Listen on Apple Podcast here: https://podcasts.apple.com/us/podcast/investing-in-mobile-home-parks-for-time-freedom-with/id1520681893?i=1000697653595

SHOW NOTES

Welcome back to The Passive Mobile Home Park Investing Podcast, hosted by Andrew Keel! In this episode, Andrew Keel sits down with Kyle Grimm, a full-time real estate investor based in Quincy, Illinois.

Kyle Grimm’s journey began in high school when he made his first investment—a house he purchased for just $5,000! Fast forward to today, and Kyle Grimm has built an impressive portfolio spanning single-family homes, small multifamily properties, self-storage facilities, mobile home parks, and even an RV campground. Currently, Kyle Grimm owns 330 mobile home park lots, with 95 more units under contract.

Kyle Grimm shares hard-earned lessons from his investing career, including his first mobile home park deal, the importance of vertical integration within mobile home park investing, and how to build a successful trailer park investment strategy.

Kyle Grimm and Andrew Keel also tackle mobile home park industry challenges like rent control regulations, cash flow management, and the stigma surrounding mobile home parks.

Listen in for real-world insights, actionable investing tips, and lessons from Kyle Grimm’s journey!

Andrew Keel is the owner of Keel Team, LLC, a Top 44 Owner of Manufactured Housing Communities with over 3,250 lots under management. His team currently manages over 40 manufactured housing communities across more than 15 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.

Check out Andrew Keel’s FREE e-book, “The Top 20 Things You Need to Know Before You Start Investing in MHPs” which you can also find on our website,  https://keelteam.com/

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. 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. We have a goal of hitting over 500 total 5-star reviews, and it would mean the absolute world to us if you could help contribute to that. Thanks ahead of time for making our 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

02:51 – How Kevin Bupp’s influence shaped Kyle Grimm’s approach to Mobile Home Park investing

05:50 – The Top 20 Things You Need to Know Before You Start Investing in Mobile Home Parks

06:30 – Lessons from Kyle’s first mobile home park deal and the due diligence process

14:00 – Why real estate investing isn’t for everyone and common misconceptions

15:00 – Overcoming the stigma of manufactured housing community investing

19:37 – Vertical integration within mobile home park investing: learning to trust and delegate property management

26:19 – The danger of relying too much on cash flow for capex and infill

35:39 – Why having a great mobile home park operator makes all the difference

39:30 – What are Direct Billed trailer parks and how do they fit into Kyle Grimm’s strategy?

45:00 – Rent control regulations and how they impact mobile home park owners

51:20 – Reaching out to Kyle Grimm

00:00 – Closing thoughts and final takeaways

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

Links & Mentions from This Episode:

Kyle Grimm’s LinkedIn: https://www.linkedin.com/in/kyle-grimm-1aa207132/

Kyle Grimm’s website: https://thekylegrimm.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

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TRANSCRIPT

 Andrew: Welcome to the Passive Mobile Home Park Investing Podcast. This is your host, Andrew Keel. Today, we have Midwest mobile home investor Kyle Grimm on the show. 

Kyle is a full-time real estate investor based in Illinois with a diverse background in real estate investing. His journey began in high school when he made his first investment, a house he purchased for only $5000.

Since then, Kyle has built an impressive portfolio, investing in single-family homes, small multifamily properties, self-storage facilities, mobile home parks, and even an RV campground. Today, he specializes in mobile home park investing, having acquired approximately 330 lots with 95 more units under contract right now.

Kyle, welcome to the show. 

Kyle: Thanks for having me. I’m super excited to be here. 

Andrew: Would you mind starting out by sharing with our listeners a little about how you got started in mobile home park investing? That’d be great. 

Kyle: Well, first of all, I got to say even though I had some input on that bio, it makes me sound way more advanced than I really am. Just got to throw that out there, I’m not that special. Did you ask how I got started? I just tell my brief story? 

Andrew: How in the world did you get into mobile home park investing? That’s usually a good place to start. 

Kyle: I’ll even step back a little bit further and just say props to my dad. He breathed the love for real estate into me. He was a financial planner as I grew up. He always told me, he was in real estate back when he was 20 years old all the way up to his 30 and he sold all of his rentals, and that was a big regret of his getting out of real estate. He had a big impact on my love towards real estate. 

I had no plans of going to college. My dad didn’t go to college, neither did my mom. I never was really on that route. It was 2012, my senior year of high school, and I just started having more and more interest in real estate. There was this little house for sale in the worst part of town. It was vacant, it was a shell of a house, no one should have bought it, and I made an offer for half of what they’re asking for. 

Long story short, I got into real estate, started falling in love with it, and realized this was my path. Of course, there’s a ton of other details I’m leaving out. I think I was obsessed with all the podcasts. I’ve always been a podcast junkie. From BiggerPockets to Kevin Bupp was a huge one. Then, of course, I ran across Frank and Dave.

I think that Kevin Bupp was officially the one that got me into parks. I remember him talking in an episode about the power of just buying one or two parks. For me, my whole philosophy and investing up to this point has been time freedom, being able to spend time with my family, being able to travel, and not having a ton of people to answer to. 

He talked about in his episode how one or two parks can really change your life and give you so much freedom. I went to the Frank and Dave Boot Camp in 2016 (I believe), and then it took me from 2016 until 2019 when I actually purchased the first park. 

It got to say I’m the luckiest guy alive with some of the deals I’ve been able to buy. I think part of it’s because of my location. I’m in the middle of nowhere. We can get into that further. I know now that if I want to grow, especially to the size of your at, I have to leave this area. 

That first deal in 2019 was a 36-space park. FEMA had actually built it after a flood. It was fairly new. The Mississippi flooded in 1993 so the park was built in (I think) 1994 or 1995. It was asphalt, concrete, curb and gutter, 100% tenant direct bill, city water, city sewer, electric, gas, you name it, it’s all directly billed to the tenant. Everything was beautiful. The park was in such good shape. 

I got so lucky because this park was being auctioned. It was an estate of a local guy who had amassed a ton of real estate. He passed away and unfortunately, his son and then I think grandson were into some drug use and different things. The whole portfolio ended up getting auctioned. It was some no-name auction company with zero web presence. The way that you would find out that it was for sale was you’d have to drive by and see a sign that said being auctioned on such and such date. 

Of course, back then, the amount that I thought it was going to go for was a ton of money, and ended up paying $372,500. I remember sitting in the basement of my parents’ house hitting bids and just being scared to death. It ended up landing on $372,500. I didn’t realize how good of a deal it was until a couple of years later. 

That’s what got me started. I will say I built up some parks, sold them all off. I love doing different things. I get a little bit distracted, but now I’m back on the parks and I’m really going to start focusing heavily on parks again. 

Andrew: That’s fantastic, man. Not many people can say that they have that story where they were in their basement bidding at an auction to win a park. What type of due diligence did you do on that first deal? 

Kyle: Next to zero. Of course, I drove through the park. The thing was there were zero leases and zero contact with any seller. All the information that I had was simply from this auctioneer who was used to auctioning people’s household goods. He had some brief information like there were 36 lots, but the thing was because of the drug use of this family there were no records of rent collections, no leases. The auctioneer had no idea who was paying, and who wasn’t, and this had been going on for years, multiple, multiple years. 

Andrew: How many were occupied? Did you know any of that information? 

Kyle: I think there were 30 occupied spaces, because I think I moved four homes in, and I had one more home to fill before I sold it. I’m pretty sure that’s how it was. It was a huge gamble and I’m trying to remember if before I closed, pretty sure I went and knocked on doors and just tried to get a feel for how things are, like are people actually paying?

Andrew: Do you have water access? Is water okay here? Is the sewer working?

Kyle: In hindsight it was crazy of me, but that’s a point. Honestly, at some point you have to swing the bat. This was a little bit too crazy to swing at, but in hindsight it all worked out. Thankfully, I had a good enough feeling. 

Andrew: You filled it up and then sold it, I assume?

Kyle: Yeah. Again, I got super lucky. It was in 2019, I paid $372,500, and filled four vacant lots. The lot rent was $150 when I bought it. I have to be careful what I say. I believe that definitely a part of this business, you have to be very ethical about raising rents, but you have to keep rents up with inflation and with where the market’s at. In hindsight, I actually would have raised rates. 

Andrew: Can’t even buy a dozen eggs for that now. 

Kyle: I know, it’s crazy. I went and bought eggs last night myself because when we went to Walmart a couple of weeks ago, they were out. But anyway, I purchased it at $150 and I only moved it up to about $180 in the years that I owned it because I didn’t know what was normal.

Andrew: Years, with S in the end.

Kyle: Yeah, I sold it in 2023. From 2019 to 2023, I raised it from $150 to $180.

Andrew: You’re a mom and pop. 

Kyle: Oh, 100%. I’m a mom and pop investor. I buy them from mom and pops and then I just keep it as a mom and pop.

Andrew: If you got that great of a deal on it, what did you sell it for? 

Kyle: It’s right over a million so it was about $1,000,040 million. I sold four parks at the same time, and I believe that the park we allocated is about $1,000,040 or something like that. I’ll say just about zero investment into it. Like I said, it was pristine. I had four lots to fill. I found used homes, brought them in, sold them, and got all my money back. It’s just an incredible deal. I got super lucky. 

Andrew: This was your first mobile home park on the side? Before this, you have that house you bought for $5000, but you had some other single-family stuff going on as well, right? 

Kyle: Yeah. At that point, I had bought that $5000 house. There’s a big time between 2012 and 2019. I ended up buying five houses on that same block, little shotgun-style houses, and then I ended up selling them, actually sold them to my dad. That’s how my dad got back into real estate. I sold him all these houses. 

In the meantime, I was doing duplexes. I had four units. I traded to a 12-unit apartment building and did some small renovations on different houses. I was doing various things and also working as a realtor to pay the bills more or less. That was my day job, but quite a bit of random stuff. Yeah, super fun. 

Andrew: Instantly after high school, you were like all right, this is what I’m going to go into. I want to do real estate. I’m not going to go to college. You got your license and then worked as a real estate agent as well right after high school. 

Kyle: Like I said earlier, there are a lot of details I left out. I was pretty lost there for a while. I got into real estate in 2012. I went to a two-year community college for construction management, and I was thinking that I would potentially go on and get a construction management position all the while I was still doing real estate, but not to the level where I could really support myself financially.

At one point, I got licensed for property casualty insurance, so I started selling insurance for a while. I lived in St. Louis. I moved down to St. Louis for a while, and tried wholesaling houses down there. 

There was a period of time when I was pretty lost on what I wanted to do, but I always knew I was doing this real estate thing on the side back here. I can always go back and do that. Ultimately, it became more and more clear as I hit some pretty good deals like this park we’re talking about. This is what I should be focusing on.

I will say I have the best life. I’m super fortunate with my parents. They paid for my community college. I had zero student debt. I lived with them as long as I could. Then when I went to St. Louis, I house hacked a duplex. I was always able to keep my expenses extremely low, which was able to keep me in real estate. 

Even once I got married, we got married in 2019. The year that we bought this park my wife was working. She had just become a CPA, so she was the breadwinner. We live practically 100% on her income and we lived in one of my four units. The tenants paid for my mortgage and everything else. There’s a long period of time where I just got lucky with some of the stuff, so I’m super grateful for that. 

Andrew: I think it’s good that you recognize that too and you’re just grateful. Did you use an FHA loan to buy one of your first quadplexes and do that method? 

Kyle: I never did. I could have, but I didn’t need to at the time.

Andrew: I think most people ask me, hey I want to get into real estate investing. That’s where I point them. Just FHA loan, get a quadplex, live in one of the units, and then after a year or so you can move out and boom. 

Kyle: A hundred percent. I’ve recommended that to multiple of my buddies. I will say I used to recommend doing that to everyone. I’m like, you got to get into real estate. It’s the greatest thing ever. But now as a realtor, I would help buddies, you need to buy a duplex and start investing. I’ve sold to two different friends to help them get into real estate. Then they find out a year later hey man, this is not for me. It’s not for everyone. I will say that, especially mobile home parks. 

Andrew: Especially. There’s this one picture I took where it was a Saturday afternoon, and most people are hanging out, going golfing. I was at Home Depot with a shopping cart full of rat traps and a weed killer. It was a little nine-unit in Daytona Beach, Florida, that was an F-grade apartment complex that I was managing myself. I’m putting up rat traps around this place. I’m getting hands-on in it. Being a landlord is not for everybody. That’s for sure a thing.

Let’s go back to mobile home parks. What was the toughest hurdle that you had to overcome in mobile home park investing? 

Kyle: The first thing that comes to mind is obviously funding. If the funding isn’t there, then that’s a hurdle. But I think that honestly, the stigma or the reputation is one of the things that a lot of people may have a hard time getting over. 

I’ll say this about mobile home parks because I’m not going to lie, there was a time where, I don’t want to say that I wasn’t super proud to tell people I buy mobile home parks. I’ll say this about parks. There are different levels of parks, just there are apartment buildings. There’s your F-grade mobile home parks and then there’s your luxury oceanside parks. 

I have found the most recent park I bought is one of those nicer parks and it’s not even a mobile home park. It is a retirement community full of just wonderful people who are super polite and really good people. Where I bought some parks that are a little bit rougher and it’s just a completely different environment. 

I think one of the bigger hurdles, honestly, could be mentally for people, like I don’t want to buy a mobile home park. It’s not what you think it is. It’s a community where the people that are there have been there for probably 10-plus years. They know everyone. They watch out for everyone. They care about who owns it because they want their community to be taken care of. 

This last community I bought, I was getting calls from these people thanking me, thank you for buying this place. Thank you. We’re so glad that some big huge corporation who didn’t care about us didn’t buy. I’m rambling now, but I think one of the bigger hurdles is just mentally.

Andrew: Yeah, mentally. You mentioned funding. How did you get your first deal, to put it together? Was it just house hacking and you sold some of that initial portfolio so you had the capital in-house, or did you raise money from investors? 

Kyle: At first I got to say again, props to my dad. My dad has helped me out tremendously. He owned 40% of that first park that I bought. Without him, it would have been very difficult. But looking back over my timeline, because I’ve been doing this since 2012, it was always just buy something, fix it up, try to sell it, buy something bigger, and just get the snowball to start rolling. So that’s how I’ve done it.

That’s why back in the early part of 2023, I sold four of my parks. I didn’t want to bring on outside investors at this point. How do I get to that next level? I’m going to have to sell this stuff and then we’ll go up a couple of rungs. 

That’s a whole conversation I want to have with you offline because I’m still trying to get over this mental hurdle of bringing on private money or investors. At this point, I’ve really enjoyed not having to answer to investors, just doing this all on my own using the cash from deals I’ll flip or turn around, and then that’s how I’ll fund the next one. 

Andrew: Raising money is definitely a whole nother realm. When it’s your own money, you think you care and you’re watching things. Well, imagine taking from someone else—your friends and family and neighbors. It’s just a whole nother level of responsibility and stress, quite honestly.

It’s the same thing. It’s not for everybody, but I think it was really how I could keep doing this full-time because I had run out of money. In my own life I ran out of money, and to go to that next level was to keep buying, I had to take on money. 

Kyle: I think I am to that point.

Andrew: If you build the funnel, you have the acquisition funnel going and you’re getting the deals, which is really the hardest part, once the deal flow hits a certain threshold, then it is okay. I’m going to have to turn away good deals if I don’t have the money to take them down.

Kyle: Exactly. I’m definitely gearing up to start bringing on investors. It’s just been one of those things for years. I’ve been saying I’ll do it. I am really happy with the way I did it with my own money. I bought eight parks, I should have counted, I think eight parks now. I’ve done it enough where I feel pretty confident in what I’m getting myself into. Talk to me in a year and we’ll see where we’re at. 

Andrew: Because you got into RV parks, you own an RV park, you have several mobile home communities, you have a self-storage facility, still?

Kyle: I bought three now. 

Andrew: Three self-storage facilities. How do you manage it all? Because I’m pretty sure the last time we spoke, it was in-house. Do you still handle all of that? 

Kyle: Yeah. I guess I call myself—this sounds fancy—vertically integrated. It’s me and a couple of people. I hired a girl, Amber. It’s been probably two or three years now, which was a huge mental hurdle for me, like I’m hiring someone. Forever it was just me, my cell phone, and software. 

Amber, I would call her my operations manager/executive assistant. She does so much for me, whether it’s running errands in town, picking up printer paper or checking the PO box. She cleans certain properties for me. She’s the main girl that works for me. 

Then, of course, I have a lot of independent contractors that help when I need things like plumbing and electrical. With the newest acquisition of two parks, I acquired a manager that more or less came with the park. She’s been managing for 15 years and she is fantastic. That’s been a huge part of my confidence boost of realizing, okay, I have Sheryl now. 

We could start to scale this thing if we want. There are other people, of course. My mom helps me with some different bookkeeping things and my wife’s a CPA, so she’s helping me do all the bookkeeping at the end of the year, doing the taxes. 

But everything else, it’s all in-house. We use RentManager, Easy Storage Solutions for our storage facilities, and QuickBooks and all the different stuff. That’s the way we have it set up. 

Andrew: Very cool. Tell us about your most recent mobile home park acquisition. When was that? How’d you put the deal together? How did you pivot around higher interest rates to get the deal done and make it make sense? 

Kyle: The track record or what led up to it was I had sold these four parks in 2023 and I 1031’d that money into a farm. I owned a farm for a while. We’re talking row crops, corn, beans, and then a bunch of timber. That was fun. 

Andrew: Did you farm it yourself, or did you contract that out to an actual person?

Kyle: I contracted it out. He paid $200 per acre to rent the farm. Not a good investment at all. When I sold my four parks, I could not find anywhere to put my money and I had to, so I ended up 1031 into the farm and I was just like you know what? In a year from now, I’ll sell this thing and we’re going to save. It was multiple hundreds of thousands of dollars worth of tax that I was going to save by just buying something.

We sat on the farm and then just over a year later, I sold it, got my money back out, and made just a little bit of money. Then that’s what I used the 1031 exchange. It was two parks that I bought and I’ll give you a little bit of the details.

It was owned by a Baptist Foundation of California. The people who developed these two parks back in the 70s donated them in their older age to this Baptist Foundation of California. From the point I wanted to buy a park, I had been calling this Baptist Foundation. 

I think the first time I called them was in 2017, maybe 2018, and ended up making an offer on one of the smaller parks they own, and they more or less told me to kick rocks. You’re not even close to what we want in terms of price. 

My goal was just to keep talking to them and they had this manager, Sheryl, who I would continuously text. Hey, how’d this last cold stretch treat you? Did you guys have any frozen water lines? And just stay in touch with her.

I got again super lucky. She called me just this last summer, this mid-summer. She called me and was like by the way, the Vice President of the Baptist Foundation just flew into town. They’re selling the parks. I’m like, seriously? Okay, can I grab lunch with them? She’s like let me ask him. His name was Ty. Ty ended up reaching out and said, hey, let’s grab Panera. I’ll meet you. 

They had already employed, is it Colliers? Was it that what they’re called? Big real estate company. 

Andrew: Yeah.

Kyle: They were already putting together an appraisal and they were going to list the property. Somehow, I was able to win the sky over. I told him my story and told him I’m local to this park. The original developers would have loved to see it stay in the hands of someone local. 

I ended up making them an offer before it hit anything close to being public because I knew that it would go just like this. It’s a nice park. I ended up making an offer and we went back and forth a couple of times, but I didn’t realize how good of a deal it was until after. There are some downsides to it. Guys like you I know you wouldn’t have bought it because the big one has a lagoon, but yeah, it’s been fantastic. 

That’s the story of how I ended up with it. It was never truly on market, and that’s honestly how I bought all my deals is just off-market, just continually reaching out. 

Andrew: Cold calling, reaching out, and they’re all local to you, right? The storage, the RV park, everything is pretty close to where you live. Where is that again? 

Kyle: Do I need to disclose my location? No, I’m kidding. 

Andrew: Not exactly. 

Kyle: No, I’m kidding. I’m in Quincy, Illinois. I’m two hours north of St. Louis, Missouri. If you follow the Mississippi River up, middle of nowhere, a town of some 40,000. The metro’s maybe 70,000. Most of my deals have been within, I’d say a two-hour radius, but everything’s pretty much just right here. I’ve just had a couple of deals further out. So mostly everything is just right in my backyard. 

Andrew: What mistakes have you made, Kyle, in mobile home park investing specifically that we can learn from?

Kyle: Probably what comes to mind is, in the past, it was easy for me to buy a park and think that I’m just going to fix it up using the cash flow. Maybe I’m just not buying them right enough. I’m buying them too expensive. But trying to take care of big issues with cash flow is so difficult. I have been unrealistic about that in the past and I really learned my lesson here. 

I bought a 41-space park, it was November 2024, all in terrible condition. Just a terrible condition. My plan was because on paper this thing’s going to cash flow like crazy. Each one of these is renting out for $500 or $600 a month, some of them $700, but I just didn’t plan ahead enough to tell how expensive it was going to be. 

I have a guy who’s worked for us exclusively doing mobile home remodels, Tom. I remember we got Tom going on these and the money was just evaporating. I ended up blowing through a couple of lines of credit. I think that I learned a lot through that. You have to have your game plan in order. You need to set aside what it’s going to take to get these big projects done. 

Andrew: Especially, I will say in park-owned homes, buying big is always more expensive than you think. The turnover will kill you, then they’re expensive to maintain and get back where they can be moved in. 

Kyle: It was a sad situation with this park, again off-market. The long story short is the seller’s CPA works with my wife and found out through Linkedin that I bought parks. He calls me and says hey I have a client that wants to sell this park, and I was like which one is it? I kind of know all the parks and I don’t think I know which one you’re talking about. He tells me and I’m like I would not touch that thing with a 10-foot pole. It’s one of the worst parks in the area. 

He’s like, my client wants $1.1–$1.2 million. That’s what we think it’s worth. I was like in my head, this thing’s not worth half of that. Long story short, I ended up meeting him. I’m just like hey, I’ll meet the seller. We’ll talk about what I think it’s worth and I can maybe help him. I ended up making an offer to him and he accepted it on the spot, and it was half of what he wanted.

Andrew: Oh geez. He wanted out as well. 

Kyle: Yeah. He was saying originally, $1.1 million. I offered him $600,000 and he took it immediately. Then I did a little bit more due diligence, and I’m like I got to be at $540,000 to make this work. Even at that, I was too high in hindsight. 

We ended up doing really pretty good on that deal and ended up selling that just a few months ago. But the lesson is go in with the money you need upfront, have it set aside ready to go, because if you’re thinking that you’re going to just do this on cash flow, it’s not going to happen. 

Andrew: That can take a really long time. I think one thing that came to me when you were describing that is you’ve bought really rough parks with really old home inventory. Then I’ve seen pictures of the one you’re mentioning. They’re like a retirement community park that’s a gorgeous paved curb and gutter the whole bit. 

What are the major differences there? Which one’s cash flows better after you stabilize it? What would you say is the major lesson that you walked away from those two complete polar opposites and were like okay, moving forward, this is my strategy. I’m not going to do parks with this anymore.

Kyle: There’s a guy in Tennessee you might know. His first name is Sean and he owns a lot of parks. Not many people know him, but he’s a very successful dude. I actually called him specifically about this 41-space park, all park-owned homes, and he told me don’t do it. He said what you can’t underwrite for is the brain damage. That stuck with me because the brain damage was astronomical. There’s a six-month period where cash was just flying out, where I was pretty stressed.

The big difference between the two parks is just the brain damage is so much less. I will say it’s probably harder to create much value in a park that’s already beautiful and stabilized. Unless there are other areas where it can create value, whether it’s billing back for some expenses or the rents are way low. But to me, I am realizing at this point in my career, I’m less interested in taking on these just massive turnarounds, and I’m looking for better assets. 

I think something that’s been hitting home with me is, is it Warren Buffett that talks about how he’s looking for really good businesses at an okay price rather than a screaming deal that is a terrible business. 

As I was saying earlier, there are different levels to these parks. I might get a screaming deal with a 15 cap in the middle of nowhere, that’s absolute garbage, but it’s going to cause me a lot of brain damage and is it really worth it? I would prefer moving forward, and move into nicer properties that cause less brain damage and are a better business long-term. I think that’s what I’ve been trying to teach myself. 

Andrew: Same. Yeah, you’re exactly right. The brain damage is much higher, but there’s something irresistible about hey, here’s a park that’s 60% occupied. You fill it up and in a couple of years you come in fully capitalized, and you can add a lot of value really fast. But I do think that right now I’m selling a property in Ohio. I bought it back in (I think) 2018 or 2019 for $666,000, put a bunch of money into it, and now it’s worth over $4 million. 

But the thing about it is, it needs to be sold in 1031 into something nicer, is the idea like what you’re talking about where it’s okay, I want a 1031 into a higher quality asset. It’s going to cost more, probably a lower cap rate. But will likely come with less brain damage.

I think there’s something to take away from that. But I think if people just getting started, there’s a lot of value to be had from those value add deals that are just right there for the taking. If that’s the only thing you have going on, you can totally handle it. It’s not rocket science. It just takes a lot of elbow grease to get things that need to be done. 

Kyle: A hundred percent. There are a lot of people that want to try to replace their income with investing in any type of real estate. If you’re trying to do that and you’re trying to do it fast, you’re likely going to need to go after those broken assets that are going to take some work. But that’s how you create value quickly. 

That’s how I grew my snowballs. You buy some junk and fix it up, but then once you get to a certain level, it’s like wow if I can just start buying nicer parks and maybe the returns a little bit less long-term, but my life is a lot happier.

Andrew: Yeah, because our first deals that we bought in 2017, at this point are just coupon clippers. But in the beginning, the first two or three years, it was crazy. There are all these rehabs going on and contractors skipping out on us after we paid them the down payment money for their materials and everything else. We had to get through that, but then once it got full and everybody owned their homes, it’s just quiet. It’s a very consistent investment.

Let me ask you this Kyle. If you were looking to invest passively into a mobile home park syndication, what are the most important things you would look for to ensure success?

Kyle: I knew you were going to ask this question because I’ve heard you ask it 100 times and I still don’t really know how to answer it. But here’s what I’ll say. Everyone’s heard the saying, bet on the jockey and not necessarily the horse. I think number one is who’s the operator? It can be a great asset, but if the operator’s not there, then that’s a problem. 

I think a huge part for me, if I ask myself if I will invest in this person is, I want to know who they are as a person. Your personality and your ethics means a lot to me. I want to know who you are. 

I think a good way to figure that out is if this person is public, if they’re putting out a podcast or something. Just devour it. Listen to all the episodes because eventually, you’ll pick up on little things about that person and you’ll start to put together a picture of who they are, like yeah I can trust this guy. 

Here’s an example of a guy who I’ve listened to on his podcast, never met the guy, but I would probably invest with him because I think he seems like a good human. It’s Chris Powers with Fort Capitol. I listened to a ton of his podcasts, and he’s just a good dude. 

Maybe that’s naive of me to say I need to look at his investment track record. But to me, the personality of who they are as a person means a ton. Obviously, the simple stuff like make sure they’ve actually done deals, see if you can talk to some of their other investors. 

Another little tip if they were currently operating deals, you can maybe snoop around and find these properties on Google Maps and read the reviews of the tenants. What are the tenants saying about this company? I have found shocking stuff by doing that. Oh, I know that they just bought this property. What do the tenants say? 

Andrew: That’s pretty good. I’ve always been like you can hire someone on Craigslist to go for $50 and go do a drive-thru video of one of their parks. But that’s even better. Just look at the reviews. Obviously, there are going to be some negative reviews. I think every person that I’ve evicted has left me a one-star review on our Google page and it really burns when we get those, but we had to evict you. It was the prudent thing to do.

Kyle: I want to almost retract that, honestly, because I do agree. I’ve had negative reviews on our campground and they hurt you, but usually someone’s leaving a review when they have a negative experience. 

Andrew: There are just trolls out there too. Like this week, there’s one guy who’s gone to five of this podcast’s YouTube videos, and has just left some unkind things on there. I don’t know why. 

Kyle: It’s tough. You can’t make everyone happy. Impossible. I think the biggest thing is just to look at the operator and who they are as a person. 

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

Kyle: The easy answer is city water, city sewer, direct billed. That park that I mentioned, the first park I bought was direct billed, and I wish I wouldn’t have sold it now because finding a park that is 100% direct billed is really hard. 

Andrew: It’s so hard and it’s so great when you find one. We have one under contract right now and it’s brain damage. It’s 30 occupied lots, but it’s 71 lots total. This is a huge project. I went to John Squartino, our COO, and I was like hey man, I think we need to drop this thing. This is going to be just a ton of work. He’s like no, we’re not. The city owns the streets and its direct bill utilities. They own all the water lines, which is huge. 

Kyle: That’s incredible. 

Andrew: Water leaks, how many of those issues that we have to deal with? Meters breaking. It’s a great white buffalo. 

Kyle: That is huge, and the fact they also own the streets. I owned my streets, I’ll say that. If they own all the water lines and sewer lines, plus the streets. Sell them to me, I’ll take it. I’ll venture outside of my backyard. 

Andrew: There you go. What does the future of mobile home park investing look in your eyes? It’s different affordable housing solutions. Boxabl, I see different ads popping up for that. How do you think mobile home parks fit in with where things are moving? 

Kyle: Oh man, that’s a big question for me. I’ll say this. A lot of people moved into this asset class, especially during COVID. Even before, the run up. Whether it was Frank and Dave’s Boot Camps or whatever it was, it just shot people in this asset class.

But I feel like we’re going to see a lot of those people start to drop off, and I think that the true good operators will hold on such as yourself and guys like Ryan […], I don’t even know who else to name. But I think there are a lot of people still in this asset class that maybe don’t belong here. They don’t take care of the tenants and they don’t take care of the properties.

I think that we’ll start to see more and more consolidation of good operators. My vision for parks is to lose the stigma. There are very few, I hate to use the term trailer trash parks. I think that maybe 15 or 20 years from now, a lot of the parks are going to be owned by really good operators who care about the communities. That’s what I hope happens. 

I think that the homes themselves are going to get so much better and that’s what I’m excited for because I’ve renovated so many of these 60s, 70s, 80s homes that are just falling apart. I think that over time, the product will get better and better. As we’re moving homes into the parks, they’re beautiful. 

Some of these homes, they’re great. I like the ones that even have porches on the front. Beautiful homes. I think the whole image is going to shift, and especially the younger generation who are less interested in owning things and more interested in experiences, I think we’ll see more people move back into them and it’s not like the stigma thing. 

Andrew: And embrace it. That’s interesting because there’s a park near here. I moved to Charlotte recently. It’s like those homes you’re talking about. They look like cabins, They have the front porch on them, it’s around a lake, and it’s beautiful. If it was just my wife and I, we could totally live in one of those, just travel a ton because it’s so affordable. It’d be at the lake every day, so great.

Kyle: I think the space is going to really change over the next 15–20, maybe less. We’re already seeing that. That’s what I’m thinking. 

Andrew: Have you attended the Frank and Dave Boot Camp?

Kyle: I have. I went to the 2016 one. I think it was in Texas, maybe? My memory is terrible. I might have actually gone twice. I’m trying to remember, but I know I went in 2016. 

Andrew: I feel that’s a prerequisite to come on the show, is that you’ve gone to the Frank and Dave Boot Camp, which I haven’t been to recently, but I did go a few times when I was just getting started. Tons of good information. 

Kyle: I’m still connected with some of the people I’ve met at those events. Are they still actually doing them? 

Andrew: I know that there’s a virtual one that Brandon sends out an email occasionally on, but I feel like the in-person would be way more valuable because of the networking. Like you said, my very first investor came from one of the boot camps. My first boot camp is where my first equity investor came from, which is crazy. 

Kyle: That’s where I need to go when I’m ready to start raising money. I need to go back and find some investors there. 

Andrew: I’m just saying that would be a good place to start because you do get the email list for all the attendees as well afterward. That’s pretty neat. 

Let’s talk about the biggest threat to mobile home park investing. What do you think that is, Kyle? 

Kyle: I’m not smart enough to have this conversation, but the whole rent control thing scares me. I have not done enough research to look at actual case studies, but I know that it sounds good in theory, but it’s not great. Like I was saying earlier, the good operators who are buying these parks have to have rents at a certain level to maintain the properties. 

I don’t think people understand that. That’s something that I didn’t understand early on. I got to keep his rent as low as possible. If you want people to be proud of the community that they are in, then you have to keep the income where it needs to be. I think rent control and the different regulations there could be interesting. I’m trying to think about what other threats there are. 

I think the beautiful thing about parks and why I love them more than storage is the whole supply-and-demand thing. I’m so nervous with some of my storage facilities when I see two facilities down the road popping up. With parks, I never once think about that. 

I don’t think there’s a threat in terms of another affordable housing really popping up next door. I think that we are, I don’t know the right word, but we’re protected there. 

Andrew: Let me run something by you just as another operator. There’s this new strategy that I’ve been utilizing where it’s like dynamic pricing, similar from storage, but in the mobile home parks where you can charge different tenants different lot rent amounts based on maybe it’s a corner lot. Maybe it has a better location. Maybe it’s right next to the dumpster. It would have a lower lot rent. 

Then incorporating a piece of that along with hey, this park that’s 71 lots and there are only 30 occupied right now. As we bring in new people, we charge them higher lot rent, but we sell the homes that we’re bringing in, which are typically used homes, below replacement costs, below what we have into them just to get somebody with maybe $5000 cash that will buy the home. 

The home’s probably on an RTO. We could sell it for $15,000 or $20,000 maybe. We sell it for $5000. Instead of the market lot rent of $350, we bring them in at $600 lot rent. Have you ever heard of that?

Kyle: That’s super interesting. I’ve not really thought about that because I don’t think I’ve ever heard of dynamic pricing or anything in the park industry. It’s common in storage or you buy an airplane ticket and that’s why you’re doing that. I will have to think about that. That’s smart. 

Andrew: Just thinking because that lot rent is so valuable when we go to get it appraised, we go to do any sale capital event. I’m just thinking of doing some different methods to try to get the lot rent higher faster without just going to legacy tenants that have been there forever and jacking their rents up $100.

No, I’m just talking about new tenants that move in, bringing them in at a higher rate that’s more closer to market or maybe even above market because we were able to give them such a good deal on the sale price of the home. 

Kyle: You know what? It’s something I need to think about. I actually am under contract on another, I think you might have mentioned the intro, a 95 unit and I’ll have I have quite a few spaces. I think I have 15 actual vacant spaces of that 95 unit, so I will be moving homes in. Lot rent in that park right now is on average $236. Market is at least $300.

I still have a really hard time going in there and ripping the bandaid off day one with up to market, but especially as I bring new homes into the community, I will definitely consider bumping that right up to where I think it should be day one.

Andrew: I’m talking about the value of an occupied lot. The value of an occupied lot paying $600 lot rent times 12 is $7200 a year in gross. Take away 35% or so for expenses and you’re at $4680. At a seven-cap, that one lot is worth $66,000 for $600 a month lot rent.

If you spent $15,000, or maybe it was $20,000 bringing a used home in, you sold the used home for $5000, and then you got $600 a month lot rent, you’re still winning in the end if you got the $600 a month lot rent. 

Kyle: Definitely. I think it’s smart.

Andrew: Something off the cusp, a little bit different, but let me ask you this. If you had to do something differently within your story, what would it be? Back to when you first started, what would you do differently knowing what you know now?

Kyle: I needed to prepare for this one. What would I do differently? I think honestly, probably this sounds dumb, but I just have more confidence in myself. I think it’s easy to sit on the sidelines and watch other guys hitting the ball, but I think you just got to start swinging. 

Obviously, I don’t want to make foolish choices, but that’s why you listen to guys like you or Ryan, but I think if I was able to change my story, I think I would try to go bigger faster, and just have the confidence that you’re going to figure it out.

There are a hundred other things I could throw in there. Then what I said earlier about maybe I slowed myself down with some purchases that just were too far gone and needed too much work. Maybe I’d focus on better assets.

Andrew: That’s good. Kyle, I’m really grateful that you came on the show. If any of our listeners would like to get a hold of you, what would be the best way for them to do so? 

Kyle: Probably LinkedIn. Just search Kyle Grimm. That’s probably the best place. I am rolling out a new website and everything, but I probably won’t drop that yet because I don’t know when this is going live, just check me out on LinkedIn. That’s probably the best place to find me. 

If you are about to close this down, I just want to say real quick, guys. Andrew is the real deal. He’s the guy who I was saying I’ve listened to all the podcasts. If you’re thinking about investing, invest with Andrew. Just a little off the record and he’s not paying me to say this. Andrew has given me so much free advice. I tried to pay him, but he refused. Andrew, you’re awesome. I appreciate it. You’ve helped a lot. 

Andrew: Thank you, man. Well, I believe in you. I know you’re doing big things and I’m proud of all the growth. Kyle’s one of the guys that actually do the things you tell him. You give him the guidance, he goes and does it, and it’s awesome to watch. So congrats to you as well on building your portfolio and this new 95 lots that are coming in. I know you’re going to do a great job with that deal. 

Kyle: Thanks. 

Andrew: One last thing before we log off, if you had an interested passive investor who was looking at investing in their first mobile home park deal, what would you tell them? 

Kyle: I think just pretty much what I already said before. Are they public? Can you find information on them? Try to figure out who they are as a person, talk to their investors. I think that looking at their past deals if they’ll share, like here are some of my records of what we’ve done. I think that’s really important. 

Andrew: That’s huge. Thanks again, Kyle, for coming on the show. I appreciate it, man.

Kyle: Thank you. 

Andrew: That’s it for today, folks. Reminder, if you got value out of this show, please leave us a review wherever you listen to your podcasts. Also check out my website, keelteam.com. I have a free ebook that I’m offering. It’s called the Top 20 things I’ve learned before investing in mobile home parks. It took me six months to write this ebook. Highly recommend it. Just put your email in on keelteam.com to get my free ebook. Thanks for tuning in.