it close-knit and by refining and growing. But also, from the charity perspective, we’re much more effective when we’re a little bit more tight-knit.

How many have I taken a full cycle where I buy it, fix it, either sell out my equity share. I’ve sold out three of my equity shares. I think we’ve refinanced almost all of them now. With the exception of the ones that we’ve just closed on. We try to get them refinanced within 12–24 months. We buy them ugly. For the most part, we’ve bought some really nice, really stable properties too.

What is the ideal property for Ryan? Ugly, has a lot of issues, need someone like me who speaks Spanish—self-taught in Spanish—who’s going to be there face to face with tenants, moving in homes, turning the tenant base, bringing in some really wonderful people, helping folks who are going to fit what we’re doing, find good, safe, and affordable housing outside of the community—the works. A very long way to answer your question.

Andrew: That’s great. What would you say, Ryan, is the hardest part of the business?

Ryan: There’s a lot of things. I would definitely say it’s two-fold. Number one, operating is really, really, really hard. The big reason why I started my podcast is I wanted people to understand that it’s not just you buy and it’s a coupon clipper. It takes a lot of skills that take a long time to develop. When things go right, yeah sure, it’s a coupon clipper. But name another business that isn’t.

I’m a big fan of Tim Ferriss and 4-Hour Work Week is literally all about a coupon clipping business where you don’t have to invest much time in. You don’t need mobile home parks if you want to own your business and then be hands off. The thing about mobile home parks that’s so risky, if you are an owner is, yeah, you might get lucky and have something that’s not a lot of work. Here’s the thing, at the drop of a hat, it can become an absolute nightmare of an operation. That is really, really hard. It takes a long time to develop those skills, which is why I’m glad you’re doing your podcast to help people see that there’s another option to invest in mobile home parks.

But also, finding deals themselves is really, really hard. Especially if you’re like me and you have a bulls-eye that you’re looking to hit. There are only about 300 mobile home parks I would consider buying right now. The majority of those are going to be really hard to get and take years because I’m not looking to pick up the phone and say, hey, do you want to sell? Okay, bye. I’m looking to build relationships over the years.

Before we hit record, I was telling you about a deal I have under contract right now, I couldn’t even tell you off the top of my head how long I’ve been talking to this family. But I found a thank you note that I wrote them two years ago almost.

Andrew: Two years ago.

Ryan: I’m looking to grind them out for a long, long time, build relationships, and go from there. It’s going to take a long time for me to scale, and I’m totally okay with that.

Andrew: Sure, and that piggybacks on the next question. What does the perfect park look like for Ryan Narus?

Ryan: Like I hinted at, I buy stable properties too. But for me, what is just utterly perfect is something that needs a lot of work that’s really close to my home. I live in Charlotte, North Carolina and one thing that makes me really, really, really proud to do what I do—be on the charity piece and helping kids get their education—is to go to a property, take a whole bunch of pictures, and then a year later, go back and take a whole bunch of pictures because here is what I see.

I see vacant homes. I see homes with issues. I see dirty, grimy, gross, under-utilized, and affordable housing. Flash forward a year later, I see people investing in their homes, building beautiful decks, telling their family about it, cleaning up stuff without even telling me that they’re doing it, and self-policing with the shenanigans. In other words, I’m probably just like most people listening in, we’re tired of seeing politics on Facebook. It’s really frustrating. No one really knows much about politics, and you’re going to lambast people. I don’t want to see that.

One thing we can probably all agree on is all politicians love to talk about affordable housing and do next to nothing to support it. Andrew, you and I, Ian, and like-minded people are doing something about it. We are going to a spot that already has affordable housing that is either vacant or not being done right. We are investing capital dollars in improving it, bringing in new families and providing our communities with affordable housing that is clean, you can help build their credit, and you can help them send their kids to college. That, to me, is a big part of my why. That if the politicians are not going to give the much-needed affordable housing, I will.

Andrew: Ryan, will you and Ian ever take on passive investors to partner with you in the future? What does that look like if you’ve thought about it or discussed it?

Ryan: Major dork alert, I was actually the president of the chess club in high school. Not that I was any good at playing chess. My favorite lesson from learning about playing chess and organizing chess tournaments in high school was that in chess you don’t have a scoreboard. You don’t really know who’s winning until someone says checkmate. How do you quantify whether or not someone is ahead in chess? You do it by available moves on the table.

In other words, optionality is how you know you’re winning in chess. For me, I don’t ever want to say I won’t do something. But for me, at this point in time, I’m trying to grow slowly and organically. I’m trying to enjoy my son, while he is really young. I’m hopefully going to welcome some more little kiddos into the world with time too. What I don’t want to do is grow too fast, grow wrong, or have the pressure of having to place capital and that distort the way I underwrite. I would rather grow slowly, have way too much money in the bank, and have that be uncomfortable.

Like Warren Buffet says, if you saw how much money I sat on for that long, you would be totally uncomfortable. That’s the mindset I’m taking into this. Eventually, what I will probably really consider is literally selling my portfolio to myself and bring on funds that way. Who knows? Maybe one day, it’ll make sense to have a fund. But for me, right now, I absolutely love just keeping it with my really close friends and growing it slowly how I want to grow it.

My quant professor said when I was getting my MBA, there’s more than one way to Charlotte. What he meant by that from little old Winston-Salem is you can take I-85, I-77, back roads, bike, plane, or a car. There’s more than one way to get to what you’re going. I’ve decided—at least in the short run—the most efficient way to get where I’m going is to do what I’m doing.

Maybe one day, I’ll sell my portfolio to myself. Or I’ll go, you know what, let’s go national or this or the other thing. That’s what we’ve decided on.

Andrew: Awesome. When you do decide to take on investors, have you thought about what that would look like? Compared to similar situations, how do you split up your deals then? Do you just split straight equity? People that you partner with, do you just give them a straight equity percentage and there’s no pref? How do you slice those up?

Ryan: Yeah. I invest money in almost every single deal that I have. The 11 deals that we currently have under management, only one of them I haven’t put any money into. For the rest of them, I put up the money, I get an acquisition fee, asset management fee, and a few other ways to incentivize myself. That way we keep the incentives aligned.

Again, I front-load everything. My thought process is that even though that will cost me in the long run. I’ve done the math way too many times, and It will cost me in the long run. But in the short run, I’ll have more cash. If I have more cash, I can do more deals the way I want to do them. I can live a lifestyle that I want to live. Rather than have to wait to return all investors’ capital, bank on refi-ing, getting the appraisal that I want, and returning all that capital.

Again, I want to be very direct about this. I am costing myself money in year 10. I am making more money today, and I value that money today.

Andrew: I like it that you know what you want and you’re firm on that. You’re not trying to fit anybody else’s mold. I admire that. For passive investors that are looking to invest in the space, what would you say are the most important things that they need to look out for when investing in mobile home parks? I’m sure you have met and spoke to other investors that are just looking to passively invest. What are your tips for them? What do you tell them?

Ryan: First and foremost, educate yourself. I don’t just mean on the space. I mean on with whom you are partnering with. In a very small industry, there are some folks who are very loud in this space and are literally getting sued for fraud.

Imagine taking half of your life savings and dumping it in something that you are sold on and someone you were sold on only to find out they actually don’t know what they’re doing. This is my absolute, the biggest advice that I really wanted to say when I came on here, is you must vet with whom you are partnering with. Just because someone tells a really sexy story and seems really smart, seems like they got it together, that does not mean they know what they’re doing.

I will tell you what is horrifying from my standpoint. I don’t view myself as an expert. I started my podcast as a 20 something who is like, you know what, I just want to tell people how to get started in this space. I’m not going to position myself as an expert because I really don’t feel like I am. It is absolutely scary to me seeing how many people have raised a whole lot of money and end up asking me extremely basic questions. Horrifying.

I know people who couldn’t even tell you how many vacant pads or vacancies that they have. Here is $50,000 of my money, how many vacancies are in this property? I don’t know, and I can’t give you an answer within an hour. That’s terrifying. To me, the most important thing you need to be able to vet the people you are partnering with, which is why I am so excited you are doing this podcast. Because it is just absolutely crucial for folks to know who they’re getting in bed with quite literally.

Here is how you can do that, in my opinion. You can educate yourself. I think that if I won the lottery and I don’t want to work another day in my life, what I would do is I would educate myself as best as I could in a space so that I could grill the people I am investing with.

Once you invest with them, I think you should probably stand back and let them do what they do. I’ve heard horror stories about investors calling up and arguing whether or not they should’ve bought a microwave for one of the employees. You’re like dude, you’re missing the big picture. A microwave is a couple of hundred bucks. Stupid.

To a certain degree, you don’t want to grill the people you’re investing with. But you got to do that on the frontend. Because if you ask them really basic questions and they don’t have very good answers to that, that is a huge red flag. The only way you’re going to pull that off is if you really, truly understand the space you’re investing in.

Before you ask the next question, I have to get this in. Former Pepsi CEO, Steven Reinemund, I had the fortune of sitting down with him twice and chatting through several things, including mobile home parks. I remember him going, this is a really good idea that I will never invest in. I was like, is this him being a politician here?

What I realized is—because he actually ended up hooking me up with the family office and private equity shops, a couple that he invests money in. The interesting thing that I learned from that meeting was that he only invests in things that he understands. Convenient stores, distributions, drinks, stuff like that. His big lesson to me—in terms of how to invest passively when you made it—is you still only want to invest in what you know.

He wasn’t insulting me, telling me no, or politely saying please don’t ask me for money. He was trying to teach me a lesson and it stuck, which is you want to invest in what you know. The reason is exactly what I just said right there. You educate yourself on this space so you can make sure you’re not getting duped by a con artist. Because let me tell you something, I’m going to say it again, there are some con artists in mobile home parks that are getting sued for fraud right now. You do not want to be caught.

Andrew: And there are con artists in every industry. You could search on Google and find a ton of news articles. It’s really sad. I back what you’re saying. The more educated you are on the industry as a whole, the more you’re going to be able to ask educated questions and know how to expose any holes in an operator story. I 100% agree with you there. That’s really, really important. One additional question I would ask you is, what is one of the biggest mistakes or incorrect pro forma projections that you made as an operator?

Ryan: Ian and I made a huge mistake on the second property we ever bought. I actually made an entire podcast episode about this, where we didn’t check the water bills. We thought, hey, we submeter the water and you can pretty much so make that as zero. What ended up happening was, we had a mystery water leak. We literally couldn’t find it for years. We ended up having to replace about 40% of the property, infrastructure, and the main lines.

Andrew: Install them.

Ryan: The main lines, yup. And install a pump because the city was only giving us 18lbs of pressure at the bottom of the hill. It was a ski slope. People couldn’t take showers at the top of the hill. We ended up spending $150,000 replacing lines and installing a water pump. About nine months ago, it went back to normal. It went back to normal, broke again, and now it’s back to normal. Knock on wood, it’s been back to normal for nine months.

But this is a twofer. Number one, CapEx is the silent killer of mobile home parks. You’ve got to diligence hard on your infrastructure and really understand it. Number two, just because it’s city water doesn’t mean that’s gold, and you’re gold and you don’t have to worry. Because the truth of the matter is, I don’t think any of my properties I collect 100%. Honestly, if I can collect over 90%, I’m doing cartwheels. Just because you think you can submeter and bill back doesn’t mean you’re going to collect 100%.

Andrew: Yeah. We had the opposite issue in one of our parks where the PSI was 100 coming out of the main. All of the lines kept bursting. We had to put a pressure relief valve on it to reduce the pressure. Definitely want to spend a lot of time on your infrastructure and making sure that that is key in due diligence. Man, thank you for sharing that with us. I agree.

What’s the biggest win you’ve had in the business so far?

Ryan: I absolutely love every one of my properties. But the easiest one to tell quickly is our countryside property in Spartanburg, South Carolina. It was a zone for 68 lots. It has 65 viable pads. It had 52 homes on it when we bought it, 45 of which were park-owned homes. One of which was an office, and it was a mess. The city sewer was getting sued by the attorney general of the state of South Carolina. They were absolutely ripping people off. It was bizarre because I literally called the attorney general, I was like, I can’t believe I’m doing this. They knew her by her first name.

Andrew: Jeez.

Ryan: I know. I couldn’t speak. I was like, oh my gosh, not only am I not the only one, but I’m not the only to the level where they know her by the first name. That’s crazy. It’s a mess. Of the 45 park owned homes, there were 29 residents. There were $15,000 of collections issues in the middle of the month when we closed on February 15. Right in the middle of the month.

In other words, there are water leaks, they weren’t billing back, city sewer was owned privately, and the woman was just absolutely taking people for a ride. The thing about it was, Andrew, it had great bones. It had absolutely wonderful bones. This was a heavily marketed deal.

Andrew: It was mainly park-owned homes, you said. Were the homes in good condition?

Ryan: Not at all.

Andrew: You guys don’t mind park-owned homes, correct?

Ryan: I actually really like park-owned homes. They’re high risk, high reward. But now that I feel like I have enough skill, I can really turn a community and bring in folks that I have screened. Because I find one of the biggest issues with mobile home parks is you are looking at a tenant who is a high risk, to begin with. Low credit or no credit, no income, and you want to hit them with a bulls-eye. Which is you don’t have any vicious pets, you’re going to follow my rules, and you’re not going to move. I’m going to trust a mom and pop to have done that right?

To me, it’s riskier, don’t get me wrong. Hence, why I don’t have a Fund This because I want to take this risk on myself, get it stabilized, and fill a community on my own. To me, I love them. But for the countryside, it was exactly what I was describing earlier. It was a whole heap and hot of a mess with a wonderful property right by the mall. Everybody knew about it. It got from a national broker to a local broker to just a broker just getting started. Everybody had seen it.

Every now and again, I get a line being like, I could’ve bought the countryside for cheaper than you. It’s like, okay, great. Thanks, dude. Guess what, I leased up every single home. I brought in 14 new homes. We currently have 64 homes on that property—63 residents, 1 is an office. I’ve got one vacant pad we’re waiting on moving a home into because the city took over the sewer lines, which is great, and they’re going to eliminate the lift station, which also gave us a ton of issues. Once that’s done, we’re going to have 64 residents, 65 homes—possibly sell off the office too at some point.

Long story short, we got a construction loan from Integra Bank. We basically were able to finance fixing up homes, fixing other issues, bringing in new residents. Within 90 days of collection, the issues were all but gone. A year later, the worst thing about that property was still the fight we had with the city sewer. Now, the rent roll is over the double. The gross revenue is over double. We refinanced it for way more than what we bought it for, and we did all of that by showing up.

Ian and I did that face to face, speaking our broken Spanish, sleeping on that property when we had to. We grinded that out. It has not only rewarded us, it has rewarded the residents because we have some of our favorite residents there who we know personally, face to face.

The city is a fan of it too because one of my college buddies used to be the assistant to the DA in Spartanburg County. She was like, the narcotics team isn’t out there anymore. Thank you. The crime has just absolutely plummeted because we got a bunch of knuckleheads out, and we brought in some wonderful families. That to me, everybody has won—the residents, the local community, obviously, we’ve won as well, and the person selling out of it was ecstatic to get it off their books too.

In other words, that’s by far the best story I have because everything that went wrong, I was able to fix and everybody won.

Andrew: That’s great. The win-wins are always the best, for sure. In your deals, since you’re doing JV partnerships, who signed a recourse on the debt?

Ryan: All of us.

Andrew: Everyone is?

Ryan: Myself, Ian, and Jason—the three amigos. And then any other JV I’ve done, I pretty much the only partner with my other really good friend. It’s always recourse. It’s all recourse.

Andrew: Got you. Do you have any plans of trying to refinance into agency debt? Have you guys got agency debt on any of your properties or it’s not recourse?

Ryan: We haven’t. We struggled with that because our strategy is buying, as you know, really heavy value-add stuff. The problems I’m running into are that I’m going to need to dump a bunch more capital in to upgrade the quality, which is problematic. Even if I do that, the really big stickler is there’s a big difference between, for example, my Spartanburg portfolio is 3 properties is 140 lots. It’s about as stable as you can get. Almost completely city-city. My Eastside property has septic. But because there are not 140 lots in 1 community, it’s spread out. It’s become really difficult to convince agencies.

Now, I say that and I do believe, eventually, we will be able to make that argument with several years of P&Ls. Once we dump a little bit more capital into it that hey look, just because it’s not 140 lots in 1 parcel, doesn’t mean you don’t get that strong economy of scale, doesn’t mean that we don’t have those relationships with the local police officers in the county. This should still qualify. I think post-COVID, we’ll reengage that and we’ll probably be able to score it.

But for right now, we are totally happy with BB&T and with a couple of other banks we’re working with. For now, we’re just going to ride it out.

Andrew: That’s great. When you’re doing a deal, the due diligence costs add up. Usually $10,000, $15,000, or something like that. And the deal falls through, is it split equally then between all the partners?

Ryan: Absolutely.

Andrew: Okay, got you.

Ryan: That’s how we’ve always done it. We usually pay for it upfront. Since I do my own books and I’m the accountant, I keep track of every dollar. And then at the end, if we back out, before we hit record there’s one we just backed out of. It was tough because we had been working that lead for about three years. Found some infrastructure issues that were going to cost us a mint. I’m not going to make that mistake again. I think we spent $2000 in diligence, we’ll cut that up, and that’ll be all she wrote.

Andrew: It’s part of the business. I remember that deal that you and I looked at a long time ago in Fayetteville and that well system. What did we find? Radon in the EPA results. We just had to pull the plug. Some deals just don’t work.

Ryan: That was crazy, by the way. That one did sell, and the person who bought it did end up having to tap into city water. I remember we caught that about at the buzzer. We were absolutely right. You could not drill another well there. There were a thousand yards to tap into the city sewer. It’s going to cost $600,000.

Andrew: Oh, expensive.

Ryan: I haven’t spoken directly to the person who bought it, but I know a friend of his. He basically echoed the exact same thing that we found in due diligence. That cost a mint.

Andrew: Where are you going to be in 10 years? What’s your endgame goal? Will you and Ian still be partners? What does that look like?

Ryan: If you ask Ian, he would say we have an unbreakable bond. It took him a couple of whiskies to admit that. Again, my wife hates that I use this example, but I think one of the best qualities about the relationship my wife and I have is we disagree really well. I know exactly what she’s thinking and vice versa. We’re going to disagree, but because we can get through it together, we can be completely honest with each other.

That, I believe, is what Ian and I have, I can tell him anything and vice versa. And know that we’re going to get really mad at each other sometimes and possibly even say swear words and hang up on each other. But then a couple of hours later, we’ll go, hey, I was out of line, I’m sorry. We’ll be able to get through it.

Because of that, as long as our interests don’t grow apart like he wants to get in development one day and I don’t. As long as our incentives and interest continue to align, we’re probably always going to be business partners. In 10 years, I will be a mobile home park person. I absolutely love what I do. I have found what I want to be when I grow up.

Now, do I think it will look the same? No, I think I will probably be more of a COO-type by then, and I will probably have some kind of education wing. We started a mentorship program. So far, it’s been awesome. We’ve got basically three people. We just dump a ton of one on one time into it, and we’ve loved that. If we’ve continued to do that, that might be really fun. I don’t want to be an educator, but I don’t mind being a personal trainer type coach. I could imagine myself doing that, doing more speaking gigs. All of it will revolve around one thing­ and that’s helping people because I absolutely, utterly love helping people. Whether that’s my own residents, jumping on your podcast, jumping on other people’s podcasts, or taking calls from folks who may never buy a mobile home park and may never invest in a mobile home park—I don’t care. I want to help people and I don’t need anything in return.

In 10 years from now, as long as I can find a way that I feel like I am helping people, I will still be happy doing what I’m doing and how I’m doing it. If you’re listening in, feel

free to reach out. I don’t need anything in return. I thoroughly enjoy helping people.

Andrew: That’s fantastic. Tell the listeners how they can get ahold of you if they have any questions. I’m sure they will want to continue following you. If you do start taking on passive investors, they will be on your email list, ready to participate. Tell listeners how to get a hold of you.

Ryan: Like my favorite rapper, 2Pac, used to say, I ain’t hard to find. Let me explain. As dorky as that may sound, I am the only Ryan Narus in the world (that I know of). It’s spelled Narus. The first thing—I believe when you Google me—that comes up is LinkedIn, and I have a wide-open door. You can add me on LinkedIn, you can shoot me a line there, you can go to my website, which should be one of the first things to show up on Google—archimedesgrp.com. It’s going to link directly to my email there. It lists all of my content.

I do quick YouTube videos. If you’re curious about the space, I’ve got my own podcast. Like I said, I ain’t hard to find. If you reach out to me, I don’t really care who you are. You can be broke and unemployed or the CEO of a major company, I am happy to help you and I will give you my time because I thoroughly enjoy others, and I want to leave this world a better place because I was in it. Please, do reach out to me if I can help you in any way.

Andrew: Awesome, dude. Thank you so much for that. Thank you for joining us here today. It’s been fantastic. I think you added a lot of value.

Ryan and Ian also are the moderators of the Mobile Home Park Mastermind Facebook group. I definitely recommend you check that out. I think it’s facebook.com/groups/mhpmastermind. That’s a great way to get plugged in and get more info on mobile home park investing.

Anyway, that’s it for today. Thank you all so much for joining us. Until next time.

Hey, are you getting value out of this show? If so, would you mind please going over to iTunes and leaving the show a quick five-star review? I have a goal of hitting over 100 5-star reviews by the end of 2021. 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.