Listen on Apple Podcast here: https://podcasts.apple.com/us/podcast/interview-with-sumeet-makhijani-of-easy/id1520681893?i=1000546317995
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 Sumeet Makhijani of Easy Living Communities. Sumeet brings a unique perspective to mobile home park investing as he is a plastic surgeon with a deep passion for mobile home parks. Summit tells his story about how he got into manufactured housing, he also answers questions about his biggest infill project and why he chooses to invest in the midwest compared to coastal cities. Summit has his Master’s of Real Estate degree from Georgetown University and also has a medical career he manages on the side, Sumeet shares what he has learned in this episode of the Passive Mobile Home Park Investing Podcast.
Sumeet started off with a medical degree from the University of Tennessee College of Medicine. He completed an integrated plastic surgery residency program in New York and began a career as an Assistant Clinical Professor of Plastic Surgery at Columbia University. But, his passions didn’t just reside in medicine. Sumeet has always been interested in real estate. It is a family affair after all, since both of his parents worked in the industry. Not only is he the co-founder of Easy Living Communities, he is also the co-general partner on a 96-unit multi-family development in Nebraska, called Benson Mill.
Easy Living Communities focuses on acquiring value-add mobile home parks all over the country. They provide their homeowners with affordable housing that is both safe and clean. They also ensure their investors have dependable returns.
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: 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 head over to iTunes and leave the show a quick five-star review. I have a goal of hitting over 100 total 5-star reviews by the end of 2021, and it would mean the absolute world to me if you could help contribute to that. Thanks ahead of time for making my day with your five-star review of the show.
Would you like to see mobile home park projects in progress? If so, follow us on Instagram: @passivemhpinvesting for photos and awesome videos from our recent mobile home park acquisitions.
00:21 – Welcome to the Passive Mobile Home Park Investing Podcast
02:00 – How Sumeet started his career in real estate, specifically mobile home parks
04:28 – Struggles during the first year
06:20 – Why Sumeet loves working with trailer park brokers
08:40 – How Sumeet balances his work life
09:29 – Struggles with property management
12:45 – Helpful tools and software
15:05 – Important things passive investors (Limited partners) need to look out for
18:09 – Knowing your market
21:19 – The perfect mobile home park
23:09 – Sumeet’s current portfolio
24:22 – Park-owned homes versus tenant-owned homes
25:35 – Biggest infill project
28:45 – Where is the market going? How will mobile home parks fair in the future?
30:50 – The worst case scenario for an investment
34:28 – Getting in contact with Sumeet
36:06 – Conclusion
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Links & Mentions from This Episode:
Easy Living Communities: https://easylivingcommunities.com/
Sumeet Makhijani’s Cell: 402-850-1315
Sumeet Makhijani’s Email: firstname.lastname@example.org
Rent Manager: https://www.rentmanager.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/PassiveMHPin…
Andrew Keel Instagram Page: https://www.instagram.com/passivemhpi…
Andrew: Welcome to the Passive Mobile Home Park Investing podcast. This is your host, Andrew Keel. Today, we have an amazing guest in Mr. Sumeet Makhijani of Easy Living Communities. Before we dive in, I want to ask you a real quick favor. Would you mind please taking an extra 30 seconds and heading over to iTunes to rate this podcast with five stars? This helps us get more listeners and it means the absolute world to me, so thanks for making my day with that review of the show. All right, let’s dive in.
Having grown up in Chattanooga, Tennessee, Sumeet is the principal and co-founder of Easy Living Communities, a real estate investment company that focuses on mobile home parks in the Midwest and Southeast. Founded in 2020, ELC currently owns six mobile home parks in four states with approximately 300 lots.
His other real estate experience includes a 96-unit multifamily ground up development in the Omaha, Nebraska market that recently received its certificate of occupancy just this past month. He also has invested in some commercial retail.
Sumeet completed his Master’s in Real Estate degree from Georgetown University in 2019. Prior to entering the real estate field, he worked as a reconstructive plastic surgeon for the last 10 years, and still works part time as a surgeon. Sumeet, welcome to the show.
Sumeet: Thank you so much for having me, Andrew. I appreciate your time today.
Andrew: I’m excited to learn about your business and learn about your story. Maybe you could start there and just tell us how you got into manufactured housing.
Sumeet: A lot of that was in the introduction. I grew up in Tennessee and I had a one-track mind to be a physician my whole life. Basically, I loved my pediatrician and thought, okay, I want to be a pediatrician. So that was my original entry into the career. I got through medical school and realized I did not enjoy being a pediatrician or thought I would ever be one.
I kind of pivoted and went into plastic surgery, which was something I really loved doing, putting people back together and making them whole. That was really my motivation for getting into plastic surgery. I did that, completed my residency, took me about six years to do that, and then have been working full-time ever since. I’m in my 10th-year practice, I was full-time up to January of this past year when I went part time for the first time.
To answer your question about how I got into the mobile home park space, I met my business partner about 10 years ago, but we weren’t really doing much in terms of real estate until about five years ago when we started doing multifamily development. That was our first deal together. Then about last summer in 2012, he said to me, I think we should think about mobile home parks.
It was not an area I’ve ever considered when I was doing my master’s degree. I thought I was going to be a real developer. That’s what I was preparing myself for. When we did that one development together, I thought we would just do developments from here on out. He had always been thinking about mobile home parks. I have to give him a lot of the credit for getting into this business to my business partner.
He mentioned it to me in the summer of 2020. I said, okay, well, I’m open minded to anything really. You’ve always led me in the right direction in terms of what we look and do, so I committed to it. Like a lot of people getting into mobile home parks, I did Frank Rolfe’s Boot Camp, which is, I think, probably what most people do when they start thinking about mobile home parks pretty seriously. We formed Easy Living Communities last summer and bought our first park in November of 2020.
Andrew: Wow, that is fantastic. Six parks in a matter of a year. That is some pretty fast pace you guys are growing at. Maybe tell us about that. What have been some of your struggles through that ramp-up process with management, with acquisitions, everything?
Sumeet: I think a lot of times you have a theoretical idea of what things are going to be like when you start getting into any kind of asset class. We knew apartments pretty well, but didn’t know much about the mobile home park space outside of kind of the theory that we had learned in the boot camp. We got into our first park really through a broker relationship that we’ve had for many, many years.
Timing was everything in that park. It was an off market deal that we got to this one broker who had never really had a park in his whole career. He had a 30-year commercial real estate business but had never done a mobile home park. We mentioned it to him. We’re getting to the mobile park space. He said, I had this off-market deal that I just got approached with. We made that happen in November of 2020.
That led to a second park through a broker in his office. Third park, we got through an appraiser that we knew. Then a fourth park came through a previous broker relationship when we were looking at apartments more seriously. That was the first four parks. Parks five and six came through another broker in a different state that we had formed a relationship with.
All have been off-market, actually, which has been really fortunate for us. But we’ve just been lucky with timing and relationships. That can be something I bring up over and over again, Andrew, and you know how true it is. So much of this is just being at the right place, the right time, and knowing the right people.
Andrew: It seems like you’ve done a good job cultivating broker relationships. Is that something that comes from you or your partner? Is that something you’d recommend for other operators out there?
Sumeet: I would, yeah. I think brokers hold a lot of keys to success. We’re very fair to our brokers that we work with. We believe we treat them well and compensate them accordingly. We think that they’re really important to our growth and it’s really been a big part of it.
You asked me a question. I’ll go back to the one thing you asked me about struggles as we’ve grown. I think when we got into the first park, the first park was almost a pretty ideal park to start with. It just really needed a lot of rent increases, but it was a fully occupied, beautiful, gorgeous park. Probably one of the nicest parks in the city that we’re in.
That one really wasn’t a heavy lift, or it wasn’t infill, or it wasn’t kicking out a bunch of people. It was really just a setup for a success-type park. That one really wasn’t a lot to do on the front end. But as we’ve gotten more parks, there is more work that we’ve had to come across to get […], so to speak.
We’ve learned a lot of lessons in those six parks and managing them. My partner and I manage them pretty much. With our managers on the ground, we pretty much oversee them. We’re kind of pretty much it. In terms of the management, you’re talking to them.
Andrew: Wow, so you guys self-manage now, you and your partner on the sites.
Sumeet: That’s right. We’ve done it that way since the beginning and have just always felt most comfortable with that, and haven’t really third-party managed any of our parks, but I know there are people who do that.
Andrew: Definitely. I remember those days because you’re growing, but you need a certain amount of parks. You hit a certain threshold to be able to hire someone to come help you out. I self-managed. I didn’t have a partner. I self-managed my first five parks and then slowly hired on after that.
Now that we have 33 parks, it’s like a whole organization, just like the managed company is. It’s a lot more streamlined. It’s just a whole different game. But that six parks is a tough number, especially if you’re still doing surgeon work on the side. I’m sure that it takes quite a bit of time.
Sumeet: It’s like you have two full-time jobs in many ways. I’m pretty fortunate where I work that I’ve been given the opportunity to work half-time. I work two weeks a month as a plastic surgeon and two weeks a month full-time in our business. But even when I’m working as a plastic surgeon, my evenings and weekends are occupied with our park business.
It’s kind of like two full-time jobs. You are right, we’re in that kind of intermediate stage where we’re a little bit too small to have a ton of employees, but getting to that cusp of being able to hire somebody, which would definitely take off a lot of things off my plate, which is what we deal with day to day.
Andrew: Definitely. With the management, tell me about some of your struggles there. You mentioned infill briefly, collections. Maybe we can start there. What do those look like?
Sumeet: When you take over a park, as you know, there are things the way they’ve always been done at those parks. Sometimes they’ve been done that way for 20 years or 15 years. Oftentimes, you’re taking over a park where collections have been done a certain way, tenant screening has been done a certain way, renting out homes has been done a certain way, and then you come in and try to do things your own way.
One of the things that we have found is, being only there are two of us doing this, as a manager, we have to really rely on technology and we have to rely on communicating with our managers directly. So we focus a lot on collections, of course, because that’s really the lifeline of the business. We’ve moved very fast to advance our technology as much as it will allow us so the tenants will abide by.
At the beginning, when we start taking over a park, people are paying with money orders, cash, credit cards, and all different ACH. They’re paying all the different ways and we’ve streamlined it to ACH and cash pay. We’re doing that through our software program and having people pay it to big box retailers so that it prevents me from having to try to find if they’ve paid, if they haven’t paid, how much they paid, all that kind of stuff.
Andrew: Do you guys use Rent Manager?
Sumeet: We use Rent Manager, PayLease. I have found that to be really helpful and maybe you use that too?
Andrew: Yes. That was a game changer for us.
Sumeet: Yeah, absolute game changer.
Andrew: At Frank and Dave’s Boot Camp, he’s like, everybody can pay no cash but just check and money orders. That’s when we started out. But then at a certain point, we have so many checks and money orders coming in. You have to have someone just to go through all of those and document everything. The PayLease was a huge deal. That was like, either we hire someone to just do that or we use PayLease, and it was a no brainer.
Sumeet: Right. That’s how we found things to be early on. We didn’t wait 10 years to implement it, thank goodness. We figured out pretty quickly that that’s going to be something we have to implement. We really don’t want our managers handling a lot of cash. It’s not safe for them or the business, frankly.
It’s kind of very into the nitty gritty here, but we found PayLease to be something that has been very beneficial to our business. I’d say that’s been a big help and relief as we’ve grown. We rely on technology. We do all the same things a lot of owners are doing with technology in terms of driving the parts of cameras so we can see every other week what the park is looking like, making adjustments as necessary, handling all our applications online, going through the credit and the criminal history all through third-party screeners. All that stuff, we’ve tried to fine tune as we keep growing to make our lives a lot easier.
Andrew: Tell me about that software outside of Rent Manager and PayLease. What other softwares do you guys use? Because two people to manage six parks, I’m sure you guys have some good systems in place.
Sumeet: We’re getting there. We’re not a perfection. I don’t think we ever will be, but we keep trying to learn as we go. One of the things that we’ve implemented is just tenant screening through a website, apartments.com. They handle all the basic tenant screenings. We just send tenants an online form, they fill it out, and they pay a fee to apartments.
We don’t really ever have to touch money or handle that kind of thing. We get a criminal history, a credit history. We get references, we get their monthly amounts that they make and that sort of thing, employers, et cetera. That has saved us some time in terms of applicants.
We’ve handled all payables through AvidXchange, which is a program that yourself can submit the invoices or the vendors can submit the invoices through avid portal, and then we just log in every so often and do a few clicks. Before you know it, the checks are being processed or they get a credit card payment out to those vendors.
I used to do the kind of mom and pop way of doing things. You’d get the bill in the mail, you’d write the check, you’d document it, so that took time. It still takes time to go through Avid—don’t get me wrong—but it’s a lot more sophisticated. It’s all historically kept. It goes right into our software and Rent Manager, so that’s also been very helpful.
Andrew: Do you guys use Rent Manager for the accounting side of things?
Sumeet: We do.
Andrew: Okay, nice. One thing that’s pretty cool about Rent Manager is all the APIs to other software. It’s like PayLease, like AvidXchange. We use MRent for the background check process, and that’s been pretty good for us.
Sumeet: Something we may switch to. Now that you’re telling me about that, I’ll look into it. We’re always open to new ways of doing things and new technology because it really is helpful for just the two of us.
Andrew: Totally. Sumeet, tell me this. What are the most important things passive investors—we’re talking limited partners here—need to look out for when investing into mobile home parks, knowing what you know today?
Sumeet: I’ve invested as a limited partner in apartments previously. That’s really been my only experience. I invest in all our parks. So all six of our parks, I’m invested in, and some of them very heavily. I’m also an LP in all our parks.
People who are LPs, what they should be looking for is number one, you should get to know the operator, the general partner. I think that’s critical. I spend some time with them, get to know them, see if it’s a right cultural fit, see if you guys have the same values, see if there’s the same expectations from that person.
The first person I ever invested with is a limited partner. I literally wanted to get into real estate so bad. I just called this person up and said, I’m ready to invest with you and did not know anything about them, which is not how I would really recommend going for, and that turned out fine and all. All of our investors, at the beginning, we’re friends and family, so they knew us for many, many decades in certain situations.
For them, the trust was already there. Our reputation was already made. They had faith in us. We picked up investors that I didn’t know very well, frankly, when we started. So for those people, we get to know them, they get to know us. Again, we tell them our story, our vision, how we see our business growing.
I think the first thing I would tell any person interested in passively investing is get to know the operator, get to know the markets that they’re interested in investing in, why they’re investing in those markets, and then make sure you understand the game plan moving forward or the business plan.
One of the things I’m sure you and I will talk about, what maybe separates us from maybe other operators is that I think we have a very long-term horizon with all our properties. When people come and invest with us, they know we’re looking at things, decades plus kind of holds with strategic refinancing. So we’re not necessarily ready to turn in flip properties every two, three, four, or five years. That’s not our game plan.
Our investors kind of have a long term horizon just like we do. That’s something that you’ll have to determine with your passive investors. Do they want their money back in a year, two years, five years? What kind of equity multiple are they looking for? Do they want to hold things for the long-term? Do they want to hold things for the short term? What’s their appetite for leaving their money in a deal for a longer period or not?
I think that’s another important thing. Those are some high level things that I think a passive investor should look for when they’re looking at the person they want to spend their money with.
Andrew: Those are three great reasons, great ways to start. I want to go back to know the markets because I know you guys are in the Southeast and the Midwest, which are very different markets. Tell me about your strategy behind that and where you see yourselves in the future as you look to continue to acquire.
Sumeet: I think we started in the Midwest because we knew those markets well. I went to college at Creighton University in Omaha, so I knew the Omaha market, I knew the Midwest. I’d been there for many years, six years. My business partner has been there for seven years.
Between us, we had about 13 years of combined experience living in the Midwest, and we knew those markets pretty well. That was an area of comfort. We knew that maybe there was more value to be had in the Midwest than maybe a coastal city. My business partner and I would love to be in Phoenix, Arizona, or some places, Seattle, Washington, or Portland, Oregon, or places like that.
We know that the opportunity for two new guys starting in this business was small in those kinds of aggressive markets where prices are extremely high. We focused on parts of the country where maybe things were a little bit underappreciated. Having lived in Omaha for 13 years, between the two of us, we knew that there’s a lot of potential that people just don’t really appreciate. They think of them as flyover states.
I think maybe the word is getting out, of course, but still there’s a lot of (I guess) from national players, they don’t really see the value in certain markets more than others. We started in the Midwest and that was kind of our focus. I grew up in the Southeast, as you mentioned in my introduction, so I love the Southeast a lot. I love the markets there, great weather, population, job migration.
You see a lot of positives going towards the Southeast, so we wanted to be in that part of the country. I think the focus for us was Midwest and Southeast because of our backgrounds and we knew that they were markets that we could probably grow in.
Andrew: Very cool. I love that. I went to college in Sioux Falls, South Dakota, which is just down the road from Omaha. I love the Omaha market. We actually own a park just outside of Omaha, a couple of them, one in Norfolk and one in Denison, Iowa, and over there in Norfolk, Nebraska.
Great market. Like you said, it just gets overlooked, I think, which is part of the reason that we’re there. It gets overlooked by some of the big hedge funds and the private equity groups that just have a lower cost of capital and the return metrics there.
Sumeet: I can’t say I blame you. If you had the opportunity to be in Phoenix or you have the opportunity to be in Orlando or something. They’re probably those coastal type markets, et cetera. I think they’re going to flock towards those areas naturally because things look the prettiest there, they’re well developed and all that, so I understand.
Andrew: Like you said, you’re going to pay a premium. Some of these big REITs and otherwise, their return expectations are lower than new guys on the block.
Andrew: Awesome. Sumeet, tell me about what you think is like the perfect mobile home park. What does that look like in your eyes? If you can just drop one out of the sky, the perfect mobile home park, what does it look like for you?
Sumeet: Some people go around and they try to find the nicest home in the neighborhood. They look at that with awe and luster. I look at mobile home parks in the same way. If I see this beautiful mobile home park, that’s where I find my awe and luster.
I’ve seen a few. They’re out there. There’s no doubt. We feel like we own one of them, I’d say pretty good, which is our first park. We think that’s kind of a really great situation. The first park we bought was only 46 pads or 46 slots.
The ideal one would be a 200-something pad park and there are some beautiful ones I’ve seen in the Midwest as well. All kinds of tenant-owned homes, beautiful spacing, great density, great yard landscaping, beautiful entrance, just sidewalks. I can go on and on. Andrew. It’s not like when you’re tired of hearing of it, but just kind of has this neighborhood look.
It’s still a neighborhood that’s a mobile home park. I think that to me has always been what I’ve always envied when I’ve driven around certain parks around the country and just seeing them face to face. There are those just parks that look like any neighborhood. Subdivisions and well-organized, well thought-out, well laid out, great density, good parts of town, next to a bunch of retail that people can access. That’s my high-level way of looking at a great mobile home park.
Andrew: I agree with a lot of that. Tell me about your current portfolio. Where are your six parks? How big are they? What kind of utility setup do they have? We’d love to hear about your opinion on park-owned homes versus tenant-owned homes if you wouldn’t mind.
Sumeet: Sure. We have six parks. Two in South Dakota, two in Omaha Metro, and then two in South Carolina. That’s our portfolio. We basically focus on sub 100-pad parts. Not that we wouldn’t love to have a 100-plus pad park. We absolutely would take that if we could, but we found that we were most competitive in that sub 100-pad count just starting out. Our parks range from that 40-pad size to 68 is our biggest one. We’re all on public utilities with the exception of two parks which are on public water but have septics.
Andrew: Very cool. Where you’re at in South Dakota? I love that market.
Sumeet: We’re in Sioux Falls, in Rapid City. So two of the larger cities in South Dakota.
Andrew: Wow. That is awesome. Yeah, those are great markets. Very cool.
Sumeet: We’ve been fortunate.
Andrew: Tell me about park-owned homes versus tenant-owned homes.
Sumeet: Park-owned homes, I think, are our business plan. We don’t really have the infrastructure to support a ton of park-owned homes. So we definitely prefer tenant-owned homes. We think people take a little bit more pride in ownership, there’s less turnover. They want to make their place typically look beautiful and more appealing.
We definitely favor tenants owning their own home. We support that. We have our park in South Carolina, which we bought with park-owned homes. We’ve tried to convert that into tenant-owned homes. That’s a process we’re doing right now, actually. Again, it’s just so we could have long-term tenants. The turnover is quite a lot with park-owned homes.
Andrew: Yeah, definitely. But if you find a good market and you turnover at a good rate, that’s a huge win. You don’t have to infill that many homes.
Andrew: Speaking of infill, maybe you can tell me about your biggest infill project that you guys have executed. Have you guys done any of that?
Sumeet: All the parks we’ve bought have been fairly stabilized with the exception of our South Dakota parks. It’s not because there’s not a demand for that kind of housing in South Dakota. It’s just that when we bought the parks, they were basically half full, or less than half, or less than fully stabilized.
Our park in Sioux Falls, when we bought the park, it’s about 55 pads. We bought it, it had 38 occupied. Immediately, we thought we need to infill this park as best we can. We called all the major suppliers for mobile homes and found that the waiting time, as you know Andrew, is quite long. They were telling us about a year out.
So we thought, we’ll order two homes with the anticipation they’ll be here in a year. In the meantime, let’s just hope that we can fill them with used homes or maybe some organic move-ins. We’ve had six organic move-ins in the first three months we bought the park. Just really fortunate in that way. We didn’t have to pay a dime, honestly, for any of the movements.
Andrew: Six in three months?
Sumeet: In three months, yeah.
Andrew: You’re going to have to give me the secrets. I added some type of record right there.
Sumeet: It might be. I don’t know. What was happening around us in Sioux Falls was that there were a lot of other parks that were closing. They were being redeveloped for other uses. So we actually had a bunch of people reach out to us because the Sioux Falls market is really strong and a lot of parks don’t have vacancies. We actually had vacant pads and people were willing to move themselves into our park.
That has worked out well for us. We still have those two homes we ordered. They’re still waiting to show up and they’ll show up next year probably. That’s been our biggest infill project need so far. Like I said, we’ve been pretty fortunate that we’ve had people want to move in on their own.
Andrew: We own a park over in Vermillion and we had some organic movements as well. I think we had three, which we were really excited about but not six. I have to ask, would you be interested in selling that park in Sioux Falls?
Sumeet: Yeah, we’ve talked about it. Anything is up for sale, although our game plan is to keep things long-term. We definitely have an open mind to offers as they come and we take them all seriously.
Andrew: Okay, I get first dibs.
Sumeet: Sure, you can. Absolutely.
Andrew: I love the Sioux Falls market. I went to Augustana University there. It’s a small private school and Lutheran school. Just a great market. It’s growing so tremendously. I go up there a couple times a year. I have a lot of friends from college that still live there. They just got a huge Amazon distribution center built in Sioux Falls. I love that market. You probably know Mike Orr.
Sumeet: Yes, I sure do.
Andrew: He’s a broker. He’s a good guy. Let me ask you this, Sumeet. Where do you see the economy going? How do you see mobile home parks faring? There’s a lot of inflation happening right now. There’s talks of the dollar and it not being the reserve currency. What do you see happening over the next 1–5 years? How do you see mobile home parks faring through that?
Sumeet: We don’t know the future, of course. I think so much of our business relates to interest rates. I don’t really know what the future of interest rates will hold. I’ve heard a lot of speculation that they will stay relatively stable for the next year or two, but then after that, what they’ll look like in five years, I have no idea.
What we’ve always tried to do is get into long-term fixed debt–type vehicles for all our parks. That way, we can ride the inflationary wave or the wave that may come up and down with interest rates over time. I’m sure a lot of people are doing the same thing. But we’re happy to be in the mobile home park space, frankly. We’re in the apartment space too in our other business.
I like mobile home parks better, frankly, comparatively, because I see day to day what the need is for affordable housing. It’s really hard to beat some of the pricing that we’re seeing for people to live in a mobile home park. Most of these people own their own homes, as you know. Really, to pay $300–$400 or whatever your market may be for a month to live is really affordable for a lot of people.
We feel like if everything goes crazy, we’re happy to be in the mobile home park business because we feel like we’re providing a service, and it’s a very affordable service for people. Really, there may not be other options for a lot of folks. So happy to be in the mobile home park business, like I said, and we will continue to try to be in that.
Andrew: Agreed. What do you think is the worst case scenario for mobile home parks? A lot of investors asked me, hey, what’s the worst case scenario where I would lose all of my investment? They asked about if a tornado comes through or something. What do you think the worst case scenario is?
Sumeet: I get that question all the time. What happens if a tornado comes through the park? Frankly, thankfully, we don’t have personal experience with that. But based on our mentor, he’s had one where a park was totally destroyed. I think it actually worked out decently well for him because agencies stepped in and provided support to those who had lost their homes.
There is insurance out there for loss of income to the park owner for a period of time, which we know we carry. Something that we try to keep in mind at all times is, what is the worst case scenario? I think next to a tornado destroying the home, one of the things that keeps me up at night is, what if I have to replace the whole infrastructure of the park? So redoing all the water and sewer, because a lot of times we get into these parks, and they’ve been mom and pop for 50 years, and nobody’s really paying attention to leaks or maybe they didn’t have the technology that we have now to find leaks.
One of the things we do at all our parks is we immediately sub meter all the homes. That’s not only to keep people more responsible with their water usage and more, but it also provides evidence of leaks in the park, which you necessarily are in the home. So you wouldn’t necessarily know that unless you added a meter to the home, frankly. People would be shocked at how much water is wasted with a running toilet.
I had no idea. I’ve probably had running toilets in places I’ve lived my whole life and did not give it much consideration, but when you actually see the numbers and the amount of money that is wasted on a running toilet, it will blow your mind.
Andrew: Yeah, and you can fix it with what? Is it $3 for a new flapper?
Sumeet: Exactly. It’s something that if people are not paying their own water bill, would just go on, and on, and on. You’d be shocked how many people would just let a running toilet go, or running faucet, or whatever. I’ve seen running toilets being the most disastrous to our bottom line.
For $4, my person going in, you spent $50 to send a guy in and he fixes it for a $4 part, the amount of money you’re saving on that is astronomical. Something that keeps me up at night probably is replacing the whole infrastructure of the park.
Andrew: Do you guys use Metron Farnier for the submeter?
Sumeet: We do.
Andrew: Nice, yeah. We just purchased a park that had submeters on it and we just re-updated, removed all those old meters and put Metron on there. Because of that radio read, you know instantly if someone’s leaking. In the northern states where it gets cold, that could amount to thousands of dollars if you don’t catch it.
Andrew: Worth every penny.
Sumeet: Yeah. Freezing lines are probably the other thing that I have to hear about from time to time with people. Things are like that. Probably the catastrophic thing would be a park that’s hit by a tornado. Outside of that is more of an infrastructure problem, or road problem, or sewer backup, or something like that.
Andrew: Stuff you try to catch up front in due diligence, so you can budget for and account for.
Andrew: Wow. You’ve added a ton of value, Sumeet. Thank you so much for coming on. If our listeners would like to get a hold of you, what’s the best way for them to do so?
Sumeet: I always give my cellphone number out. I know it’s not that normal, but I have found by giving my cell phone number to listeners on podcasts that they’ve actually contacted me and it’s been a great way for me to really provide mentorship for people.
I do that willingly and I don’t charge anything. People can call me. I’ve got a couple now that have called me and we continue to keep in conversation. Really there’s no ulterior motive to it for me. I’m just trying to help young people or people who are new in the business. As a doctor, I’ve had residents and medical students my whole life that I’ve trained or have been under me. I want to keep that going in this world that I’m in now, which is in the real estate world.
People can reach me directly on my cell phone, 402-850-1315. They can get a hold of me on our website, easylivingcommunities.com. My email is email@example.com. Any of those is perfectly fine to get a hold of me and happy to help anyone I can.
Andrew: Awesome. That’s great and I’ll make sure to put those in the show notes. Thank you so much, Sumeet, for coming on the show.
Sumeet: You’re welcome. Thank you for having me, Andrew, and getting this time together.
Andrew: Definitely. That’s it for today, folks. Thank you all so much for tuning in.