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Interview with the Trailer Park King, Jose Garcia

Listen on Apple Podcast here: https://podcasts.apple.com/us/podcast/interview-with-the-trailer-park-king-jose-garcia/id1520681893?i=1000638290318

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 Jose Garcia, famously known as THE TRAILER PARK KING on Instagram, he is the best-selling author of ‘Trailer Park King: How to Become the Next Mobile Home Millionaire.’

Jose is a successful mobile home investor, Lonnie dealer, coach and mentor who started out with single mobile home investments and has since done over 500 profitable mobile home flip transactions within the last 7 years. He currently covers the Southeastern United States and plans on expanding his Trailer Park King mobile home investing business nationwide. 

In today’s episode, Jose Garcia shares with us his wealth of experience gained over his years investing in mobile homes. He talks to Andrew about his thoughts on the current and future state of the Mobile Home Park asset class. Jose also discusses what it’s like to start out as a Lonnie dealer and how it can assist you in your mobile home park investing strategy along with what new investors to the mobile home park asset class should focus on when they first start out on their passive mobile home park investing journey. 

Jose’s goal is to coach everyday individuals step-by-step on how to profit from mobile home park investing, a recession resistant asset, so they too can have financial independence! 

Andrew Keel is the owner of Keel Team, LLC, a Top 100 Owner of Manufactured Housing Communities with over 2,500 lots under management. His team currently manages over 40 manufactured housing communities across more than 10 states. His expertise is in turning around under-managed manufactured housing communities by utilizing proven systems to maximize the occupancy while reducing operating costs. He specializes in bringing in homes to fill vacant lots, implementing utility bill back programs, and improving overall management and operating efficiencies, all of which significantly boost the asset value and net operating income of the communities. Check out KeelTeam.com to learn more. 

Andrew has been featured on some of the Top Podcasts in the manufactured housing space, click here to listen to his most recent interviews:  https://www.keelteam.com/podcast-links. In order to successfully implement his management strategy, Andrew’s team usually moves on location during the first several months of ownership. Find out more about Andrew’s story at AndrewKeel.com.

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 500 total 5-star reviews, 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

01:05 – Jose Garcia’s background

05:58 – Mobile home investing in the real estate space

07:08 – Responsibilities as a mobile home park investor

08:18 – Opportunity in the mobile home park asset class

10:00 – The evolution of Jose Garcia’s branding and marketing

12:18 – Responsibilities as a Mobile Home Park owner versus a Mobile home investor

14:23 – Your first Mobile home park deal

15:44 – Overpaying for mobile homes

17:00 – The tough aspects of older mobile homes

19:20 – Mobile homes as personal property

21:00 – Mobile Home Parks, a recession-resistant assets class

22:50 – Focus on the underground infrastructure first- mobile home park investing

25:17 – Starting out as a Lonnie Dealer – “deals on wheels”

27:03 – Screening tenants for the mobile home community

28:04 – Low cost of entry-high reward

30:00 – Removing mobile home parks

31:00 – Rolling up your sleeves and getting your hands dirty

31:40 – Reaching out to Jose Garcia

32:07 – Conclusion

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

Links & Mentions from This Episode:

Email Jose: j@garciamhu.com

GarciaMHU website: https://garciamobilehomeuniversity.com/ 

Keel Team’s official website: https://www.keelteam.com/  

Andrew Keel’s official website: https://www.andrewkeel.com/  

Andrew Keel LinkedIn: https://www.linkedin.com/in/andrewkeel  

Andrew Keel Facebook page: https://www.facebook.com/PassiveMHPinvestingPodcast 

Andrew Keel Instagram page: https://www.instagram.com/passivemhpinvesting/ 

Twitter: @MHPinvestors


TRANSCRIPT

Andrew: Welcome to the Passive Mobile Home Park Investing podcast. This is your host, Andrew Keel. Today, we have a very special guest with us in Mr. Jose Garcia, famously known on Instagram as the Trailer Park King. He is the best-selling author of How to Become the Next Mobile Home Millionaire.

Before we dive in, I wanted to ask you all a real quick favor. Would you mind please taking an extra 30 seconds to head over to iTunes and rate this podcast with 5 stars? This helps us get more listeners, and it means the absolute world to me. I literally read every one, and I check for new reviews daily because it lights me up. Thanks for making my day with that five-star review of the show. All right, let’s dive in.

Jose is a mobile home investor, coach, and mentor. He started out with single mobile home investments and has since done over 500 profitable transactions within the last 7 years. He currently works in the southeastern United States and is expanding. His goal is to coach everyday individuals step-by-step on how to profit from recession proof asset—mobile homes—so that they too can create financial independence.

I was lucky enough to meet Jose at the SECO Conference this year. We did a joint session on how to leverage Lonnie dealers in your mobile home communities, and the attendees were mostly mobile home park operators and owners. It was a really awesome session.

I started out as a Lonnie dealer. A lot of people don’t know that, but I started out with individual mobile home flips and things like that similar to Jose. We were following the guidance of the initial OG mobile home investor, Lonnie Scruggs, who wrote the book Deals On Wheels. Jose, it’s great to connect with you again. Welcome to the show.

Jose: Absolutely. Thank you for having me, Andrew.

Andrew: Would you mind starting out by telling us a little about your story and what inspired you to get started investing in mobile homes?

Jose: Going on eight years now, I decided to get into what I thought would be real estate. I think I’d watch too much HGTV, Discover TV, or whatever not. I thought I can do flipping houses too. Back then however, 7–8 years ago, I had little funds. I was working as a corporate logistics manager. I had big dreams and desires but little income or cash flow to obviously get into real estate.

Obviously, there are so many ways to get in with little or no money. But again, I’m green, I know nothing. I sit there to watch the TV show and on treat. I spent some time just trying to do browsing, searching, and trying to do the most learning I can. No matter how high up I could get it, it was just not feasible when it came to the money, to the capital in a sense.

In some of those meetups and REAs that are back up and going again, somebody said, do it with mobile homes, it’s easier. He just clicked on me now. I grew up partially in a mobile home, so I knew how to live in one, not rehab one, but I thought, well, that’s got to be the same as the houses.

I just started searching, working up on mobile homes. Where are the most mobile homes? Of course, then immediately communities. Trailer parks, you still consider some at that time. I thought, okay, well then let me start calling communities and see if they have any fixer-uppers.

I’ll make a joke as I like to go back and hear my conversation for the first time. I’m sure it’s horrible. Horrible, but it was a bunch of notes. No, we don’t deal with investors, no kind of thing. Summary in there, one of the community owners finally said, yeah, I think we got one we potentially sell to you. It’s almost like a shock to me. It’s like, really? Somebody actually has one that they’re willing to let me.

The first thing the next morning, I was out there checking it out. Reviewing it to me just seemed like opportunities everywhere. It was ugly, dirty, cat smell, the typical individual mobile home Lonnie deals talks about, but I saw I could do something with it. That one mobile home, I ended up rehabbing myself, because quickly I realized that contractors don’t like the work. They don’t like to show up.

I ended up being. Now, I’m married. I have a logistics job, but I’m thinking I got to get this done. Of course, every ‘what-if’ thought is coming to your head, every reason why it’s not going to work out. Why am I doing this? I got another job, but I pushed through it. I said, let me just get rehabbed, rented, sold. I don’t want to be part of this here.

But we did. I got it done, and I finally listed it. A couple of weeks go by, I ended up renting it. Something about collecting that deposit, that first month seeing people’s joy signing the agreement. It’s like, this works. This really can work. So we scale from there. Go on to the next one, the next one.

That first year, I ended up doing 10 mobile homes all myself, rehab. I put them out on the market. I was an official landlord, if you will. From there, we scaled on to rent-to-owns, to no screening financing. Coaching came in a little further after people realized what I was doing, talking about it. Can you teach me? Can you show me?

Basically, when I think about coaching and mentoring is I just show people what I do. What I do, I know works. I don’t try to read up a book. I’ll teach you what I know, I know it works, it can be done. We’ve just scaled, we just go from there. From that first and 10 mobile homes that first year, we’ve done probably more than 600 transactions overall with everything we do. And we did just acquire our first park this year also.

Andrew: That’s so cool, man. Congratulations on your success. That is fantastic. What don’t we know about mobile home investing, the typical person? You see the mobile home parks. But what don’t we know about the individual trailers, investing in those, and what matters?

Jose: I think overall, mobile homes anyway is they’re very overseen when it comes to real estate. I call it the hidden side through real estate that a lot of people are still not aware of. Now, when you think of mobile home parks, that’s one investment in itself but individual wants. There are so many opportunities. We do rentals, rent-to-owns. Like I said, we create financing, we flip them. We do Airbnb, Section 8, veteran-assisted housing. It’s endless opportunities, and all these things can be streams of income also.

Andrew: That’s really cool. How would you say your strategy has changed from when you first started to now? Is there maybe something that happened? Maybe your first ones were a little more rough, and you’re willing to do more rehab versus now. Is there any other thing that you would say, hey, this is how my strategy has changed, this is my buying criteria now compared to where it was?

Jose: I will say, responsibility, I want on my hands. If I’m going to do a rental, I’m well-prepared to know I’m a landlord. I’m going to be a […], my people, or whoever had been charged, that can handle some like that. I’ve changed more into the rent-to-own for two reasons. One is I don’t want the call, I don’t want to be a landlord. I want to be a homeowner and then finance somebody else, and I do want to help people achieve the American dream of owning something and not just renting.

Andrew: Got you. You started out renting thinking, hey, I want to hold on to these things. That transitioned into more of Lonnie’s model, which is, hey, we’re going to sell these things, create a note, and create a contract where they’re making monthly payments for the equity in the home. Is that right?

Jose: Dead on, absolutely.

Andrew: Okay. Awesome. Mobile home investing, I’ve seen it on click funnels and things. It’s skyrocketed in popularity. It’s insane. The number one click funnel last year was a mobile home investing click funnel. Are there still opportunities out there for individual mobile home investors? Or is it just saturated with investors like yourself?

Jose: That’s funny. You say that is. Seven to eight years ago when I started, it seemed like nobody invested in mobile homes. There’s always been investors, but the ones that did were low key. I’m doing it, nobody knows, keep to myself–kind of thing. Then of course, there’s the stigma that still follows, which I don’t see as a negative thing, just part of what this industry is or can be.

As far as, is it too congested, I don’t think so. I think there are more than enough mobile homes to go around, and there’s even a bigger, greater need for affordable housing, which we know mobile homes are the last resort when it comes to affordable housing. Anybody new in this industry or getting in this industry, to me, is just one more person I can do business with.

Andrew: That’s a really good point. I remember when I first got into mobile home investing, and the reason why I stayed was the demand. Those homes that I had when I was flipping a single family house, everything had to be perfect. The buyers were doing a home inspection, and I had to do even more tweaks during the home inspection process. But when I had those mobile homes, and I was selling them, I had 25 people the first day reach out to me off of Facebook marketplace and Craigslist to buy those.

I would say that that crazy amount of demand, it’s really hard to mess something up when you have that kind of demand. I think I agree with you. I think it’s unique, and it’s adding affordable housing units that otherwise would sit vacant, and people need this type of housing.

Tell me this. With all of your mobile home deals, how are you sourcing them? Are you going directly to park owners? Is that the major funnel for you? Or are you buying these independently from private owners?

Jose: That’s another strategy that has changed a bit for us now. We were doing more onesies, twosies, anywhere I could find a deal with a mobile home. Our branding marketing has grown quite a bit and we’re pushing for it. I want to be known as if somebody wants to sell or buy a mobile home, I want them to think of me. So the branding is huge.

We get calls from people who buy land and basically know nothing about a mobile. They know we could buy them, we can move them off their land. They’ll call me and say, hey, I bought a piece of land, and there’s this disgusting mobile home sitting there. I don’t know if you want or don’t want to buy.

A lot of times, those homes are in such good condition, that they just don’t want them on their land, so we can buy from there. But the majority would be connecting, which is a beautiful network, with yourself. Park owners that come to us and say more so, hey, I have 20–30 homes sitting in my community. That’s one thing I tell these park owners.

I know a lot of park owners unfortunately get comfortable with, well, I got so many active and some are just […] in there forever, I don’t really worry about them. It’s more so bringing that to light. This is costing you money, not making you money. If we’re able to come in here and we start talking numbers, business people understand numbers.

If you had 10 vacant pads at 500 each, for example, how much is that lost revenue a month? How much is that lost revenue in 12 months? That’s a year, not to mention you’re paying taxes on this piece of property, so now you’re paying to lose money. This doesn’t sound right. Now, there’s a purpose for us to work together. We take them on, you profit, we’re responsible. It’s a beautiful partnership.

Andrew: Definitely. It makes sense. From the park owner standpoint, we don’t want the park-owned homes, we just want the lot rent. I’ll never forget that when I first spoke to a park owner when I was Lonnie dealing. He said, hey, you can have the home, I’ll give you a couple of months free lot rent for you to rehab it and sell it. I just want it occupied with a paying tenant, and I don’t want to own the home. I just want the lot rent. That was a huge shift.

Maybe you can talk about that. Since you just bought your first park this year, what are the major differences between your mobile home investments, the Lonnie deals, and then mobile home park investing and mobile home park ownership? What are the pros and cons of each?

Jose: Responsibility. We’re back to that. Again, it’s a partnership, yes. The park, like you just said, they say, I don’t want to be responsible. It’s really what they’re saying. They simply want to rent the dirt, and I have no responsibility with the tenant, with the houses, or with toilet breaks. I don’t care as a park owner, because that’s your responsibility.

The same with me, in a sense, if I invest in an individual mobile home inside of a community, my responsibility is the mobile. Should the plumbing burst on the ground, for instance, that’s not my responsibility. If the light pole, post electrical, whatever is outside the mobile home, goes bad or something happens, that’s not my responsibility.

When I think about it now, if I buy the whole park, I’m very responsible. As soon as we bought that park, two of the homes, actually, they had to get power apparently had to be inspected and permits. It was, I think, over $3000 apiece just to do that. That was like a reality, and there’s the responsibility.

It’s pros and cons like everything, I’m not knocking it by any means. It’s part of the process. But when I think about investing in a park versus a mobile home, it’s a big difference in number and responsibility.

Andrew: That’s a good point, because how you make money currently is you’re buying individual mobile homes, fixing them up, and then selling them on contract to an end buyer that will eventually own the home. That responsibility is passed on to them. They’re responsible for repairs and things, because you’re just generating a promissory note and they’re paying that. Was that right?

Jose: Yeah. We finance to them. It was structured there. For me, rent-to-owns, lease options, or just whichever. But yeah, they are responsible if anything should break it.

Andrew: Got you. That’s where you’re saying, hey, if you own the whole park, you got a lot of responsibility in terms of infrastructure and things that you have to maintain. That’s the difference.

Jose: Yeah, it’s something to definitely keep in mind.

Andrew: I guess the million-dollar question is, hey, how much does it take to get started investing into individual mobile homes? How much does it take to get started? How would you find your first deal?

Jose: You said it yourself a few minutes ago. You said, they would give you the mobile homes. No deal is the same, no investment is the same. We know that, but some mobile homes can be free if you make the right connection with the right park owners, because again, they don’t care about the mobile home, the value, no value. They just want lot rent. When you can be a problem solver, that’s what an entrepreneur is, come into a community.

I can take the fixer-upper, handyman special, call it whatever you want. And I can bring it back up to code, presentable, livable, and get an actual tenant that pays lot rent on time every month or years to come. That’s beneficial, so therefore you may be able to stumble upon free mobile homes that way.

How much can you get into a mobile home? I would say a good $10,000, you should be able to acquire a mobile home, get a rehab out there, and become a landlord.

Andrew: Wow, yeah. $10,000 and some grit to pick up the phone and start calling park owners. Anybody can do it, right?

Jose: Absolutely.

Andrew: That’s fantastic. I know you help coach clients getting started investing into mobile homes. What would you say are the biggest mistakes that you see your coaching client’s making?

Jose: Before they come to me, it’s overpaying for mobile homes, I would say. With anything, you wouldn’t buy a house, stick-built, unless you have comparables, unless you’re able to comp to be able to know what the value is. Mobile homes don’t have that, not individual ones inside of communities.

We don’t have the Zillow, Trulia, FMLS, none of those I call luxurious real estate sites, so therefore you got to do legwork. You got to get out there, make phone calls, find out what sold, what is selling, what kind of condition they sold in, so that you can put a number and say, okay, for this fixer-upper as is, this is what the value is.

One of the biggest mistakes there is they’re overpaying for a mobile home. The profits are X amount. If you overpay, if you start out already wrong and already put more money into, obviously the profit starts diminishing, if not go away all together.

Andrew: I agree with you. Definitely overpaying for a mobile home has to be a huge mistake if you’re not doing comps and things like that, so that’s a good one. Is there anything else that you would say, hey, newbie mobile home investor, Lonnie dealer, watch out for XYZ?

Jose: I would say, stay away from anything under 1980. We know that pre-HUD is 1976 and then obviously, post that. But also, I don’t want to ever limit myself to a permanent position in myself, where everything was to go south, everything went wrong. Let’s say I invest in a 1970 model, single wide, which we have in the past inside of a community. The community is closing or something happens. The relationship there suddenly, park owner, investors don’t get along, they’re going to say, move your mobile home out of my community. You’re evicted in a sense.

You can’t move mobile homes that are made under 1976, so now what? Now you got to move it. It may mean you have to demo it. Start with something I would say 80s; 90s is even better. Just stick with something newer that you can move if you had to move in a sense.

Another one would be investing in certain communities. I have invested in some 55 and above older communities, which is great. The clientele is phenomenal. But again, there’s a limitation there, because when we put it on the market, the majority of the people that were calling us are 30-year-olds, 40-year-olds, and those who don’t qualify for that type of community.

Rules and regulations can be another one. People in communities, most of them, I would say 9 out of 10 people who live in a mobile home community have dogs. That’s just part of their life. It’s a family member the way they consider it. Some of these communities, they say no dogs allowed, period. It used to be no meaner breeds, pitbulls, or whatever that may be. Now, it’s just flatline, no large dogs in a sense.

We’ve lost some potential clients, residents that would have otherwise bought from us if a dog was allowed. You got to pay attention to the age of the home, cost of the home, and rules and regulations. As long as all those check out or they’re not going to be a limiting factor for you at the time of the sale of rent, go with it.

Andrew: Awesome. Those are great tips. That’s fantastic. What are some challenges that you faced when Lonnie dealing or mobile home investing? What are some common challenges you run into?

Jose: It can be financing. There is no financing for our type of investments. There are private money, hard money lenders, maybe. But if you were to try, and I try this for a long time getting started, is trying to maximize. It’s going to a credit union, local banks, or bigger banks.

They’re not going to land on mobile homes individually. They’re inside of communities, and it all boils down to mobile homes are not real property. They’re considered personal property like a car. You know this. They hold the title, and in their eyes, there’s not enough security. You can move anytime you want, it doesn’t happen. But they don’t see it that way. You’re going to run into issues where there are no funds, traditional-wise, in a sense.

The same way the other way around. When I go to sell, I would love to sell to somebody who can go get a loan and pay me off, and then they just deal with the bank, no lending. You made it beautiful, but it’s still personal property, still not enough security, still a mobile home, but you’re not going to get lending for it. That would be one of them all. The whole lending, which again, there are private hard money lenders, but I can’t think of any other challenges and stuff.

Andrew: That’s good. Like you mentioned before, too, the park owner and the park rules, making sure that you’re planning. It’s like for us, we don’t want to buy mobile home parks in blue states—Illinois, California, New York, because it’s just that much harder to operate in those states with more regulation. Whereas if you pick up a state like Indiana, Arkansas, Florida, or more red states, it’s just that much easier to operate, so that’s good.

Let’s talk about passive investing. I know you have people that passively invest in mobile homes. Why do you think busy professionals should passively invest? We’ll just start there.

Jose: Recession proof. You told me this, actually. We had you on one of our podcasts, and you mentioned something that caught my attention. You said, one of these previous months, the interest rate went from 1% to the next. That 1% alone, I think, you said took out over five million people or something from being able to qualify.

Mobile homes or affordable housing. We say that over and over. When there’s a market crash, recession correction, or whatever you call it, everybody needs somewhere to live. Those are the times when we get more people who are in need of—maybe unfortunately there’s a foreclosure in their house, they’re losing their house, whatever it may be, they can’t afford it—we are that solution for it.

When I think about anyone investing, you’re not going to make any money putting your money in the bank, putting it under your pillow. That’s old fashioned. You need to forget about that. You’re trying to create passive income, and you can put your money to work.

We offer opportunities in the sense, where maybe somebody can come in and work with us. We’ll do this sweat equity, take the home, they just invest their money, and watch a return come back. But again, when I think of investing, there are so many things we can invest in, but there are not many things I can think of investing that are recession-proof like mobile homes.

Andrew: Yeah, same with the parks. It’s just that demand factor. I think affordable housing is not an easy problem to solve. Manufactured housing definitely can take a dent out of it. That’s amazing.

Let’s talk about mobile home parks and investing into those. I know you have one. What would you say are the most important things that passive investors need to look out for when investing into an entire park?

Jose: My knowledge is limited there. We’re still learning each and every day, educating ourselves. I’ve learned a lot from you when it comes to the parks. You got to do your homework. Everything, even one mobile home in itself, in real estate you call it the due diligence part. You have reviewed everything, know as much as you can about this one specific home. When it comes to a park, you’re talking about a whole bigger factor.

Now, there are multiple mobile homes. Now, is a city septic a sewer? Is there a waste to expand, maybe? Is the mobile home park up? Can it be grandfathered? I know that was a huge one I was looking into. Should I move a mobile home out? Can I bring a new one to replace it? Can I add extra pads?

You get into the whole numbers breakdown over what is the current cash flow, which I don’t think there’s one park owner besides Andrew who actually has numbers together. He pays in cash. It’s this one giant circle of we’ll figure it out kind of thing. I would say, probably do the due diligence and focus on the infrastructure first, even before getting into the numbers.

Andrew: It’s funny you mentioned that. I spoke to a seller of a mobile home park that we’re buying or under contract to buy. He says, hey, we don’t have tax returns. There’s a certain schedule that you can get. I think 8820 or something.

He’s like, I’m not sending you my whole tax return. You always get that weird phone call where he’s like, hey, you’re not recording this, are you? I’m like, no, why would I be recording this? He’s like, oh, well, I take a lot of cash, and I don’t want the IRS making more than they should.

You run into that a lot with a lot of these mom and pops that don’t have their financials in order. But a more professional operator realizes that you’re stepping over dollars to pick up a dime, because the best financing you can get, you’re going to have to have good financial records. The best financing you can get on a mobile home park is going to be with those agency lenders, and they require tax returns and all those financials to be perfect. It’s just interesting.

Would you recommend that someone start out as a Lonnie dealer or a mobile home investor before getting into mobile home parks and mobile home park investing? Do you think that would be a logical path to dip your toe in the water if you want to be an active mobile home park owner someday?

Jose: I say this to my investors. The best mobile home park operators are those who start out as Lonnie dealers, because I see a lot. Anybody can get into this industry, this business, but I see a lot of people come from real estate, apartments, condos, houses, and they’ll ask, how do you deal with this? All this going on stuff, there are so many moving parts. It’s a different environment, it’s a different clientele.

When you start out as a Lonnie dealer, it’s almost like you’re starting from the bottom to the top. You’re going to see every level of it. You’re going to meet the people, the clientele, you’re going to see the product, you’re going to understand how mobile homes operate in itself.

Also, another thing I see park owners is a lot of them don’t even know how the mobile home is set up in a sense. They don’t know how to rehab. How do you fix this? Simple little things like that. Nothing against them, but should they start as Lonnie dealers like you and I, we’ve seen them, we’ve been there, we’ve done that. It just makes it easier when you get to that level of operating or owning a park. You know how everything in a sense works.

Andrew: That’s a really good point. I’ve spoken to countless park owners that when they’re rehabbing a home, they don’t realize that, hey, the windows are a different size, the doors are a different size, the drywall is a different size. A lot of this is special order. You can’t just go to Home Depot and buy this stuff. It can be more expensive.

Or you’re going to have to have a hodge-podgey rehab, like the doors is there, but they cut it too short, so there’s a gap at the bottom, and the weather strip is letting the air in, just weird things like that that you don’t think about. That’s good advice.

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

Jose: All age, very strict in rules and regulations, but fair for the community in looking out for. That’s one thing. When it comes to screening our tenants, I’m not so focused on their credit. Their finances in a sense, I do pay attention to. But to me, I’m always thinking more not just for me, but also the community. Who am I bringing into the community is going to be part of that community.

When it comes to the backgrounds, I’m checking very strongly on criminals—sex offenders, felonies, that sort of thing. I don’t want to live next to something like that, then I don’t expect the neighbor too, or these kids next door too. I think that a more sophisticated, perfect in a sense, community would be one that is thoroughly back-screened, everybody, and it could be maybe an all-age community.

Andrew: Okay, and then how about from a mobile home investment side of things like a Lonnie deal? What does the perfect Lonnie deal look like in your eyes? And why?

Jose: Low entry, high reward. We find mobile homes in all conditions, but the one that takes the least effort. Some of these mobile homes, we’re less than $5000 into the mobile, and we turn around and sell some of these for $25,000 and $30,000. We may take a $5000 down payment, and all of our money is paid in full. Now we can reinvest in our collective passive income for three, five, seven years, sometimes on that same mobile home. I would say low entry with a high reward.

Andrew: What is the typical return on a Lonnie deal that you’re doing?

Jose: I would say, on average, where we stick to certain markets, it’s about that. We can be maybe, at most, my blueprint number is 1/3 of all ARV. If I can sell it after a repair value of $30,000, then I don’t need to buy a mobile home overall for more than $10,000. That’s the whole home, the rehab, labor, holding, everything $10,000 tops. When I go to sell it, again, I can list it for $28,000–$30,000.

Andrew: The famous home flipping equation that I grew up on or I was taught was 70% of ARV minus repairs was the offer price to do a flip. You’re saying, hey, I’m going to do a third of ARV, that could be a really profitable deal, but I think it takes a little grit, it takes a little hustle, and you got to roll your sleeves up and be hands-on. It’s not completely passive as you would think, because you’re actively getting involved. But it could be potentially really profitable.

Jose, what do you think is the biggest threat to mobile home investing? Play devil’s advocate for a minute here. What’s the biggest threat? What’s your biggest concern or worry that could mess up your MH investing?

Jose: Unfortunately, removing them. I have not heard of a county, a city, or a state who are thrilled to have mobile home parks. That’s the community down the street. It’s almost like that roll of eyes at any tax office or any government for that sense, even though they would all agree that there is a need for more affordable housing, and that’s what mobile homes are.

I think a worry would be if maybe a city, county, or state is trying to eliminate mobile parks. That would be the end of it. We do individual mobile homes on land in itself, but the parks are where we do the majority. That’s what we have. Lonnie goes back to back to back, so eliminating parks would be an issue.

Andrew: Definitely. Awesome, Jose. Is there anything else that you think our listeners should know about Lonnie dealing or mobile home park investing just before we sign off here?

Jose: Like Andrew said, you got to get a little dirty, you got to roll your sleeves up. This is one of those industries where you’re going to have to dance a little bit. The more you do, the more it’s going to benefit you.

Getting out there, and even being in the environment. Be part of that environment to learn as much as possible. It goes with contractors. I’ve been known to be right there beside a contractor, not micromanaging, but I want to know what they’re doing. Just for later future purposes, I know how that turned out while we’re doing this, while we’re fixing this. Learn as much as possible.

Andrew: Awesome, great advice. Jose, if any of our listeners would like to get a hold of you, how would you like them to do so?

Jose: You all can always email us at j@garciamhu.com or visit our website where we have all of our social media. LinkedIn, too, which is garciamhu.com.

Andrew: All right, and we’ll put that in the show notes, garciamhu.com. Thank you so much, Jose, for coming on the show.

Jose: Thank you for having me. Absolutely.

Andrew: That’s it for today, folks. Thank you so much for tuning in.

https://keelteam.com

Andrew is a passionate commercial real estate investor, husband, father and fitness fanatic. His specialty is in acquiring and operating manufactured housing communities. Visit AndrewKeel.com for more details on Andrew's story.