Interview with the MHP Expert: Glenn Esterson

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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 Glenn Esterson, one of the leading brokers in the mobile home park industry.

Glenn has over 20 years of experience as a real estate broker and in this episode he gives us his advice for limited partner investors getting started in the mobile home park space. Glenn and Andrew also discuss the current state of the mobile home industry given the recent woes in the economy with inflation and all. Glenn is the author of the Mobile Home Park Manifesto and is currently a Marcus and Millichap commercial real estate broker with a speciality in manufactured housing.

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 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.

Talking Points:

00:21 – Welcome to the Passive Mobile Home Park Investing Podcast

01:25 – Glenn’s story and journey into manufactured housing

10:00 – Putting your improvements up front

12:15 – The toughest hurdle for most operators in the mobile home park business

15:14 – What operators overlook and not account for in their pro formas

17:30 – Things that get overlooked in underwriting

19:41 – Common expense ratios

22:00 – Important things passive investors need to look out for when investing in mobile home parks

26:00 – Glenn’s perfect mobile home park

28:17 – The future of mobile home parks

33:40 – The current state of the mobile home park industry

39:34 – Getting a hold of Glenn

40:23 – Glenn’s top tip

41:30 – Conclusion


Links & Mentions from This Episode:

The Mobile Home Park Manifesto: Ethical And Profitable Investing In Non-Institutional Grade Land Lease Communities, by Glenn Esterson

The MHP Expert Website:

Glenn’s Cell Number: 423-483-0492

Keel Team’s Official Website:

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. Glenn Esterson, the MHP expert. 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. Glenn is passionate about the mobile home park space. He has been a commercial real estate broker since 2001 and bought his first manufactured home community in 2004. He has sold hundreds of mobile home parks nationwide and continues to be one of the industry’s most active brokers. He is also the author of the Mobile Home Park Manifesto, a book on ethical and profitable investing in non-institutional grade land lease communities. Glenn, welcome to the show.

Glenn: Thank you, Andrew. Glad to be here.

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

Glenn: Sure. Right now we’re nearing our 1000 park that we’ve sold. That’s a lot. I think we’ve done 86 parks this year so far. Yeah, it’s a lot. A lot of them are portfolios and stuff like that. I got into this world very reluctantly because no one else would have me 20 years ago. I wanted to do like everybody else—sell apartments and stuff like that. I was down on my luck way back when. My dad’s friend showed me how he was operating some apartment buildings and class F crap down in Miami that was not the prettiest stuff, but I loved it. This guy was so cool. He was making money and showing me how he’s helping these tenants get a solid foundation in life. His rents were the cheapest in Miami and all that kind of stuff, and I really dug it. After years of working with him just loosely, he said, go get your license and let’s start making some money. So I went and got my license, started renting apartments for him, and got a month’s rent every time I rented a unit for him. I was renting two or three units a day. At 25 years old, before I knew it, I was making some decent money. I just had a baby and stuff like that. It was meaningful, very meaningful to me. After a little while with him, he said, why don’t you sell this building? Why don’t you sell this building? It took me like five seconds to sell these buildings. I went through the learning curve. I said, oh, this is pretty awesome. A few years after doing that, I had some money in my pocket, finally. I said I’m out of here, I’m retiring, and I hung my hat up. I had not much money. It was just something, very little money, big money to me at the time. I went and bought a farm, which was my passion for most of my life is being a farmer. I bought a farm in North Carolina and full-throttled it there trying to make a living being a farmer. After about a decade, I realized my best year was like $25,000, $30,000. It wasn’t doing me so well. Luckily, the one thing that kept me surviving was I took that money I made in Miami and I bought a small little park in eastern Tennessee about 30, 40 minutes from my farm. It was just a small park—35, 40 units. It was all park-owned homes and it was a good old-fashioned bottom-level type of stuff there. I had hookers, meth heads, and all sorts of everything you don’t want in your park. Nobody told me nothing about this stuff back then. There was not a single resource out there back then, at least that I could find. I didn’t even have internet yet on my farm. It was all a learning curve for me. I just jumped in, got my butt kicked in for a couple of years. A lot of rough times, a lot of crazy stories. There’s a TV show out for a while that kind of emphasized the worst of parks, but my park was worse than that. Police officers are there, daily fights in the courtyards, and things like that. So I said, enough is enough. How do I turn this thing? I found this really cool guy. His name is also Glenn. He’s about 85 years old and he just happened to have been the only old-timer out there that knew how to turn the park. He said, oh, you got to sell off the homes or give away the homes. You got to do X, Y, and Z; and I said, you’re crazy. I’m not doing that. Finally during 2009–2010, I said, okay, I can’t have it anymore. I got to do something about it. I called the guy back up. He came and helped me. Within a year, I had the whole part turned and I said, oh, this makes sense now. A few years later, I sold it. During that 2013 era, I said, I think I got something here. I think I’m going to broker these deals, move off the farm, move to Atlanta, and got lucky with Marcus & Millichap. They were willing to hire me and give me a shot because I told him a good story, I guess. Finally, for the first time in my life, I started feeling like, oh, wow, I’m a grown-up now. I’m doing a big boy job and I’m making some real money. It took a couple of years to get some ground, but here we are today. It was a story of reluctance getting into it, but now I just love this stuff. I speak all over the place about this industry. I’ve helped thousands of people and my book sold thousands and thousands of copies. It’s all about the little guy. The institutions know what they’re doing. We’re not trying to help the institutions any more than necessary right now. I’m trying to help guys that are first coming into this business who don’t have a solid ground but have a couple of bucks and want to make a difference in life for themselves. Without jamming rent growth down, the 85-year-old ladies kind of budget because that’s just not going to work. We really emphasize how to increase profits without hurting your poor tenants because we’ve seen a lot of rent growth in the last five years. Some of it is totally reasonable and some of it is almost a little unfair. The way that me and my team emphasize upside, it’s all about filling your vacant homes first, filling your vacant lots, and then going for the expansion. Keep your legacy tenants pretty flat, maybe you grow at 3%. Your new tenants, you can go and get full market rent on, and yet your upside takes a little bit longer, but it’s a more stable amount of income if you’re generating that way without hurting the feelings, ending up in the press, and all that kind of stuff when you go for that $200 rent increase upon close because you overstated the expectations with your investors who are giving you your money to buy the deal about hitting a 10% return. I don’t like that. I was the poorest guy on the block forever. I remember what a $50 rent felt like to me. It was murderous almost for me back in the day. The times ain’t any easier for people today. If you’re poor, it’s really, really hard out there. There’s something that you have to be cognizant of about that. If you’re dealing with the highfalutin park, then fine. But most people listening to me speak are usually starting at the bottom and working their way up, and the people in their parks are even on a lower level. Your tenants are your most important possession at the park. Without them, you don’t make money, so you better take care of them. That’s how I emphasize what I do and I think part of the reason why I’ve been so successful in this industry.

Andrew: That’s awesome, Glenn. Yeah, that’s a great perspective coming at it from that angle because there’s a ton of value add to be had with those vacant lots. Literally, you drive through mobile home parks nowadays and it’s very common that a lot of these mom-and-pops are just leaving meat on the bone. They’re just leaving these vacant lots. It’s a little more elbow grease to go in there and fill those lots, but the value is there.

Glenn: One lot is going to rent for $400. One rent bump, even if you’re an aggressive rent pusher, what are you going to get, $50? And yet, you’re going to get it across however many people, but that’s eight people to pay one lot. So if you rent one lot at $400, you don’t have to raise rents on eight people for that $50. It’s a more sticky income. That’s really what you want to do. It is a little scarier, it is a little harder, it is a little longer, but it’s a better process in the end. As long as you’re vetting your tenants well your legacy tenants are going to feel good about the new tenants coming in. They’re going to see you stamp where you’re trying to go with everybody, and maybe it takes 10 years to get that legacy tenant up to market rent, but that’s okay. As long as you set expectations with your investors and you’re not a pump and dump type of operator, that to me is the more sustainable way to grow this industry and for us to alleviate some of the regulations that we just see coming down the pipeline that might get forced down our throats if we’re keeping abreast of […] have in the last few years.

Andrew: Yeah, definitely. I think rent increases definitely hold their place also. I think a lot of these parks have not had rent increased in 10+ years, so I think there’s a time and a place for everything. But yeah, making those improvements to make the property better is key.

Glenn: Put your improvements in upfront. Put them in upfront. Raise your money upfront for the roads, for the landscape, for the septics that need to get repaired. Put that in upfront. Let your tenants see that you’re putting in real money and then go hit them up for a 3% or 5% rent increase on your legacies. Again, feel free to get full rental market value out of your new tenants that are coming in. If the market is $600 and your tenants are only at $300, feel free to get $600 on your new tenants. But the grandma in number two who’s on Medicare, getting the small check, and all that kind of stuff every month, she can’t handle a $200 rent increase. She can’t handle that $200 rent increase even if you break it up over four years. So you have to be cognizant of that, at least in my world. I’m kind of a bleeding heart, so I might look at things a little differently. But to me, there’s a way for everybody to accomplish their financial goals without it just being stuffing it down the poor guy’s throat. I know you’ll agree to disagree with me, but that’s okay. We all have our own philosophies about this, but for me, that’s how I feel better. When I bought my park, my rent was $75. No […].

Andrew: Wow, at $75 a month. Wow.

Glenn: And my homes we’re renting for $250. I’m not just talking out of my butt. I’m being serious about this. By the time I sold my park 15 years later, my rents were measly $200. I’m very cognizant of pushing rents because I know you can still be profitable. Do the infill, do the upsides in a more productive way. Spend your money upfront. Let the tenants know what you’re doing. Be transparent with them. Be like, hey, look, I’m going to be taking my rents up here over X amount of years depending on your ability to be a good tenant and getting this park where it needs to be. I’m putting in all this money. This is what I’m doing. Here are all the competitors around me and here’s what they’re currently charging. You’re not going to necessarily get a better deal by going over there because they’re going to get you for new rent as well as a new tenant, so let’s work together and come up with a plan. If you live up to your word, I’ll live up to my word. That seemed to resonate with my tenants once I got my park turned.

Andrew: Yeah, for sure. Tell me, Glenn, what do you think is the toughest hurdle for most operators in the mobile home park business?

Glenn: The investor expectations. They get glued to this idea of other people’s money. It’s almost like a drug to them. They set expectations, probably, too ambitiously with these investors. They say, oh, we’re going to hit a 20%, five-year IRR or whatever number they’re trying to hit. But the only way to really do that is by jamming rent growth. I think that becomes an obstacle. Whereas if you had set different expectations with your investor base, you probably could have taken a little bit longer time to do it and probably done it without planning in the newspapers about John Doe’s raising rents to his park by 200% without improvements. That’s the worst press. You really don’t want it. It ends up on the TV sometimes and things like that. To me, that’s one of the biggest hurdles, but that’s capitalism. It’s okay. But the next one I really think is around tenant vetting, who you’re letting move into your park. One bad tenant, it could be like a crack epidemic. You could have all perfectly good people in your park and then you get one bad tenant in and before you know it, they’re all on drugs, they’re all doing bad stuff, and they’re revolting. I’ve lived through it. I know how it is. You see that big wad of cash and somebody saying, man, I can really use some extra cash right now. I need this. Especially as a mom-and-pop, I need this revenue. You make a poor judgment about a tenant and it ruins your tenant base. Then you spend the next 3, 6, 12 months getting this guy out of your park and then cleaning up all of the damage that he or she caused at the park. On that though, we got pretty clear about how important tenant vetting is. Especially in small towns, I’ve seen people get evicted and just shuffled through all the parks. Like go, hey, this guy, he was here, now he’s here, now he’s there, and now he’s going there. One of my friends, a guy named Tom, had an idea. He was an eviction attorney. He’s like, I think there’s a solution here to this thing. He convinced me to invest with him. Now we have a great product out there called Rent Butter. It’s one of the best tenant verification systems out there and it’s moving along nicely. Tenant vetting, I think, is an extremely critical part of your operational standpoints. Over promising your investors, really, you’re starting off on the wrong foot when you do that. Those two things together, if you solve that issue, in my opinion, the rest of your operational stands will usually go pretty well. Obviously getting the right employees, putting the right people in the right seat on the right bus to help drive your machine is critically important. A good operator usually has pretty intelligent people around them to put the right managers in the right spots and the right regional managers controlling the right divisions and things like that.

Andrew: Awesome. Tell us, as a broker, what things have you seen operators overlook and not account for in their pro formas?

Glenn: There are some really good brokers out there. Some are my competition, they do a bang-up job, they really do. We’re meticulous. Our thing on underwriting is world-class underwriting. We want to make sure it’s bulletproof. We tie everything back as much as we can, but sometimes mom-and-pops don’t have bank statements and stuff like that, or if they do, it’s commingled. Then you have brokers that just make guesses and the logic isn’t there. They tried to underwrite it to, hey, look, it’s a seven cap, but not really telling you it’s a 20% expense ratio. Things like that I think is really a lack of experience for a lot of the brokers that don’t underwrite correctly. Whereas us, we are consistently one of the lowest cap rate brokers out there. We get told all the time, we’re […] cap. We just sold a parking PA, a fully stable parking PA for 3.3 cap, but that’s really what it comes out to on that deal. Whereas some other brokers could have fudged it to make it look like a five cap. The buyers are smart nowadays. They’re going to dig in and they’re going to argue with you about your pricing, logic, and method with your underwriting. We do a lot of deals on four cap. We disclosed one in Wisconsin. It was like a 3.6 cap, also on a stabilized deal. That number, to most people, sounds insane. But when you hear the story and you understand why today it’s a 3.6 cap and why tomorrow it will be a 6 cap, then you can start seeing how the motions play out. But without having a defendable story and without having a real understanding of all the pulleys and levers that are in that deal to make this work and that work, and a lot of that has to do with debt. If I’m a new broker, I’m trying to target something that’s attractive for a buyer to call me just so I can get somebody on the hook, and then set a retreat later on or something like that. We set expectations pretty strongly with our sellers. We always price—not always, but 95% of the time—our deals and we set the expectation.

Andrew: Let me ask you this, Glenn. Let me ask you this. What would be something that maybe gets overlooked in the underwriting?

Glenn: CapEx all the time. CapEx is always overlooked.

Andrew: Just like general park improvements, that kind of stuff.

Glenn: Yeah. Park improvements, deferred maintenance, landscape, and stuff like that. It’s always pretending like oh, no, it’s fine. Your roads are great. You never need to worry about […]. Your trees are fine. You don’t need to deal with them. That’s always something we see people not accounted for in their pricing. The debt equation is a huge factor. Most of the time, the brokers are just, oh, we’re just going to throw a number out there without getting a true debt quote on this deal. That’s going to totally manipulate your numbers by not having a proper debt quote that’s achievable because the debt is the basis of your return. It’s pretty straightforward.

Andrew: Yeah, definitely.

Glenn: We go through all those processes to make sure. Management’s often one, oh, well, this guy’s managing himself, so we don’t need a management fee thrown in here. Yeah, but that’s why you’re at a 15% expense ratio and things like that. We normalize a mom-and-pop’s P&L because their P&L might show taxes, insurance, and R&M. Maybe there are utilities there, but oftentimes, well and septic, they just pretend like that’s not an expense that exists. A lot of brokers do that too. We normalize all that and add an expense in where it’s missing. If the insurance is wicked low, we’ll take it up to where it needs to be. If taxes we know are going to reset, we take them up. We call the municipalities, we figure out all that kind of stuff. A lot of brokers don’t do that. My old mentor, a guy named Mike Fasano, used to call that the lazy brokerage. They just don’t sit there and think through how the buyer is actually going to operate. He drove that into me when I was younger. If you have impeccable underwriting, you’ll do a lot of deals.

Andrew: For sure. Let me ask you this though real quick. What would you say—because I’m going to circle back. You said expense ratios a couple of times. What are some common expense ratios that you’re seeing and you’re underwriting deals at?

Glenn: When you remove water and sewer out of the equation because water and sewer, they’re going to be direct build, they’re going to be build back, they’re going to be included, or it’s just going to be a private utility system. You have to understand how these things play. But typically, when you remove water and sewer revenue and expense out of the equation, by the time you’ve fully stabilized the park and got it up to full market rents and full market occupancy, I like to see that expense ratio somewhere around 30% to 35%, maybe depending on what market you’re in. New York, it’s going to be higher because your taxes are […], same in California. But in most markets, that 30/40 rule is going to apply. That’s the mythology that’s been taught for years. It’s actually true, and you want to really pay attention to that. Your day one stuff, it might not necessarily be reasonable. Yesterday we underwrote a deal—68% expense ratio. It is what it is. That’s a real number for this guy. But by the time you get the rents where they need to be, you fix the occupancy, and you fix the efficiencies, that pro forma with the water and sewer removed out should land around 30%. Guess what, it does land at 32% on that deal. That’s kind of what we’re looking for. I have personally never taken a park out below a 30% expense ratio because it’s never closed ever. For me, we just don’t do it. We’re doing a deal right now in Georgia, a really nice deal, sold a few times. This guy’s operating truly professionally from California at a 22% expense ratio. I know for a fact that that’s a real number for this guy. I know the next guy’s going to operate around there too, but guess what, I’m kind of handcuffed to my 30% rule. We have to do that there. Now I’ll take the cap rate down very low to offset that, but we’ll have a discussion with the buyers about why it’s this way, how it’s working, and things like that.

Andrew: Okay. Glenn, as the MHP Expert—we’re talking LPS here—what are the most important things passive investors need to look out for when investing in mobile home parks?

Glenn: That’s a good question. I love the LP side. I think it’s the smartest side. I live off this rule I made up called time value […]. There is just nothing better than being an LP, in my opinion. You get all the passive appreciation. You get to sit here and yell at your GPs about them not performing. You don’t have to do any of the lift. You just have to sit there and cough up some money, some $20,000, $100,000, $250,000, or whatever it might be to be in that seat. But you get no headache out of that. You might lose your money if you pick the wrong operator. To me, that’s a smart, smart, smart investment. I’m an LP in a bazillion things, not an MH, but in plenty of other businesses because it allows me to get the income without having to do the work, essentially. I go out and spend my time doing the work that I do. What I look as an LP in my operator is do I get along with you? Are you returning my calls? Are you sending me reports? Are you really being transparent with me or you’re just feeding me the fluff? Because I don’t want the hopeful dreamer stuff. I want the real deal. You’re pitching this is going to be a 5X, but is it really going to be a 5X or is it going to be more like 1.5X when it’s all said and done? I want to know what I’m getting into. If I was an MH investor, I would be very, very cautious about who I’m giving my money to. There are a lot of new groups coming in promising some big stuff and they haven’t been through a down cycle yet. We’re pretty frothy out there right now. We started off the conversation, they’re setting expectations with their investors that are pretty high. I would be cautious of that. I’d be looking at some of the groups that have been around for a hot minute that has a pretty large portfolio that seems to be on the right track. But I’d be okay with just getting a 15% return on the deal and getting a six pref or something like that, which I know sounds low to some people. But for guys like me, if I trust you, if I like you, and you have a performance track record, I’m totally fine with the 6% return on my money and maybe a 15% backend. To me, that’s time value-adding right there. Now if it’s a new guy and he’s like, oh, I’m going to give you 20% and I’m going to give you a 9% pref, I’m going to sit there and scratch my head a little bit. With a nice kid, but I think I’m taking on too much risk here. I’d be bouncing back and forth through there. Some of these operators out there that I know that I talk to every day, they’re amazing, great operators. Oddly, those are the guys that typically don’t need to raise too much money. The money is just always coming to them. Some of them pay decently, obviously, but most of them are going to be in that lower range that I was telling you about. But you can probably rest easier at night knowing that your money’s in good hands. There are a couple of groups that are brand new. Right now they’re on fire for doing great. Wow, impressive stuff. You’re going to make some real money. But again, I’m cautious because they haven’t been through a down cycle. They haven’t hit a real hurdle. They haven’t sat there and say, uh oh, all the septics are bad; uh oh, the lagoon that we just bought, there’s no way to convert it over to the city. They haven’t handled a really hard issue yet. As an investor, I want to see my GPs handle a hard issue and overcome it. My trust value in them was an eight, now it’s all of a sudden a 9 or a 10 because they were able to overcome that objection. That’s kind of neat. I wouldn’t say it’s for everybody, but for me, like 5%, 6%, 7% returns, those scare me. To me, that seems like safe money.

Andrew: Yeah. I think that’s some great advice for the listeners. Glenn, tell us, what does the perfect mobile home park look like in your eyes and why?

Glenn: The one I just sold. That one up in PA was a beautiful deal. It’s called ShadowStone Village. It’s in Harrisburg, Pennsylvania. One hundred and eighty-eight spaces, all retirement, all doublewide, all direct build utilities, beautiful homes, beautiful streets, zero pain on that deal. The rents will grow over time slowly. If I’m a 20-year investor, I’m making a pile of money on that deal by the time I’m ready to exit again. I’m having the easiest time imaginable because it’s really a cash flow mailbox money type of thing at that point. Yes, I’m coming into it at 3.3 cap—not the greatest. Still better than my AmEx high yield savings. That, to me, is fine, especially if I’m investing out of my […] account and putting my money into a deal like that that’s now growing tax-free. My return’s coming in. In 10, 15, 20 years, I have a beautiful, beautiful park. That park sold for $18.5 million-plus or minus and $100,000 a lot. If that’s what it is today, I can’t even imagine what that’s going to be in 5, 10, 15, 20 years I’m going to look like a genius then because I beat out the market today that seemed like I was a little crazy to do so. But I never have headaches and I never have pain points. This thing grows and is reliable. To me, that’s how I would invest. These value add things that I’ve seen you’re doing, you’ve done very successfully with them, I just don’t have the stomach for it. I went through that before. For me, it was all a kick in the nuts. When I got to the finish line, my paycheck was a little softer than I wished it was. The older I get, the more I have to spend my time in a bazillion situations. I just want no headache and some return. I’m not going for home runs in year one, two, or three ever anymore. If I am, I’m putting it into a different world where my expectations were set. You might lose all your money today, but maybe you’re on some massive thing that’s going to do a 10X or something like that. That’s where I’m at with that kind of stuff.

Andrew: Yeah. That makes a lot of sense. Maybe we can talk about the future a little bit. What do you think the future of mobile home parks looks like? Where do you see the economy going with the inflation we’re experiencing currently?

Glenn: Sure. Cash flow in real estate is the best hedge against inflation. From that standpoint, mobile home parks are really well situated. As we saw during the Great Recession, as we saw during the COVID mishap, and as what we’re now peering into this high inflation kind of environment, mobile homes are still the best situated to not be too affected. We have the lowest cost basis for living anywhere. If everyone always needs a place to live where that bottom-rung, it doesn’t get cheaper than this. Things will cycle down to us and improve our tenant base, actually, if we go through our things like what we saw in the Great Recession and what we’ve been seeing during the COVID pandemic. There’s so much delta between a lot rent and a two-bedroom apartment rent. There used to be more delta. Now there’s about a 50% delta. There’s still a lot of room to go up. Even if it goes up to 70%, which is a massive amount of rent growth for you as an operator, you’re still the cheapest place to live. Now that homes are able to be financed much easier than ever before and they’re not these atrocious interest rates like they were a few years ago, I think we’re well-positioned to still be the best investment vehicle in real estate for any of the major verticals moving forward. Even if we hit some really tough times, which we very well might. There’s a lot of people out there saying, hey, these last couple of issues we had, those were just precursors to a bigger reset that’s coming. I’m not saying I buy into it, but this is some of the stuff that’s out there. Even in those events, I think MH will be very resilient. The fundamental basis that, 20 years ago I learned in Miami that my dad’s friend taught me was you will always need a place to live. It will remain true forever and ever. If you’re buying well-located real estate, location, location, location still remains the number one rule of real estate. If you get too far out, and you take a low-quality deal, and you didn’t vet your tenants, yeah, you’re going to have problems. You’re going to have problems. Especially if you overpaid on that thing, you have too much debt, and all that kind of stuff. Keep yourself fairly low leveraged, you keep yourself in a secondary or primary city, and you keep yourself positioned well with your tenant vetting, I don’t see why—even in the worst of economies—you’re still not making more money than the next guy on your investment.

Andrew: Yeah. I think the best argument I heard recently from an economist called John Mauldin, he said that COVID…

Glenn: I love Mauldin. I read all of his stuff. He’s great.

Andrew: He’s wonderful. He had an interesting email that he sent out where he said that COVID expedited this artificial intelligence development and creation, and who’s going to get hurt the most? What jobs are going to be done away with in the beginning when we onboard AI into our day-to-day lives? It’s going to be the service jobs. I think we’re already seeing that. You go to McDonald’s, you try to order a burger, you’re doing it on a self-help kiosk. Same thing at Walmart and the same thing at other places.

Glenn: Robotics and AI are going to change the future for us. For better or worse, you’re going to have to learn how to accommodate that. If you’re a $60,000 employee doing some service industry that really can be replicated by a robot, I would be cautious about—

Andrew: But isn’t that the tenant base? Isn’t that the mobile home park tenant base just playing devil’s advocate?

Glenn: Yes and no. Most of the mobile home park tenants, they’re on a lower wage scale. They’re making $20,000, $30,000, $40,000 a year. Robotics are pretty expensive right now, so they’re more targeting the things that are in that $50,000 to $100,000 employee to replace. The kiosk at Walmart and the fast food server may be a little different story, but you can’t really replace the nurse. Eventually, you will be able to replace the nurse at the hospital, I have a feeling. But for now, that’s probably pretty safe. You’re not going to really be able to replace the teacher. You’re not going to really be able to replace some of these $30,000 jobs—the police officers, the firemen, and things like that. Even if that does get replaced, you still need a place to live, so you’re going to have to figure that part out. That’s where manufacturer housing is still a safety net. I think the robotics industry is going to make a remarkable impact on us over the next ten years. If I was a service worker, I’d be looking at kind of upgrading my education and my skills to find something that is probably in that world tending to those robotics or something that won’t be as affected by robotics. I’m just some dude, so I don’t see the future.

Andrew: Who knows what’s going to happen? But yeah, that’s an interesting perspective. All right, tell us about mobile home parks in the market right now. One of my mentors was telling me how we’re at a 50-year high in terms of pricing. Mobile home parks are selling for top dollar right now. You sold over 230 mobile home parts and 86 this year?

Glenn: The 230 is probably from five years ago. But this year alone, we’ve sold about 50 something transactions and about 86 parks or so.

Andrew: Eighty-six parks this year. That’s amazing.

Glenn: We have another eight or nine parks to close before the end of the year. That’s like another 25 parks or something like that. Our team is only two years old. We had some ramp-up time, but I’m probably around 450 parks plus or minus at this point.

Andrew: Wow. I think I saw the 230 just on a website or something.

Glenn: Yeah. Maybe that’s an old number. I don’t always update all my stuff.

Andrew: That’s amazing. But tell me this, Glenn, what are buyers looking for right now when they’re looking for mobile home parks, and what cap rates are most operators exiting at?

Glenn: Still all over the place? Cap rates to me, I know everybody loves to talk about cap rates. I don’t like to brag to you about cap rates when I do a low cap rate deal stuff, but they’re not very relevant in my opinion. What’s more relevant is your cash on cash. What’s more relevant is your ability to implement a business plan to achieve your pro forma. What we’re seeing on stable deals is typically somewhere around a fully stable deal in a fully nice market with no real upside left. Most of the time, if it’s not a trophy asset, it’s going to be somewhere in that, call it, 4.5–6 cap type of range depending on the market you’re in. But 4.5, again, it’s a little egregious on a fully stabilized deal. So you got to have some other primers there that make it worth it. You have to have a buyer that’s got some needs, that black swan type of model type of thing. The average buyer, still—just like they were before—is looking for 20%, 25% returns. That’s just a piece of your debt. You figure out what your debt is, you add some spread on there, and then you engineer it to that number. I would say, if it’s a community bank type of deal, we’re probably looking at 7% to 8% cap rates. If it’s a Fannie Mae type of deal, we’re probably looking at six caps plus or minus on more stabilized stuff. But when you add value add in, the cap rate just goes out the door. They just go out the door. We just pitched a deal yesterday. It’s a one and a half cap on a value add, but you’re going to take it to a 22 cap. Is it really relevant that it’s a one-and-a-half cap? No, it’s not. Good market, achievable upside, that’s much more relevant. The GRM seems to be a very interesting metric that has moved substantially over the last many years. For instance, that ShadowStone deal that we just did was 19.95 GRM. Hands down the highest GRM I’ve ever sold. Whereas most of our GRMs historically have been in that five to eight type of model. Over the last couple of years they crept up. They’re more or less around 10 or 12 right now on most deals that we sell. But the higher quality deals or lower occupancy deals that we value add, that’s really escalating the GRM. That’s an interesting model to watch climb right now.

Andrew: When you say GRM, just because most listeners might not know what it is.

Glenn: Sorry, Gross Rent Multiplier. The park makes $100,000 in revenue a year—not profit, in revenue. You sold that park for a million dollars, that would be a 10 GRM. The higher the GRM, certainly the lower the cap rate is going to end up being. I buy a lot of businesses and businesses often are evaluated off of the gross revenue because their expenses might be different from my expenses, so we’re looking off of the gross revenue. That seems to have been a metric for my whole 20 years in this business that seems to hold true. You can look at that. Buyers, when they price things, they’re always looking backward or they’re trying to convince the seller and the broker that, hey, nothing in this area sold for that number, and your rents are blah, blah, blah. But as a broker, we’re always looking forward. If I know I got something in my hopper that is an apple to apple type of transaction, for what I’m about to propose and bring out, I’m probably going to relay that math a little bit heavier and then project a few months out because, by the time we close, it can take three to six months to close the deal. By the time we close, the market has already moved. I don’t want my owner to feel like sour grapes because now things are selling for a higher price in this market. As a broker, it’s almost your job to try and manhandle that situation and try to prove that we should be priced off of six months ago, not six months from now. But as a broker, obviously, I can’t afford to do that. I’m a seller’s broker. I’m not a buyer’s broker. I tell every buyer, I’m one of the most expensive brokers in the industry. It is what it is. But when the tables turn and you’re ready to sell, it’s going to be a very good position for you because I’m going to be able to help you get that maximized value.

Andrew: That’s awesome, Glenn. How can our listeners get a hold of you if they’d like to do so?

Glenn: Sure, it’s very easy. You can go to my website. It’s There, you can see our contact info. You can see all my deals, hear some of our stories, and stuff like that. All of our blogs are on there as well. You can always reach out to me directly. My cell phone is 423-483-0492. I pick up the phone every time it rings. If I don’t answer, it means I’m calling you back, usually, by the end of the day, but certainly within 24 hours. My whole team is trained the same way. We don’t let people just hang out wondering if we got the message. If you call us, you’ll get a callback and you’ll get at least 15 minutes of our time.

Andrew: Awesome, Glenn. Thank you so much for coming on the show today. I want to ask one last question. What is one tip that you would give to a passive investor looking to get into mobile home parks?

Glenn: You’re not going to like it.

Andrew: What comes to your mind first?

Glenn: A, are you sure you want to do this? B, use your money. Don’t use somebody else’s money. Use your money in a bank on your first deal. Buy a small, perfect, easy peasy, well-located deal that has no brain damage on it. Just like you go to college before you go to med school before you become a doctor, consider this your education course. Go buy the 10-unit park in the best location you can with the lot rent, the public utilities, and the public roads. That way, you can learn the right way to do it first before you go and take on a bigger deal with other people’s money and have your value add. Because that’s where people screw up, and that’s where things can go really sour. Buy the best-located deal with your money that you can afford.

Andrew: Awesome, Glenn. Thanks again for coming on the show. That’s it for today, folks. Thank you all so much for tuning in.

Glenn: Thank you, Andrew.

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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