Tim Kelly is an active duty Chief Petty Officer, in the United States Navy and has been serving his country for 14 years.

Now stationed on shore duty in Pensacola, Florida, he is fully pursuing his dream of owning and operating multi-family real estate and helping others realize their financial freedom goals!

Tim has been investing in real estate since 2011 where he purchased his first single family residence with the intention of forcing appreciation and flipping for a profit. That was also his first “house-hack,” and he quickly learned the benefits of long-term buy and hold real estate were much more aligned with his goals. 

Through analyzing hundreds of multi-family properties, Tim has built an incredible network of real estate professionals, owns, controls, or has directly been involved in over 1,000 income producing units and looks forward to acquiring 5,000 multi-family units within the next three years.

Ask Me Anything Quesitons:

  • How does operational risk compare from multifamily to MHP’s? Allison Weiss / LinkedIn
  • What is the best piece of advice you can give when things just don’t seem to workout as you planned them too? TJ Hines / LinkedIn
  • Why do you prefer MHP over all the other commercial RE? John Fortes & Dusten Hendrickson / LinkedIn
  • Can you use a VA loan from a spouse to cash-out refinance a primary residence under someone else’s name. I.E. loan is in my name, but we live in it together Brody James Oakes / FB
  • When we are talking large multifamily syndication (especially value add), there is always a very clear cut “exit strategy” with backup strategies as well. What are some of the exit strategies you have, or have seen others plan when buying mobile home parks? With the increased interest of late in this niche, I could see this helping but are you worried about what this might look like in 4-5 years and how do you continue to cultivate interested investors while not adding too much competition for yourself? Thank you in advance and a BIG THANK YOU for your service Sir. – Jeff Blue Harrison, San Antonio, TX / Facebook
  • How do you entice good Lonnie dealers into his parks / Andy Teasley FB
  • How to find a competent manager in a complete turnover park in a new market. In an almost vacant park where there’s not much of a pool to choose from. Then how to find local handy people and contractors. Mike Ray / FB

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Episode’s Raw Transcript

[00:00:02] Hey, what’s up, everybody?

[00:00:03] My name is Jay Helms and I’m the founder of this podcast, a movement known as the W2 Capitalist, today’s episode. It’s first timer for me.

[00:00:11] Actually, we’re doing an ask me anything and I say we because I’ve got my buddy and investing partner, Tim Kelly, on the line.

[00:00:20] Tim, what’s.

[00:00:23] So other than this intro, I’ve. But how do you the other day and then and then we get to play it off the prize. We talked about for five minutes. I had to go to where you were born in the base. And it dawned on me, that’s the most that we’ve spoken. And a couple months, unfortunately, that is accurate. Yeah. I mean, he’s like, I’m having babies or traveling the world or taking on a BPI. You guys are kicking ass and taking names. So I also saw you did a trip to Canada.

[00:01:02] Yeah, man, it was incredible. We went all over Canada, a couple different cities with a lot of fun. Awesome. So little insight here as we’re recording.

[00:01:14] This is the first time Tim and I have actually not talked about how we’re gonna do this, but I did post a letter. But now we’re gonna do this. Ask me anything episode on the Facebook group. And also on my LinkedIn page. So I’m getting used to LinkedIn, so I don’t really know the lingo there. But anyway, got several comments I probably should send you since you ahead of time.

[00:01:39] Anyway, we’ll dive into these.

[00:01:41] What? There’s like seven or eight questions here. We’ll go entomb. A lot of them are focused on mobile home parks. So it’s mainly gonna be you. So real quick. And Tim, I really don’t know this. I’m asking you straight up. What’s your portfolio like? That’s how I don’t know. That is is a little ridiculous.

[00:02:05] But yeah, I mean, I’ve been directly involved in raised capital for own or control, almost like a thousand units. Is this at this point?

[00:02:16] We just closed a couple with API capital. We just closed an eighty unit apartment community and then we’re about to close a seventy one part mobile home community this week.

[00:02:28] Well Soulsby, this week you might, might be delayed until next ironed all out. But yeah, just about a dip almost kind of like a different role and in every single one between just or you know, helped connect, you know, capital to the deal or you know, managing the asset or more, more or less hands on.

[00:02:55] So so. Yeah. And it’s been it’s. And it all happened within like less than the last three years maybe since I got here. I mean since you and I close out a farming community back in September of 2017. Yeah. That’s like basically since that point was a little over two years. Yeah that’s crazy. But but yeah before that it was like all a bunch of trying to figure out what I want to do and then narrowing it down and honing in on multi-family, then submitting a bunch of offers without like really know what the hell I was doing. And then and then bam all of sudden, you know, we connected.

[00:03:34] And then it was kind of like, you know, off to the races and there was the momentum.

[00:03:38] Yeah, it’s crazy to think of.

[00:03:43] I don’t know, it’s just weird to think because I was actually was a guest on Jake and Gino’s podcast this morning or night.

[00:03:51] I don’t know when this is going to come out, but they’re like, hey, what? What? They asked me the question, what project are you most excited about right now? And it stopped me. And if they don’t cut it out because it was pretty brutal, always like, you know, I really don’t know because I started out this year and I’m in self-reflection mode. Right. Because we’re here and this is a week before Thanksgiving and this is time of year. I usually just kind of sit back and say, okay, what do I really accomplish this year? We’re gonna need to focus next year and do this every year. And last year I came out of this self-reflection mode thinking, OK, not going to buy anything. This is in twenty nineteen. I’m not gonna buy anything. I’m not gonna sell anything. Not gonna do anything. I’m just gonna sit back, see what the market does, stacks and cash and just be patient. And the wife came up as is Jake introduced me as he’s got forty nine units bubble born. I was like, wait a minute, where’d you get that in focus? I think it was like, so here’s the thing. We as where I was in January now where I’m at three hundred and twenty three, most of it limited partnership. But it’s it’s just wild how things change and things are. It’s amazing. I’m like a box mailbox money.

[00:05:09] Yeah. Yeah. I want to know more about the Elfie deals that you decided to invest in.

[00:05:15] Yeah. So we can I mean we could talk about that off line. Let’s dive into it. But but yeah.

[00:05:22] Let’s talk about off-line today. We’re here for the people. Yeah, we got OSU. We’ll see how much time we have, but we’ve got like seven or eight questions and then we booked an hour. I don’t think it’s gonna take that long. But the reason why texting is that, hey man, can we start early? Because I guess he’s got the kids out of the house. So it’s kind of cool. Yeah. So if you’re screaming pterodactyls in a minute. Yeah. My means my time is gonna be very limited, no doubt. Let’s dive in. Let’s do it. So the first question comes from Allison Wises is a Linked-In post question that says, How does operational risk compare for a mortal family to mobile home parks? And I don’t necessarily know if I understand what she’s asking there, do you?

[00:06:07] Oh, yeah. So check it out. Like the main thing is when your apartment community you own the dwelling, the structures, the all the doors, the whole building, the land, you know, everything that’s directly associated with the property.

[00:06:22] Everything. And so with that, you own more you have more expenses, more overhead.

[00:06:31] Not really comparable amount of income growth, but you have more liability, more risk. Right. But mobile home communities a lot of times and most owners are there. Their goal is to have one hundred percent tenant owned homes. One hundred percent. Right. So you’re just on all the ground and you have a hundred mobile homes that are all owned by the tenant.

[00:06:55] They’re paying taxes, insurance, maintenance, repairs. You don’t capture the amount of appreciation or you can’t depreciate all that on your taxes. But a lot less risk, a lot more liability on the tenants. But it’s almost like a win win because a lot of those tenants want to become homeowners and you’re giving them the opportunity to be a homeowner. Yeah, with that comes responsibility. But that is a morale booster. And mobile home community.

[00:07:21] So I think that’s my initial how I will initially interpret that question. Yes. Actually, there’s actually less risk in a mobile home community if it’s obviously manage.

[00:07:34] Right.

[00:07:35] If you if you buy it properly and you put the right financing on it, you have the opportunity to have a lot less risk and have that liability and that risk shifted to the owners of the home. And a lot of times it’s mostly going to be tenant owned homes, but sometimes. So there’s a lot of owners that want to own mobile home park owners that want to own the homes because there is more rent income, unfortunately not capitalized.

[00:08:01] All right. But a lot of times you have more revenue if you have good systems in place to for all the transactions of maintenance or repairs.

[00:08:10] There is more growth for total and a lie. That’s hopefully the answer to the question. I think that’s maybe what she was talking about. But do you think what you think? Yes.

[00:08:20] In the way you phrased your answer, it helps me understand the question. And I think it hit the nail on the head. Is that from an operational standpoint, if you just own the dirt. I mean, what risk is there? Right. There’s all infrastructure. Yeah. I mean, you’re when you’re in a sewer.

[00:08:36] But. And I know when we’ve looked at mobile home parks before together, we were always focused on city water and city sewer with individual meters. But most mobile home parks are not going to be that way. They’re potentially going to be on pump water or or septic septic for their sewer or a well for water.

[00:08:58] Well, water I a pump.

[00:09:01] Well, it is a pump, essentially a waste water treatment plant, you know, for sewer. But yeah. Best case scenario, city, water, city, sewer are individually metered. Same thing.

[00:09:12] Logical individual pedestals, direct bill to the city. And obviously, when the tenant is paying for their own utilities, total consumption will be at least 30 percent less. Consumption hands down because they’re not going to wash their car every day and they’re not going to let the water run. If there’s a toilet flapper that’s broken because they’re like, oh, crap, I got to pay for this water. Let me figure this out.

[00:09:38] Let me not wash my car every every week or every day. Let the water run. So, yeah, we always foster conversation or conservation in our parks and tenant tenant owned homes is always the best with city water cities or individually made it direct.

[00:09:53] I’m trying to figure out how I can charge my kids water consumption.

[00:10:02] You have a rubber spreadsheet, right? It’s built back to that. I’m sure you’re right there. There occupying. How many showers? The age of tank or I.M.F. tagging?

[00:10:13] It’s all it’s just it’s our water bill is not that high. But this is one of those IT expense when I look at it, I’m white. That’s $50 dollars higher than it should be. It really is, if we would just turn the and that now I’m not jumping around. It’s not a big deal. But I’d like to ask a question number two. It’s another linked in post. This is from T.J. Hines. He’s in that group that we did the 10 day CRT challenge with.

[00:10:43] He asks, what is the best piece of advice you can give when things just don’t seem to work out as you plan them to? And that is a really good question. Easy.

[00:10:56] I mean, I want to hear your answer, man.

[00:10:59] So you honestly, you just gotta keep pushing through it. Right. And you can go somewhere. I wondered. I wish I would ask, T.J. for clarification on this.

[00:11:12] Does he mean mobile home? Does he mean more to families or something specific in a more tight family?

[00:11:17] You know, my advice is you got to adapt. You got a adjust and adapt. Right.

[00:11:25] What he wants, even if it’s more just a general question, this is really good to talk about.

[00:11:32] For anybody, whether you’re an investor or whether you’re in corporate America or whether you’re in the military or whatever you do, you have to understand there are going to be bad days.

[00:11:42] It is part of the process to have a bad day. If you’re if you’re not waking up one day, just not feeling motivated. Not as for not. But there’s something wrong. OK. So you have to expect a law of averages. You go through a bunch of days, you’re gonna have a bad day and you just have to understand a part of the process and be the better your morning routine is and the better group of people that you’re surrounding yourself with, the less you’re gonna have it. I don’t like I don’t really remember the last time I had that day, that type of day. I think it’s because I’m always delivering value to other people. Like obviously with ADP, I tell you, is help people and deliver value to others. So, you know, but I have a morning routine. I’m waking up really early. I have a routine I’m always mind treating with inspirational, positive motivational type stuff as well as always growing everyday as a person. And there’s always there’s so much to accomplish. So understanding. It’s part of the process, whether you’re in business or you’re not, you’re gonna have a bad day. But like during those, that is knowing. OK, cool.

[00:12:46] It is what it is. I’m not going to let it completely stifle my day or my productivity. I was like, OK. As one of those days, it is whatever. Let me reshift and figure out what’s going to help get me to that level. And usually it’s by calling somebody or talking to somebody like a conversation like this and making sure you are surrounding yourself with people that are engines who are taking you up to the next level. Will not anchors that are holding you down and be like, oh, it’s OK. Well, you know, being the negative person and the negative influence, because a lot of people misery loves company and men and they’re to kind of weep with you. And they’re gonna they’re gonna if you’re saying woe is me and you have that victim mentality, they’re gonna make up excuses with you. You need those people that are going to call you out and say, hey, you stop making excuses. You need to figure it out and, you know, like repair it and get to the next level and just keep moving forward. Period. That’s it.

[00:13:37] Yeah. And T.J., what I would say is that Tim’s right there. You know, your morning routine. I’m the same way as Tim. I get up pretty early.

[00:13:47] The reason I do that is because I know I’m going to have a couple of hours of uninterrupted time where I can focus on whatever it is I want to focus on. Usually it’s real estate investing stuff, right? It could be podcast. It could be something with the Facebook group where you got some of the questions or looking at deals, which has been few and far between here recently for me. But, you know, it’s it’s and I adopted that. It’s a combination of how A-Rod’s boat and AMERICAN MORNING, but also the one thing by Jay Cabazon and Jay Pettersen and Gary Keller. Yeah. So, you know, I kind of focus on the one thing in the morning when I get up, I’ve got my list of real estate stuff to do. I know if I knock that out and it’s been a couple of hours being extremely passionate, doing something I’m extremely passionate about my entire day is on a different course than it is if I sleep in his snooze. And and I’m like you, Tim. I’m trying to remember now there’s times when I get frustrated, but I’m trying to remember the last time where I had like a bad day. Yeah. And I don’t remember that.

[00:14:55] You get you give a lot you give a lot of your time. Do you have a whole entire community that you are inspiring, that you are training, that you are educating?

[00:15:04] You built this amazing community. And it’s just the more you give in and value, the more you’ll receive in abundance. And I truly believe that. And I think it’s because we don’t really worry about ourselves. We’re worried about helping other people. And if you kind of consider yourself a lot and you’re like, oh, I don’t feel right or this doesn’t feel right or I you know, woe is me, whatever, then that’s total. That is where the law of averages is really going to kind of be disadvantageous for you. You’re going to feel bad things happen to you if you’re always worried about you.

[00:15:42] You ever been around somebody consistently that has the victim mindset? Didn’t matter what happened. They’re always the victim.

[00:15:52] Been around someone like that where we’re surrounded by. I mean, there is it’s so depressing. Ran I had to get away from those people quick. It’s just so. Yeah. The thing is like we’re able to recognize that. And like, I have feel like I have a duty or obligation to call them out and and maybe help them with the paradigm shift. And I do, actually. One of my my still active duty and I’m training junior officers, the officer to pilot students are I’m instructing pilot students as they’re going through the pipeline. And I have an ethics class that I teach them about leadership. And I use that to talk about professional development and mindset and personal development. Like especially in the military. You can not have that victim mentality at all. If you do, you need to stop because no one cares. You know, you get better. No one no one cares. That’s a little bit different. No one cares. Work harder. That’s a period like. And so. So, yeah, we’re all we’re surrounded by them, especially, you know, if we still have a W-2 job.

[00:16:53] People who are stuck in that scarcely W2 mindset, they’re gonna have that woe is me mentality, that scarcity non-growth mindset. And you either like I said, I have an obligation. Sometimes I feel like I’m wasting my time if I try to help, help them understand this. I think a lot of people are not going to change.

[00:17:11] But but yeah, those are not the people that I choose to hang out. I’m only hanging out them because I’m I still write right now for the next like ten months I’ll I’ll have I’ll be employed and then I’ll then I’ll be unemployed. You’re going to exit that way or is it a bunch of rabbits here which I knew would.

[00:17:32] Afrique is weird. Yeah I know that.

[00:17:34] Yeah. Well which by the way we hung out and I have a scarcity mindset. I’m a negative person. I’m joking.

[00:17:41] Now I feel bad because I’ve been passing your house almost like once a week. Alison’s dad bought a house in Navar. Don’t tell me that. So we go past Tiger Point like at least a couple of times a month.

[00:17:53] You know, I mean, it’s no worries. We’re probably not here anyway. It’s the scheduling. I mean, I took off today from work.

[00:18:00] Just a record podcast because it’s been like that. Yeah. And I need a little break skin close to the holidays. Yeah. Yeah. You’re my fourth one to do today. So who’s making the most of it? But other than that, you know, we’re not here. Kesey’s usually out with the kids doing something. She’s keeping them busy. They’re all keeping us busy. So but take a chance. Maybe knock on the door. I’ll get in trouble because I didn’t give any warning.

[00:18:29] And the house is probably going to be a wreck.

[00:18:33] I’ll always give you the courtesy call. Okay, I’m five minutes away. What are you doing?

[00:18:39] Oh, man. All right. So listless. Get back on track here. This one comes from two to four people.

[00:18:47] They ask that in a similar can be when you’re going to have to handle. But for people, John Foretells, which he has an awesome podcast and does Dustin Hendrickson. Sorry.

[00:18:58] Dustin, the question is, why do you prefer mobile home parks over all the other commercial real estate?

[00:19:06] And I’m throwing that one to you because I don’t prefer mobile home parks to other commercial, at least not yet.

[00:19:14] Right. Yeah.

[00:19:16] So there is you know, most people, whether they realize it or not, there is a affordable housing crisis that that we have been facing for a very long time. And, you know, I think last year I read the statistic.

[00:19:35] You know, for every ten people right now in America that need affordable housing, only two point five of them are having it provided to them.

[00:19:43] There is just not enough clean, safe, functional, affordable housing for the workforce and affordable housing, working class. Right.

[00:19:54] So, number one, mobile home, mobile homes are the most of time the most affordable type of housing, whether you own your home.

[00:20:06] Or not, let’s say even if you’re paying a lot rent plus unit rent, that’s still going to be more than the average rent stamp like a percent. The average rent right now in in America for the apartment communities are over a thousand bucks a month. The average lot rent right now across America from mobile home for mobile home parks is less than three hundred dollars a month. So a lot of times, obviously, they own their own home. It’s already paid off whether they’re on a lease option. So maybe they might still have like a few mortgage payments or let lease purchase option or rent option contract that they’re still paying on, whether it’s two, three, four, even five hundred hours a month. Right. And then that will be done in two or three years. But then there are lot rent. Three hundred bucks a month is all that there are monthly obligation is going to be last. Obviously they’re living. There are other utilities, their water use, their electricity and stuff like that.

[00:21:05] So, number one, there’s no more affordable, more affordable type of housing available today. And those lot rents right there are only going up. So many people drove into this niche because so many moms and pops have own these mobile home parks over time and have literally been afraid to raise the lot rents with fear of increased vacancy.

[00:21:29] So there’s so much upside with that lot rent. And we all like added value. Right. A lot of people want to go into multifamily because they want to reposition an asset that requires added value, that requires value add or that has value add opportunities. So lot rents are only going up. OK. And, you know, there there’s there is an amazing amount of people out there that baby boomers and millennials that are recognizing that this affordable housing is available. And it’s not the stigma that, you know, trailer park boys, an 8 mile gives mobile home parks is simply untrue. Like if you look back, the history of mobile home parks, when mobile homes were actually first introduced into America, only the most wealthy people own them because they were able to afford to to pretty much like have a truck that will tow their mobile home from place to place, the places they go travel the world. Right. And then like Elvis Presley and Dolly Parton, like all these celebrities, lived in mobile home parks back in the day, in the 50s and 60s. And then like the lot, rent wasn’t going up. Right. So then they realized people realize they kind of just came in there and then it was just affordable housing. And then, you know, people were not increasing the community and improving the community. So then obviously lot of the class that lived in there got lower and lower, lower.

[00:23:02] And now they are where they work today. And but more people, baby boomers and millennials are realizing, I don’t need a huge house right. For me and my family. I only want a affordable housing. It’s as big as I need it. Like tiny homes. It’s almost you know, a lot of mobile home parks are a mix of mobile homes, tiny homes and ARV’s. And that’s the best one of the best ratios that have depending on the market, of course. But yeah, I mean, there’s no more. There’s so many baby boomers and millennials that are looking at it as a as a as a decent form of housing. There’s no more. It doesn’t get any more affordable than that lot. Rents only going up and there’s just less. There’s a barrier of entry. So less investors are looking at this class because of the stigma. So there’s less investor competition in the multi-family niche. And are the best cap rates. Hands down. That’s the only reason why I think you and I started looking at them. Because when were looking at apartment complexes like, well, shit, six cap is all I can get or maybe seven cap if I’m lucky, but there’s still 10 caps out there available and mobile home parks in the right markets.

[00:24:07] Guys are funded now and within your. Yes, sir. Search. Yep. Yep.

[00:24:15] So those I mean those are some of the advantages I could keep going, but I want to.

[00:24:21] Yeah, that sounds like a topic you’re pretty passionate about.

[00:24:24] Mean, think about like all the reasons why people get into real estate and get involved and they want passive income. They want.

[00:24:30] They want capital. They they want to you know, there’s a lot of misconceptions about about about the mobile home park space. And you could really just literally own just the ground and have no liability. But people are paying you lot rent with almost no overhead at all. You got to do is make sure that the landscaping is upkeep. Right. That the grass is getting cut or the snow is getting shoveled. That the signage is nice and presentable. When you go to the park at the mailbox, structures are on point. They’re safe. They’re clean. And that those lighting. Right. And the trees are not overgrown. So it’s like the infrastructure and that community is it.

[00:25:05] But if you buy a city water city sewer and and you understand how the utilities work and with the material, the lines are in and what’s a really look out for during your diligence, there is just incredible upside.

[00:25:18] And yeah.

[00:25:19] And to introduce you to Gabriel Hamo, do you know him? Doesn’t doesn’t ring a bell. Somebody just literally just hung up with him. When I text you earlier said, hey, man, I had this conventional. But he’s in Oregon.

[00:25:35] He’s he’s focused on mobile home parks as well. So be somebody you can tap into. But oh, be happy to do the intro for you. All right. So next question. This is going to have to be you to when you understand what’s I read it. This comes from Brody Oak’s, who is a member of the Debbie to Catalist mastermind. But Brody, ask, can you use a V.A. loan from a spouse to cash out? Let me back up before I answer this. And the disclaimer for any question that we’ve answered, it’s probably best to be answered by your attorney or your CPA. Tim and I are neither one of those rights is our opinion. Oh, yeah. I just made the legal team happy but can use. This is from Brody. Can you use a V.A. loan from a spouse to cash out, refinance a primary residence under someone else’s name? For example, the loan is in his name only, but they live in it together.

[00:26:41] Hmm.

[00:26:42] So I guess my first question is, is the spouse active duty? Does he or she won’t?

[00:26:50] I mean, they they don’t have the V.A. loan entitlement. I don’t think they are. I know Brody somewhat. I don’t think neither one of them’s active duty currently. Yeah. So if.

[00:27:01] Yeah, the vet, only the veteran is gonna have that V.A. loan entitlement and so.

[00:27:08] Are they able to refinance their primary home using the spouse’s V.A. loan?

[00:27:17] A spouse doesn’t have an entitlement, period.

[00:27:21] I mean, my biggest recommendation is, you know, if you’re not already a part of the active duty passive income Facebook group, that’s over six thousand people now. And it’s just a bunch of vets, active duty spouses, you know, that are just hanging out all into into investing.

[00:27:41] And if you’re not part of that community, you really need to be if you’re military affiliated. Drop that question in there and you’ll get you’ll get bombarded with with answers.

[00:27:52] And so so, yeah, I’d say I mean, I’m I’m still plugging the active duty passive income community, but. Sure, sure. You know, we have a free book right now. It’s a bestselling book. It’s free on our Web site. We have a podcast that we’ve interviewed Robert Kiyosaki, Tom Wheelwright, Garrett Sutton, Grant Cardone, Alannah Cardona, Jacko Willink. You know, we just interviewed all these people over the last six months.

[00:28:15] And then we also interview people who are like new investors who are active duty, whether there are 0 1 0 2 4 5 that are closing on their first primary or their first investment property for some inspiration, because those stories are just as special. And yet we already have. We also have a coalition of real estate agents from East Coast, the West Coast that are the cream of the crop. Agents that are 80 get certified that have an investor mindset.

[00:28:43] We have our own mortgage brokerage and our own mortgage branch. So we’re able to fund your B.A. loans and fund your investment loans for you. That where we could offer better rates than the typical financial institutions because there’s no middlemen and not a bunch of people need to get paid. So we’re offering the lowest rates and we also have an insurance company for whole life insurance policies for those advanced investors. And so definitely if you’re not part of that community and you’re anywhere affiliated with the military, get involved. All kinds of free stuff. We have a couple of free e-books. Facebook page are our best selling book is free. It’s had to plug gaps and people are listening or not yet.

[00:29:20] And now I’ll make sure I put a link in there to active duty passive income dot com. Right. But yeah, I think Brody kind of stumped us on that one. Right. So we don’t I don’t know. I hope it will be a buy. Tim said in a post that question in the group.

[00:29:39] I’d also recommend finding a V a loan, someone who specifies MBA loans and to them as well.

[00:29:48] Howard. And that if you could remember, his name is Jason Wood. He’s our preferred V lender.

[00:29:53] He’s actually part of the ADP team. His name is Jason Wood. Hit him, hit him up or, you know, shoot him. DMI on Facebook. But like I said it and that’s I’m understanding the question wrong. The spouse does not have her his own V.A. loan entitlement. But you could refinance with with using your vehicle on entitlement. But if you’d like to refinance out of the V.A. loan and put an investment on it so they could use their villalon entitlement to go purchase and other 3:51 unit property.

[00:30:25] Yeah, I will. Actually, we have our master my call tonight and I’ll probably see Brody then mention all this to him.

[00:30:35] So we need to master my call night to our. Tuesday is a popular night for that. No. Monday Night Football.

[00:30:42] All right. All right. So next question. This comes from Jeff Blue Harrison, which I love.

[00:30:50] His name’s Blue, but boy, from Facebook, it’s pretty long.

[00:30:57] So bear with me as I get through this, as is when we’re talking large multi-family syndication, especially value add. There’s always a very clear cut exit strategy with backup strategies as well. Very good of you there, Blue. What are some of the exit strategies you have or have seen others plan when buying mobile home parks?

[00:31:21] Yeah, we’ll go with that one then then I’ll ask the second part to his question here. What kind of exit strategies do you guys have?

[00:31:29] As far as your own, your mobile home parks indications there’s really not a big difference that when you’re one, you’re looking at a five to seven year hold for value as an apartment communities.

[00:31:40] The mobile home parks indications are going to be almost exactly the same structure.

[00:31:46] Every single deal is different. You know, a lot of the projections, you know, will depend on your invested capital and what kind of your investors, the relationships you have with your investors, what their goals are. Do they want to put their money in something for five to seven years? Sometimes it might be a 10 year hold, but a lot of those five to seven year holds could be reposition within two years or less or maybe three years or four years. But the projection is usually I love this is gonna be your anticipated return. This is our plan. We plan on getting a reposition done in this amount of time. But in most cases, that reposition has done a lot quicker to cash out the investors and to reposition it, whether to sell it or refinancing it based.

[00:32:31] But if you if you’re familiar with the syndication on a multifamily apartment community, there’s really no difference on syndication on a mobile home park except better returns.

[00:32:44] I like it. Yeah. And also it’s that I love that Jeff said something about having multiple exit strategies. I think it’s hugely important for that. What it is I mean, you can speak. You spoke to that very positively and very confidently. I don’t know what a mobile home park exit strategy. I can imagine. I kind of lump all those up in the same commercial real estate type niche except for better returns, as Tim said, on the mobile home park communities.

[00:33:13] But, you know, you’re going to look at somewhere from a five year, no long, no longer than five years to return the initial investment.

[00:33:21] And then after that, it’s up to the asset management team. Right. What’s the.

[00:33:29] Yeah, exactly. I’d say that we’re in the process of selling Oak Creek Estates. No. In Criolla. Yeah. Yeah. We’re getting the sell, baby. Talk about less than five years. That’s right. Man, that was a little bit over a year. A little bit over a year.

[00:33:46] Nice. Let me get to Jeff’s second part of just question. This is with the increased interest of late in this niche. So mobile home parks, I could see this. I think I can see having multiple exit strategies helping. But are you worried about what this might look like in four or five years? And how do you continue to cultivate interest investors while not adding too much competition for yourself? Thank you in advance and a big thank you for your service, sir. Great question. How do you cultivate interest without creating competition for yourself?

[00:34:26] That is why I appreciate that. Can you do that enough and.

[00:34:32] And so.

[00:34:34] It’s you know, that I think that is kind of blurring the lines of having a scarcity mindset.

[00:34:41] You know, other than that, I mean, you gotta understand, there’s so much capital out there. There are so many people.

[00:34:52] That are not actively investing, that want to invest, that don’t have time, but have tons of capital sitting in c.D, their i._r._a checking accounts, savings account or TSB.

[00:35:04] They are literally waiting for you to approach them with an investment opportunity.

[00:35:10] And so that is an excuse.

[00:35:14] And you have to understand that’s an excuse that’s only stopping you from moving forward and creating a great opportunity for people. I mean, straight up, I think that’s kind of selfish.

[00:35:25] You don’t offer people an opportunity, but you’re you have this fear from the unknown that is stopping you and you’re not able to help other people grow their wealth.

[00:35:38] Selfish. I see where he’s coming from, though. I can see where he’s coming from, but I think you hit the nail on the head. I think it’s you know, if you’re scared of of creating too much competition for yourself, then you will be on an island pretty soon. All by yourself.

[00:35:55] Yeah. And so I’m trying to understand, maybe I misunderstood the question when he said creating competition for myself.

[00:36:02] How do you interpret that?

[00:36:04] So I look at it as if, you know, as we’ve gone out and I’m not as good at this as you are, but you go out and you try to stir up interest for investors to get on board in the mobile home or mobile home park community or multi-family community and eventually start going to start clicking with some folks like, well, I could do this deal with Tim or I could go after my own deal or maybe go off some of the same deals as doom and try to get a little bit bigger piece of the pie.

[00:36:33] So I get what do you say in but in the end, if that were to happen, I don’t know that I want to be partners with that person anyway. No, not at all.

[00:36:43] And I mean, again. So I did understand it. Right. Stand firm with my response. Be an answer. You mean you would not be doing this if we had that same mindset? You wouldn’t be sharing with other people. This is how we we failed. We don’t want you to fail. So do this. This is why we just we are we created this multi family academy in API. We have a residential investing course and a multifamily investing course that’s 20 modules long. And this multifamily investment course is to teach other people how to invest. And we’re giving them our secrets and how we’re doing, what we’re doing, how we’re raising capital, how we’re structuring our syndications, how we build relationships with S.E.C. attorneys and then insurance agents. And I have a whole entire module based on mobile home parks. And we’re giving people the tools for success. There is so many deals out there. There’s so many opportunities out there. There’s so much money out there. You can not have that mindset.

[00:37:45] Otherwise, you’ll never going to move forward to make mega-deal. You need to just drop that mindset. Surround yourself with different people.

[00:37:50] Yeah. Drew with. What do you guys deal with? LAUNEY Dealers. I know that’s mobile home specific lending, right?

[00:38:01] I’ve never I’m very unfamiliar with that. I don’t know what that is or if it’s tailored to my loan. Parks never had any interaction with the Lonni dealers.

[00:38:11] Yes. I think I haven’t either. But I believe it was something that was. Well, someone is going to wrap it up saying, I don’t have any expertise in that or experience. Neither do you. So Andy Teasley from from the Facebook group sorry, buddy, you stumped us as well.

[00:38:33] Great question. I want to assume. I don’t want to go too deep in this. And just in case I’m totally off here. But there’s a couple there. There’s a while.

[00:38:41] There’s a handful of different ways that you can put homes in a park and there’s different dealers. There’s a 21st century mortgage offers really, really, really good financing to residents for new homes. And then there’s also dealers who supply slightly use mobile homes. And so if he’s talking about like dealers for to get more homes into parks, I’ve never had any interaction with the Lonni dealers. But there’s a couple pretty good dealers out there like Clayton Homes is obviously a manufacturer and a dealer that’s obviously owned by Warren Buffett. That’s one of his companies, not Berkshire Hathaway, Warren Buffett. And he knows Clayton Hobbs. And Clayton Holmes has really good, really good financing and programs in place not only for not only for the residents out, but for their own mobile home park operators to put a handful of homes in their park. Literally no payments for 12 months until they can get a tenant in place. And then they just do a direct program with the tenant. So but Lonnie dealers, I don’t know. A lot of dealers are, to be honest with you.

[00:39:47] Yeah. We’ll have to do some research and get back on that. Yeah, sure. I’m interested to know what he’s talking about. And then the last question.

[00:39:56] This comes from Mike Ray in the Facebook group. How do you how how do you find there’s two parts to this? How do you want to just delete it? How do you find a competent manager in a complete turnover park in a new market?

[00:40:15] When the park is almost vacant.

[00:40:20] Massow that’s probably one of the trickier components of mobile home parks is is management, and each deal is so unique.

[00:40:31] If you’re under. One hundred pads, you’re going to probably have to get creative if you’re under.

[00:40:40] 70 pad’s you will have to get creative. And what I mean is that you won’t be able to hire a firm like that. A property management company or a third party firm to handle everything for you. And there are some firms out there that wells pretty much just like an apartment community manage the tenants and they’ll also manage the repossession, all known as the rehab and stuff like that.

[00:41:07] There are only a few credible ones in the mobile and park space that I’ve interacted with come into contact with that I’m aware of.

[00:41:14] But if you’re saying in a new market, meaning you probably don’t know the market or don’t have the relations with people in the markets can be difficult with a major reposition. You should probably not go after that, especially if it’s your first deal. That’s just my recommendation.

[00:41:32] Unless you have subject matter experts in that market who are your partners, who are boots on the ground, who are already have operated, who are currently operating, or who have a great deal of knowledge or a great network of mobile home park operators, asset managers.

[00:41:50] If you’re trying to go after a deal that’s in a market you don’t know and it’s a major reposition.

[00:41:55] It’s probably not going to be for you.

[00:41:57] It’s going to be for people who are already established and have a network or institutional investors who could afford it just put a lot of cash into their deals because they have a much lower cost of capital.

[00:42:06] Yeah. And his follow up question, I think your answer is going to be very similar, but how do you find local handy people and contractors for that same new market park? And I think you hit the nail on the head. You build a relationship. Can you possibly partner with somebody who’s already in that market on that deal? I would also recommend staying away from a future first one.

[00:42:30] Yeah. I mean, it’s it’s a matter of like really going to the other park, seeing who is seeing how the other parks are being managed. Talk to the other operators in that area.

[00:42:41] Build relationships with people in the mobile home park space. Get involved with your mobile home park associate, the Mobile Home Association.

[00:42:48] I imagine MHRA in your state, that is where all your answers are gonna be.

[00:42:53] That is where you can network. That is where people are focused on the mobile home park niche and they could help you pretty much figure out whatever you with whatever you’re doing. Because every single every single deal is so unique, you know.

[00:43:09] And if you have to understand your market, you have to understand what you’re getting into. You have to understand the infrastructure. You have to understand how the infrastructure works, especially if it’s not city, water, city, sewer or septic tanks, or if it’s a lagoon or if it’s a waste water treatment plant.

[00:43:24] You have to understand how they operate and what the condition and how old they are. You got to understand a different gene like, you know, schedule 40 PBS, schedule 20 p.p.s., schedule 80 PPC or Orangeburg Orenburg is just like a paper like super thin schedule 20 TVC literally breaks or call a thin walled a line, you know, and that just what is rupture.

[00:43:50] And it’s like it’s crazy that they’ve even gotten away with that. They should never have been up to code. But you’ve got to understand really the condition.

[00:43:59] And you know that there’s companies out there that could sculpt the lines like American lead detection. They could sculpt the water and sewer lines for you. You got to understand that the tree roots could definitely just game between the sewer lines and take over and and cause the lines to crack. And a lot of newer investors, if you don’t have the people in the market, if you don’t have this knowledge, you’re just taking a huge risk.

[00:44:23] That’s where it might be even more risky to get on in Mobile in Pakistan than other assets. If you just kind of go in there blind without the right network for an hour.

[00:44:33] So he didn’t ask specifically asked specifically about a mobile home park. But I will give him some advice on the multi-family side.

[00:44:41] You know, with our central square, you know, that property, we had trouble finding a property manager to take over. We went through to until we found Crystal Crisman do an amazing job. And she has lived in this city literally her entire life and she has all those connections. So speak specifically to what you’re talking about.

[00:45:00] This is not a my Walmart, but it is a multifamily asset and very similar. There’s a new market for us, but for her, she’s been their entire life.

[00:45:09] So that also drove home. Well, you know. Moving forward will never pass us up during due diligence.

[00:45:16] Always build a relationship with key people at city hall before you close. Right. Especially for a mobile home park.

[00:45:26] You know, there’s a really good like Creole. There’s a really good chance that the other mobile home park owners in that area are slumlords and they inherit bad tenants.

[00:45:36] So if you go in there and you don’t brief city hall and talk to. Economic development and the inspector and the zoning and planning and maybe the fire marshal, right. Those are key people you need to have relations with. If you’re not doing that and you close on it and you buy it, they might assume you’re just another one of those slumlords. So they’re not going to take you seriously. They’re not going to help you because you need them. You need them neither assistance to help you and also to help you evict the wrong tenants, maybe find a good property manager or maybe let you know when.

[00:46:08] Hey, this mobile home parks about to be completely redone. You’re about to have a great a bunch of great tenants looking for a space. I notice you have 20 vacant pads. You know, if you have the relationship, they’re going to let you know, hey, check it out. You know, this is going to help you make the best of your investment, essentially.

[00:46:27] You know, most people here are kind of, you know, unpaid marketers, right? Yeah. So they really have nothing to gain except improvement for their city, which an elected official, Krista, now are now a property manager.

[00:46:41] She is the economic development rep city. And we didn’t even know that she was in real estate or an agent or a property manager until we kind of got nowhere. And she knew that we were struggling and looking for a manager. And then all of a sudden, bam.

[00:46:57] You know, but if we already built that relationship with her, that saved us all a lot of headaches and a lot of money. So then I learned.

[00:47:05] What lesson learned? Rushmore. Yeah. Yeah. All right. Mr. Tim Kelly. That is it for this round. I hope we get to do this again pretty soon. Actually, it’s a lot of fun.

[00:47:15] Hope is not a good strategy. Let’s just make it happen.

[00:47:20] Maybe we do. What’s a quarter? We could talk about them all. Man, I’m tired of like once a week. You know how hard he was, Jay. I’ll make time for you, man.

[00:47:31] I’ll make time for you, man. All right. Let’s make it happen. But in the meantime, let everybody know how they can reach out to you.

[00:47:40] Yeah, any time. Please don’t ever hesitate. Spend a lot of time on LinkedIn at the Timothy Kelly, lot of time on Facebook, especially in the active duty passive income community. And then obviously, we have a multifamily mastermind, Facebook, Facebook group and then Instagram at the Timothy Kelly. And then my main Web site with all my shenanigans is the Timothy Kelly dot com, the Timothy Yelly dot com.

[00:48:06] And so, you know, I’m also also because you guys are are listening to Jay and I’m going to give you my cell phone number, because every time I’m on a podcast, I do this and it’s always, you know, ended it resulted in good thing. So, yeah, you can even just give me a call or show me tax at 8 4 7 9 1 0 9 1 6 1. Anybody who calls me or whatever, I will literally just sit and talk to you for 30 minutes and you could pick my brain. What I want, I could. I’ll also do coaching outside of active duty, passive income and outside of the Navy. And I also coach people who are trying to get figure out the whole real estate investing game and trying to get through some maybe mental blocks and just create a better life for themselves. So I’ll give you a free 30 minute strategy session. And I distribute texting me. Call me. Let’s get to know each other.

[00:48:53] I was wondering if you’re going to give out your cell phone again.

[00:48:57] Well, enough if I do that. Bigger pockets. I mean, why wouldn’t I do it on? Ask me anything, man. I’d say that’s true.

[00:49:04] That’s true. That’s true. All right, buddy. Until next time, I will talk to you soon then.

[00:49:09] And for sure that.

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