Transcription
Another deal, or I miss another opportunity investing wise, and I called my I went outside. I called my boss up for my job. I was like, "Hey, I appreciate, you know, you helping me and getting me to where I am. Um, but I can't keep doing this. I have this other thing that I've been doing, and if I don't pursue this now, I'm going to regret it for the rest of my life."
>> Welcome everybody to the Mobile Home Investing Lessons podcast. I am John Pedro. I'm sitting here with active mobile home investor and multiple asset class investor Carl. Carl, thank you for being here.
>> Thanks, John. It's great to be here.
>> This is so cool.
>> We were talking before the the video, and I forgot that we've known each other. You got we had started almost four years ago or so when you were starting to, you know, invest. Catch, I guess, in that four years' time, if you could catch people up with, like, give us some credibility. Catch us up on four years in, like, you know, 30 seconds. Why should people listen to you? What have you done? And then we'll kind of deep dive into some of that stuff. But yeah, in the last four years, what have, what have you since you got started with real estate, you know, what have you, what what have you been doing?
>> Yeah, so I guess to give a quick synopsis on my journey and story. Um, so I'm I'm also a pharmacist, and I started investing in pharmacy school, which was I graduated in 2022, so it hasn't been that long. Um, two years into pharmacy school, you know, I I reached out, met John, uh, educated myself about mobile homes and other different asset classes and decided to start there. Um, I I went out door knocking, putting up signs, and everything. Found my first couple of deals and was able to find more deals I could handle at the time. And
>> Door knocking houses or mobile homes?
>> Mobile homes. So, yeah. Uh, going out, putting up the bandit signs, knocking on doors on on homes that I thought would people would be interested in selling. Um, going to community park managers and be like, "Hey, you know, anyone want to sell? Anyone coming by?" You know, behind on their lot rent. Um, I was really doing almost everything you said in the modules. Um, reaching out to uh salesmen for new mobile homes. A lot of times they would get people like, "Hey, you don't want to buy a new mobile home, but I need to sell my old one first." And they want to be interested, and so they'd either just go post it themselves or not know what to do with it. Um, so made a couple deals that way as well. But anyways, I did my first couple of deals. Uh, sold a few on payments and uh was able to carry that through graduation and after working uh after graduation for a while, just keep building my portfolio. I have, I think, 15 or 16 mobile homes sold on payments right now. I really try not to sell any on cash because I I just really want that um that uh monthly check coming in. And I'm trying to take all of that and put it into something that would last forever instead of selling mobile homes on notes. So, I'm looking at self-storage and mobile home parks. Um, I was able to successfully buy my first self-storage facility about a year ago. It is out of state in Arkansas, while I'm in Texas, and that's been going pretty well. Um, yeah, I'm not going to pretend to say that I I know everything. I know a lot. I've only been doing this for about three, three and a half years, but with the help of uh, you know, some key mentors and other people, especially in John's group and other people I've met in storage as well, um, it's greatly accelerated my growth and given me the confidence to move forward with a clear plan. So, yeah.
>> Thank you for that super just brief background. You were you when we first met, you were in pharmacy school wanting to be a pharmacist. That was your, I mean, for the rest of your life, that's what you were planning on doing, or maybe that was the goal. Then you were investing in real estate, and we talked before or right before we hopped on the call, I was asking you about, you know, getting started in mobile homes, and you had mentioned it, which is very common, that this was just a lower barrier to entry and a lower amount of risk when you did those first couple deals. When you said that you were kind of very monotone, you know, "I did my, I did a bunch of deals. I did a couple deals, made cash flow." I mean, which is awesome, and I know the struggle it took you to get there. Were you, right now, maybe that's commonplace, or just it is what it is. Back then, were you scared? Were you freaking out? Were you excited? Have you always been a cash flow guy, or were you wanting to sell them for cash back then?
>> Um, yeah, talk to those first few deals, especially. I mean, were you, did you not know if this would work, and then all of a sudden you proved it to yourself, and then it was sort of just balls to the wall, as many as you could do, or take us through those first few deals from going from like just faking it till you make it to actually doing it.
>> Yeah. So, absolutely. Like the the first couple of deals, and even even now, just different things that like, you're always going to be scared or nervous when you're trying something new, right? And uh, it everyone says, "Oh, you'll be fine. Just get started." You know, you got you learn to accept it, and it it won't bother you later. But it's and it's true. Uh, but some people, it takes a little bit longer than others, right, to feel more comfortable or even get started. So I I I took a pretty risky approach getting started, and and I'm kind of a little bit ashamed to say it, but when I was in school, uh, this it's a four-year program, so I was in my second year. I was like, man, you know, I had three family, me, close family members pass away, and I was like, man, I don't really have a lot of time that I thought. And so I got to do something, right? Just to figure out the way to buy back my time, because I I didn't want to be working 40 hours a week till I'm 65. So, I was like, what do I got to do to get started? And uh, the mobile homes really attracted me because like, man, I can get into a mobile home like $20,000 less, really 15, or at that time $12,000 or less. And uh, instead of, you know, putting whatever towards a down payment on a home, trying to fix it or rent it out, and yeah, you know, get the appreciation, the principal pay down, and uh, have this long-term asset, but I wanted to grow more quickly. Well, I was a broke college student, didn't have any money at the time. So, I actually borrowed as much as I possibly can for my student loans with the idea that if I borrow at 5, six, 7, 8%, I just need to go make sure I go make 10, 11, 12, 13. It was the easiest uh money I had access to at the time. You click a button, they give you the money if you're if you're poor, and it has the best terms you'll probably ever get in your life. You know, you don't got to pay back till you graduate. When you do graduate, they give you so many different um payment plans that you could use to no balloon payments, no all this other stuff, right? So, it's very preferential money. And I was like, you know what? I could probably borrow an extra like $15,000 to do my first deal. And if it went totally bad, I can pick up like another 20 hours a week working at my job and pay it back. You know, I actually did did the math in school while I'm supposed to be studying. And I'm like, "Okay, I I I could do this. I could do this one time. See how it goes. And next semester I'll double down and borrow more." And I did it. And, you know, my first deal, it it was horrible. Obviously, I overpaid way too much. Uh, but I still, but I but I still I still made about $1,500 bucks on it. And I was like, "Yeah, I'm going in the right direction." And I had that confidence from doing it and, you know, knowing how to do the next one better. And so I just kept doing that. I I I would find uh deals from all those different uh ways that I that I mentioned. And in the beginning, I was fixing and flipping them for cash just to so I wouldn't have to keep using my student loan money so much, it could actually be mine and I could start paying that back a little bit. And uh, this came into me once I learned how to raise money from other people. And uh, that was an amazing experience. And to be honest, I that's one of the things I was really bad at and still kind of am not too great is I I tend to give away too much. So those first couple of deals where I raised money from, I I gave away too much, and I should have kept more. Um, at the end of the day, I was only getting maybe like $100, $120 bucks per month per home uh to maintain, repair them, do everything, you know, manage them, do all the work. I was like, "Ah, this almost isn't worth it." But I stuck with it, and it was a good learning lesson. Um, and obviously being new, it's harder to negotiate for better terms when you don't have a background. So, it was okay at the time, I guess.
>> Who were you borrowing money from after the after school or after the government, after those uh was like financial aid money, right?
>> Okay. And then after that?
>> Uh, then you you know, you cut your teeth on that. You you did some deals. You you made some capital. You kept reinvesting it, but you needed more money. Who did that second round of funding? Was that friends and family kind of a thing?
>> Yes, pretty much anyone. So, it was super awkward at the time to go to your parents or your friend's parents or friends' grandparents or someone and be like, "Hey, this is what I'm doing. You know, I'm in pharmacy school, but I want I want to buy a mobile home together." Like, what? You're like, "What do you mean you want to buy a mobile home? Like, you're still going to go to school?" I'm like, "Yeah, yeah, yeah." But here's the math and all this kind of stuff. And what what I think what really sold him is just how passionate I was about it and telling them why I wanted to do it, and you know, some great people in my life that I took the chance and, you know, wrote me that check to do these deals 100%. I didn't come out of my pocket on anything, and uh, been doing pretty well. You know, all of them have gotten their money back, I think, twice over now, and um, some of the notes are coming due, and uh, so hopefully I can keep going back to them and everything. But um, most of them were friends and family. Some uh, some people were from the group, and even some people that you introduced to me, which has been very
>> Key. Yeah. And I'm still doing business with them.
>> So.
>> Yeah.
>> Dude, that's awesome. Well, they see, I mean, they're not doing it out of the kindness of their heart. I mean, a little bit, but they trust you. They know you're the real deal. I've vetted, you know, I mean, I've said so as well. And so they're doing it because you make them a lot of money. So, you know, it's win-win. So, but that's awesome, man. Yes. That's so cool. Yeah.
>> Um, right. Well, please go ahead.
>> But, um, but going back to the being scared part, uh, man, you you I don't want to say you feel like you're lying, but you know, none, you never done this before. You're all you have all these ideas when you're first starting, and you're trying to raise money, and you're like, "Hey, this is what we can do, and all this, whatever." And you know, you you got to stay cool, you know, that you can handle it, and understand for both parties that there will be problems that pop up. And how do you handle them? And especially if they're a new investor and never loaned money before, it can be really like high tension, right? Like, is everything okay? What do we do here? And you're like, "Don't worry about it. You know, I'll take care of it." And, you know, they they uh, they might freak out on you. Um, so
>> That's a very good point. If you're borrowing somebody's like last $5,000, or if they got, you know, plenty of money, and they really, yeah, that that person that loaned you their last $5,000, they would be on you every day.
>> You know, "How's my money doing? You got my money back?"
>> Yeah. And it and even the people who do have money who have never done that before, you know, they they want to stay on top of it, they want to be involved, and sometimes might get in the way as well. So, just that that's something that I learned in the beginning is like, set clear expectations on whose roles are what, how you communicate, how often do you want to communicate, um, you know, when do you want to be involved in execs, and all this can be totally changed depending on what what you both want. So,
>> Especially when you don't have as much uh experience or credibility. And I can see how especially a friend or a family friend, if they've seen, you know, they'd known you from a little like a kid, they they might just try to, like you said, sort of overstep. "Oh, this is what I would do. This is what I would do." You know, it's like, "Okay, well, how many mobile homes do you do you own?" You know, it's like, so
>> Yeah. So, I in in the beginning, I was very much a yes man. I was like, I I want this, you know, I want us to sign this. I wanted to get a report every week or month on this and whatever. I want to update. Like, "Okay, okay, okay, okay. All right, no problem."
>> And you had to.
>> I had to. And um, and it eventually, now they never bother me, and I never bother them. Even if something happens, like, "Hey, this this happened. This is what I'm doing."
>> I'll let you know what what something changes. Like, "Okay."
>> That they're happy with you. I like you said about that funding continue. Yeah, if they don't continue, someone else will. You've worked too hard and already built up such a good reputation.
>> Um, but anyway, so I I started doing those and started getting this cash flow um before graduation, and that has led to me being able to do my own deals now. And so I I really don't raise money that often anymore unless I have too much on my plate and I need to bring in, you know, investor capital. Um, and taking all of that and switching to like a commercial asset like a mobile home park or self-storage. That was pretty much just hitting the reset button. I was like, "Okay, it's all brand new again." You know, starting over from scratch, not knowing what's going on. Uh, it's a little bit easier to to understand in my opinion. And uh, but there's just more moving parts, and you know, so a lot more money at risk. And so totally scary with that for that one too. But taking what I learned before and knowing that I'm going to be going through those things still gave me a lot of confidence to be like, "Yeah, I'm going to make mistakes here." Uh, but uh, it'll it'll be okay. It'll be a good learning experience. So, yeah.
>> When you're going when you're starting the next thing, when you're how do you how do you level up? Like how do you go from doing, you know, the simple buy and sells, and then to more complicated fix and flips, to then, you know, your holding properties long-term, rent to own. You know, it seems like both like all of those are sort of like you graduate to the next level, and then you do self-storage, then you do parks. I mean, like there's a lot of things in between. But how do you personally, what's your secret to just push pushing forward when you're scared, or like knowing it's going to be a good deal? So that the answer for this, I think depends on the person. And I'm glad you said for me personally, because my answer might not apply to anyone or or very few people. That the route to get to like a wholesaling to then you're fixing and flipping to now you're buying and holding to now you're not doing that in mobile homes to now you're doing that in self-storage. You can do all those things in self-storage too, like you wholesale, buy, fix and flip, buy and hold, all these different things, right? So, I think it depends on really what you want to do. If you just want to fix and flip, great. Just fix and flip. Um, if you want to buy and hold, but you can't do that yet, then yeah, you should probably start with wholesaling or fixing and flipping to get there. But to answer your question on what I did to have that confidence to move to the next level, um, I really just took the time to educate myself. So talking to you, going through your modules, scouring YouTube, trying to connect with different individuals and groups, and trying to get as many people as I could to look over my plans or work and give me another level of confidence being like, "Yes, this is good for the next step, and I can replicate this." I'm very big on establishing a process and trying to replicate it and um, having like a standard operating procedures. So I will spend so much time to build something and optimize it to where it's very easy to keep it going, and I don't have to think too much as we move forward. But it's a lot of work going from the fix and flip to buy and hold, like, "Okay, you know, am I doing this correctly? What do I have to worry about here? How do I handle the pay late? How do I handle their evictions? You know, do I have a local person there to do all this kind of stuff?" But once you get all that there, you know, for the most part, it's pretty good. And, you know, people come and go uh who help you or contractors and stuff like that. Um, but uh, you you can easily coach them up to do uh what they need to, as long as you stay involved with that. So, the the cash flow uh, I'm personally really focusing on cash flow right now because my immediate goal is uh, I'm married, and my wife still works a full-time job. So my immediate goal is to get her down to a position that I'm at where I I really only work maybe about two days a week still at my day job. Uh, that way we can both stay home and spend time raising our son. We have an eight-month-old as our first kid, and um, that's that's our my immediate focus is to get her time back as well. And the re and I feel kind of bad about it, you know, being at home and she's at work, but she doesn't have as much interest or I guess passion or willingness to push this side of things that will make that change for us. And so it has to be me because I'm I'm the one doing it. And she's okay. She's on board. Totally supportive, and she gets it, right? And we're looking about maybe one to two year, one to two years before we can actually make that change. So that's what I'm focusing on right now. But at the uh, the same time, I'm also looking for opportunities to buy more self-storage, uh, a mobile home park, first mobile home park, and um, build that long-term uh, like cash flowing asset, right? And obviously even look into like some fix and flips or equity plays. Um, you know, and just building out a a huge portfolio where we can actually quit and just have our have our time back. So
>> Why mess with the little one and two individual mobile home deals when you now, you know, some people might think, oh, Carl graduated to self-storage units because you got a little, you know, small a good, I think it's on, I don't have any self-storage, but I guess a little tiny one, but yours is a a smaller one. Storage investor
>> Thing barely. But um, I guess the point I'm going at is why do you still do the individual mobile homes when you know it seems like the bigger paydays or the bigger cash flow is the the commercial stuff? What?
>> I asked myself that a lot, and maybe I'll look back later in the future like, man, I really should have just hit it hard looking for a mobile home park or um more self-storage to do to do these things with. But I've come to the conclusion for me is like, based off where I live in middle southern Texas, there's an abundance of mobile homes, individual mobile homes. And so I'm not going to say deals are easy to find, but I think there's more opportunity here than other parts of the country. And the cost to get into a mobile home obviously is significantly less than buying a commercial asset. So, if they're a lot if they're a lot easier to find, and I can just kind of keep redeploying the same amount of monthly cash flow, I can really rack up my cash flow to to get to my immediate goal of getting my wife into some other position like me where we're not working that much. Um, if I do that buying a commercial asset, it's going to take months to line it up, do my due diligence, close. Um, I'm really looking for projects, I'm not looking for turnkey properties. So, I'm going to need a lot of time to either infill a vacant mobile home, do the fix and flips, sell the mobile homes, or get a self-storage facility and make my improvements, you know, uh, get tenants in there with higher rents and other stuff like that, too. And that's going to take a lot longer. Um, versus I could and the cash flow will come later and everything, and I won't have to do anything with that later. Or I could just buy like two mobile homes a month, and now I'm getting an extra $2,000 in income a month. Um, and yeah, so I I I kind of don't know. I'd be interested to hear what what you would think about that actually. Like, do you do you think someone in my situation should just hit it hard for a good mobile home deal if your goal is to just get as much cash flow as possible?
>> No. The money the money talks, and what you have access to with these individual mobile home deals, and you know the numbers in the areas that you're investing in. You know the buying, what you should buy them for, what you should sell them for. You've gotten, you know, enough experience where you're not a newbie in this business. So, even not like I'm I'm certainly not the biggest mobile home park investor by any means. I'm I'm a little mobile home park investor, but I'm still, you know, even me, I'm still buying individual mobile homes because I still have really good relationships with managers. I know my numbers. The cash flow is insane compared to even if you don't own the land, even if you just own the rectangle, the cash flow is ridiculous compared to other asset classes. So, no, get the money is good, get the money. Um, with mobile homes since 2015, we've been able to sell them for cash, which I'm a proponent if you can get the cash, get it. Like, get it while you can. Although it's been about 10 years, so it's not, I mean, if I feel like that's the trend is going to keep going, but get the cash and then move that cash from the from the individual mobile homes into something with land. I mean, I'm a proponent of that. But what you're doing is the cash is real. In fact, a question I have is, what is an average because you know your numbers pretty well, and you're I think you're turning, like you're tell me about a normal month, or like are you look your goals are, or what are you typically doing now, one or two deals a month? And if so, what do those types, what do those typically look like?
>> Yeah, I try to I try to do one to two deals a month. Um, I try to be all in everything, like the move, the rehab, selling it, and everything, $15, $16,000 or less. Um, the areas that I operate in, I I I wouldn't say that I can get the highest down payments possible or the highest uh monthly payments, but it seems to be that's where uh I have the most success in, too. I have other properties and like $700, $800 lot rent parks, and it's just really hard to make them work. Um, sometimes, but uh on average, I could probably get anywhere from about $400 to $700, I think is my highest in terms of a house payment. So, you know,
>> That's good.
>> Get a $2,000 to $4,000 down payment. You do the math, you know, you're getting your money back pretty quickly.
>> And that extra $400, $700, and and monthly income can really go a long way to my personal goals. Um, so, yeah. Notes.
>> Uh, seven to 10.
>> Yeah.
>> Speaking my language. Okay.
>> Yeah. Yeah. Seven to 10. I I really try and push for 10. Um, I'm I'm It's I kind of don't like saying this sometimes, but uh, I will bust my butt like physically, mentally, you know, do anything to get something up and running and going. But after it's up and going, I don't want anything to do with it. Like, don't bother me, don't call me, you know? So, I I will be the laziest person ever.
>> No, you work hard to be lazy.
>> Unless Unless there's problems, I'll step up and do it, right? Um, but I'm trying to I'm trying to bring uh about a lifestyle where, you know, I don't have I don't have to worry about much. And, you know, with more properties and, you know, stuff like that, there's going to inherently be more you're going to be worrying about thinking about. And so, I don't want to have to worry about some of these little things sometimes. And so that's that I I could I could be doing more deals a month, too, but I I choose not to um, just because I I don't want to have that stress and workload uh of doing more deals. So I like the balance that I have. I get to stay home with my son uh doing the one or two deals a month, just managing those few contractors. I like to keep it small.
>> So that I think that works best for me.
>> What would it look like if you did ramp up to let's say four deals a month, or they don't have to be every month, but let's just say like you did put more pressure on yourself. What does that look like? You hiring someone, or you have to do just double the work?
>> No.
>> Or is that thing?
>> I No, I guess I handle it myself. Um, I might I think I think four would be kind of hard. I think four I would have to start bringing on some outside capital to help me do some of these deals. And if I kept doing four a month, I definitely would probably be the smarter thing.
>> So.
>> No. Well, I No, I wasn't saying smart or not. Hey, we could all do more. I mean, I Yeah. Yeah. No, we could all do more. And No, no, no. Not nothing you've done. You are dude compared to like the only person to judge yourself is my opinion, but like is where you were and four years ago when we first met, you know, you had dreams of owning some mobile homes and real estate and you had no idea how to do or the parks, and now you have storage. So,
>> I mean, you're on the super right trajectory. I just wanted to say all that. You're
>> No, you're good. That's actually a good a good topic that I'll kind of go off on a tangent here in a second after I answer your question. Um, but but by but by the the smarter thing, like yeah, on paper, I could be doing all this stuff, but for me personally, it's not worth the time taken away from my family. So that it it it's way more important to me. And uh, yeah, you know, I I could be, you know, spending more time working on stuff and getting us to our goals more quickly, but my wife's very happy with where we're at right now. Not very happy. And the the months or years that if I got into that rut of just working all the time, um, that's just personally something I don't want.
>> Um,
>> Good for you for saying that, man. I know there's like that cliche like,
>> You know, the the people that are super rich, the family that's super rich, but then like, you know, the kids hate the parents, or they never spend time with each other, and they're like so disconnected, and you got all the money in the world, but you you don't know. Yeah. Well, it's an interesting thought exercise because in the beginning, at least for me, and it might be the same for many people too, it's like, I just need as much money as possible. I need to do all this stuff. I need to I need to work. I need to grind. I need I need to do all this. And in the beginning, you kind of do, you know, uh, I did. And that's how I had so many deals so quickly is I just was going at it. You know, I wasn't sleeping much in pharmacy school, and, you know, I'm studying. I'm staying up till till the campus like 8 8:00 p.m. at night and then going through answering Facebook messages while I'm there or in class, you know, responding to people, and you know, it was it was really tough. Um, but I recognized really quickly that I couldn't keep that up, and I didn't want to also. So I that led to me hiring my virtual assistant to help me out with a lot of little ticky-tacky stuff. You know, trying to learn how to delegate. Um, I actually used to go and fix up mobile homes myself whenever I first started. Stop doing that. There's no way. And
>> Was that valuable though in that small piece of
>> Yeah,
>> Absolutely. And but in the beginning, when you're unsure of starting, and you're unsure if it'll even work out, when you find that first bit of success, it's very scary to change something or back off of it and try and do less because you know you're not as involved. You're uh relatively inexperienced, and it's hard to make that decision. Was hard for me, and I really could have done it a lot sooner, but uh, it led literally to me being at my day job one day, working 40 hours full-time, like when I graduated, and trying to answer phone calls and do all this stuff, and and I missed another deal or I missed another opportunity investing wise, and I called my I went outside. I called my boss up for my job. I was like, "Hey, I appreciate, you know, you helping me and getting me to where I am. Um, but I can't keep doing this. I have this other thing that I've been doing, and if I don't pursue this now, I'm going to regret it for the rest of my life." But I let it I let it build up to a point where it was really getting to me, and I was like, "Okay, I need to like make a decision to either step down or try and get some of my time back." And uh, luckily, I've done enough deals and had enough um mobile homes on payments to where it could supplement that missing income. So that was a very lucky situation for me. And I understand, you know, I have a uh maybe an easier time and better opportunities than than most people, just uh being a pharmacist and stuff like that, and also having a wife that's a pharmacist. So I also recognize I I it my my barrier of entry was probably a lot lower. Um, but everyone still goes through that same thing, I think.
>> That's incredible. Like, just hearing more about your journey, and that you fought for what was, you know, given to you and what you've made, and what, I mean, you could still be just so still in or being a full-time pharmacist, which there's nothing wrong with that, but you chose to pursue and to actually, you know, cut down on those hours. I have I had goose, I still do a little bit, but when you said that story about, you know, just the that moment of you were losing out on some deals, and you go outside and tell your boss about, I mean, uh, people listening to this podcast, they I would imagine they have like, "I want to do that. I want to tell my boss I need to cut down in hours." But none of that was given to you, and you were doing this. I mean, you were scared, you were doing it on, you know, not on your own, but I mean, everything you've done is or everything you have now is a complete reflection of what you've done. So, great job, and it's only this just part of your journey, man.
>> I appreciate it. And um, it's interesting to because my my wife grounds me a lot on this stuff because I think as investors and people who really want to change their situation have actually taken that first step. Once you're in there, it's really hard to know if you're doing the right thing at that time. Like, you and I have talked about this before, where it's like, "Is this a good deal? Is this a good area? You know, are there good buyers here? Or self-storage, you know, can I raise my rents this high?" All this stuff. You really don't know until after the fact, maybe like months or years later. And I have that problem where I'm thinking, if if I could do something better, if I'm doing uh something a different way, and my wife is really like, "Hey, you know, just look what we had like a year ago. Look what we had like two years ago, and where we're at now." And I'm like, "Yeah, you know, it it it there, you know, so the fruits of your labor are there." And I just want to tell everyone that if you're feeling like you're not making headway and all that stuff, really try and sit back and think of where you were and where you are now. Even if you don't even have a deal, if you're just calling or putting up bandit signs or even just talking to people like John or anyone else in the group, you know, that that's something. I'm a big believer that you're an average of the the five people you spend the most time with. And five is just an arbitrary number, but you know, as long as you're surrounding yourselves with like-minded people, you will grow. They'll make you feel bad that you're not doing anything, and you can do it that way, or you get inspired, like, "I can do it." It doesn't matter. But you you'll grow. So,
>> And it's not a straight line of growth either. It's a growth, and then you get sidetracked for life does something, or you ask a question, or go you follow a different topic, or you get like, so it's definitely, you know, falling upwards, like you keep falling in the right direction and going upwards, and you can still feel like a failure. I mean, I constantly feel like a failure, or like even like last month, you know, I closed deals, and this month, you know, I didn't close a deal yet on a mobile home. It's like, I feel like a failure, you know? It's like, what?
>> And I don't Do you ever have Do you ever have those moments still where like, even after everything that you've done, you feel like a failure for some reason? You haven't done enough, or you you've let yourself down, or
>> Absolutely. Absolutely. Almost every week. It's It's like a I don't I don't think some of them are as big as you make them out to be, but obviously there I I should I could have gotten a better contractor. I could have done a better deal negotiating this. I could have done a better job finding or advertising a home, or um, you know, I I could have done better with the rehab, buying it. Every little aspect, you feel like you could have done better, right? And most of the time, it just takes a little bit more of your time, and you could do it. But I've also adopted the idea that it's progress, not perfection, right? Being a pharmacist in my training, there's a right and wrong answer for most things, right? You know, most things. And so that's how I was trained. And
>> I I wouldn't say that's very conducive to investing.
>> That's funny.
>> So, so it's it it took me a while to not try and write up like a fix and flip like a lab report, and you know, step back and be like, you know, it's not that complicated. It's it's not that crazy. And to to realize that it's progress, not perfection. I'm not looking for perfect. I'm not looking to do like the best possible. It'd be great if it happens. Obviously, I'm shooting for that, but if it doesn't happen, then at least I'm still moving the needle, right? So, uh, and I I feel like that's been a big impact on like my mentality and stuff. But to answer your question about like falling upwards, uh, I kind of want to go back to an earlier point of getting started, being scared, uh, deciding to do the wholesale fixes and stuff like that. So, in the very beginning, the whole reason why I started, right, is because I wanted more time for myself and my family. And I'm I'm a big like future thinker, and backing that up into what I can do today to get there. And so my my original goal, and it still is, is to have a $45 million portfolio by the time I'm 45. I'm 32 right now. And I was like, "Well, why do I want that?" And in my mind, if I take half of that and that goes to the bank, another half that goes to a partner because there's no way I'm doing that by myself. And let's say we're making 10, 10, 15% off the rest of that money, right? With my share of that, I have a list of friends and family of about 10 people um that I ask myself, "What does my life need to look like to just give them $10,000 a month?" And obviously, it's like, Mom, Dad, and stuff, and everyone, and people who I love um like they're still working physical labor jobs in their mid-60s and stuff, no retirement plans, and everything. And so, you know, as a son and uh, or just child in general, you want to try and take care of your parents and anyone else, right? So, I was like, "What does my life need to look like to do that?" And I already love doing it, so it wouldn't be that big of a deal. And it would be very rewarding for me. That that is literally that is in a nutshell my goal. Everything else is just a way to get there, right? So, that's what it was. And then I get started, and I realize it might take a little bit longer, or I have to put in significantly more effort to stay on track with that with those kinds of things. And then it was like, "Well, if I don't make it halfway there, that's still amazing, right?" And, you know, even if I don't make it halfway there, I make it a quarter of the way there, it's still significantly better than doing nothing or where I was. But keeping that in mind has been like, "Okay, I can't just do the fix and flips. I have to do the buy and holds to do this, and then I have to take that and get into the commercial space and, you know, doing those kinds of deals and all that kind of stuff." And so it's always kept me in this trajectory. Sometimes it goes like this, but it's kept me in this trajectory of moving on to the next bigger bigger thing. Was there one deal along this trajectory that either um that either like made you know that you were on the right path, or that particularly changed your like that had more of an impact than some other deals? Was there
>> Myself, my self-storage deal for sure.
>> And yeah, so I I I was looking for I was looking for mobile home parks too, but just some kind of commercial asset just to realize like I I think I read something crazy. It's like only 3% of the population in the US owns commercial commercial property.
>> Wow.
>> That was and I was like, "That's pretty crazy." So just to
>> That's pretty crazy.
>> Just to like kind of associate yourself and to be able to finally be there and be like, "I own commercial property." You know, I'm in this business with the big boys, and if you put it put it on paper, you got you got Public Storage and me, and we're both self-storage investors right now, rubbing shoulders.
>> How many mobile home deals before you did the the stealth the self-storage?
>> Oh.
>> Just for people to like
>> Uh, I don't know off the top of my head, but I bought my self-storage property about a year ago. And at that time, I probably only had about maybe seven to nine homes sold on payments. And I was doing I was doing some flips then as well. And I don't even know like
>> What was bringing in more money out of curiosity, those nine cash flowing deals, or this the small storage unit? Well, like which one would you think if you had to put money?
>> Yeah.
>> Yeah. So, so, so, so a little bit about that. Um, myself, my self-storage property, it's not huge. It's not crazy. It's only 31 units, and uh, it's on an acre parcel, so I have room to double that. And then some parking, right? It's not it's definitely like small compared to normalized properties, right? It. I wouldn't even say it's small. It's almost tiny, but it was my first one, and it's something that I own 100%. I don't have anyone else on it. And uh, I was that's actually a fix and flip. So that that one was not a buy and hold. So now, like instead of doing the buy and holds with the mobile home, so going back to fix and flips, but with storage now. So it's a bigger asset, right? Uh, because the goal for that one was was to go in, raise the value, and then exit in a year or two. Um, sorry. So the cash flow from the mobile home, it's significantly more passive and more dependable than the mobile homes, you know, because sometimes people don't pay and there's issues.
>> Wait, you said the mobile homes was more dependable. I think did you mean the
>> Oh, self-storage. Self-storage.
>> Oh, is more dependable than the mobile homes. Okay.
>> Yeah. Yeah. Because I I think it depends on the kind of mobile home that you're dealing with, but uh, the self-storage business, it's extremely more passive than in my experience, at least with selling mobile homes on payments. So, in a way, that is great for me because I don't have to be as involved. I don't have to worry about problems popping up. However, I had to deploy a significant amount more money to buy it, get it fixed, and get it up and running than I could have spent $15,000 on a mobile home and be making almost as much as I do in my storage business.
>> So for me, when I look at that, you know, I I'd rather keep doing more individual mobile homes because it fixes my current situation of cash flow. Now, obviously, I get
The principal payown, the appreciation, it's a commercial asset, there's more buyers out there for it. Um, and also, I have a significant value add that I can do of doubling the amount of storage I have. Those are all things you need to consider and stuff like that. But and I will do those things, but right now with the cash flow, it's like I'm going to do some more mobile home deals now.
Uh, just real quick like mistakes with that. Should have bought bigger. Um, should have done a better job uh learning how to estimate demand. Demand's a tricky thing in my opinion and it's uh, yeah, it could really bite you in the butt if you don't get your your supply and demand right for the for the storage units for storage. Yeah.
So, long story short, I bought it as a fix and flip. Uh, and my goal was to get out of it in a year or two, but I underestimated or excuse me, I overestimated how many net move-ins I would get per month after my changes. And I was banking on two to four net move-ins. So, like the people coming in and people coming out, I gained two to four people every month, right? Um, now that I've owned it a year and I've looked at my data, I've only been through one full one full year. So, there's seasonality in storage when people use it more and the prices are higher. So there's some maybe bias in there.
And um, when's the when's the busy season? Uh, usually it's around I I have to double check. So because I I don't I don't I don't want to misspeak, but there is some seasonality to it and and I'm still like I've read it and and I've and I've came across it, but I just don't have it memorized yet. So it's it there's some kind of seasonality to it.
I wonder if it varies around the country if the you know weather has something to do. I think so the weather. So yeah, so it's basically when people are more likely to go out and actually move stuff and they're hot and sweaty or it's cold or, you know, if it's freezing over, stuff like that, right? Um, but instead of getting two to four, I'm only getting like one to two. So it's still okay, but my timeline of getting out of it in one to two years is probably going to be like two to four now. And that's okay, but you know, it doesn't keep me on my 45 million or whatever timeline that I that I need. But it's all good.
Um, what do they say that things will I mean they always take well for repairs or rehab projects it takes what double the time to fix and triple the cost or triple the cost and double the time it's going to take more than you expect typically. Yeah.
With the I guess actually this is a two two-part question but same question for self-storage units uh and for mobile home when you rent to own a mobile home what are like the top three uh headaches that you that you have from that business or the people. Man.
I think I think because of the relatively lower numbers in mobile homes like uh get being all in $15,000, you know, $1,000 makes a huge difference in like a down payment or paying a contractor extra $1,000, right? It it it has such a s more significant impact. So, headaches for me is trying to be really nitpicky on bids, repair costs, uh really paying attention to that stuff because an extra couple hundred bucks can push you off like six months uh if you're selling it on payments, right? And it just totally messes up your numbers. That meaning that we have to try and do a really good job finding, you know, good contractors while also not paying so much. That's really hard, you know, and uh so that's been a big headache for me is is constantly having to cycle through contractors and stuff. And um I've gotten to the point where I'll push back my return a little bit just to pay to have the same person who's dependable and just accept it even though I could try a little bit harder and get and make the numbers a lot better. But for me, just for simplicity, just getting it done, moving to the next one, I'll pay I'm paying a little bit more now. So there's that part.
Um, I think this other this next one is dependent on the kind of park that you're in. So it's like a B C D tier park. you know, the lower you go, the more problems you'll have with people paying late, um issues between tenants in the park, uh stuff like that. And uh I try to be available to my tenant buyers um within reason. And so they have a problem they can't solve and it's going to affect them paying me, I am going to try to help them out or point them in the right direction or who to talk to uh to get their issue fixed so we can maintain that open line of communication so they just don't just stop paying or just dip on me one day. So, I I I know what's going on. I'd say that's the second one. Um, third one, those two for sure are the biggest ones. I don't I don't really think I have a third one.
No, if that's what comes to mind. For the rent to owns on the uh for the for getting the calls from the tenants, is it for you to fix things? Is it not paying or they're complaining about their neighbors? Sometime some sometimes all three happen and more. Uh, but most of the time it's just the message like hey I'm going to be late and I always say like okay well when are you going to pay and I try to be a little lenient and you know it's like the day after the late fees due like okay well if you pay that day I'll give you a credit for the next month's late fee or whatever right or if it's even a couple of days it really just depends on how I'm feeling I guess then you know then you're paying the late fee or not or if it's like a month later it's like hey we're going to have a problem. But I'll but I'll try and work with you to figure out just to keep you in the home because I don't want to have to go through and fix everything up and especially if I haven't gotten all money back on that home yet. Yeah. So, I'll try my best to keep to keep people in there within reason how how late they are.
Is are some people some tenants you have you don't ever get calls from? Is it like an 80/20 thing where 80% of the problems are coming from 20% or everyone has their issues? I think it is 80/20. Everyone has their everyone has their issues but one but they'll have their issue like twice a year maybe and then there's like one or two people it's every other month or so. So it's it's it's kind of a hit and miss and there there have been some people in the past where it's a a monthly issue and they're no longer a tenant buyer of mine. Um, so, uh, yeah, I I think you have to deal with that definitely, uh, a little bit more. And keeping in mind like the eviction process and all the work that entails and getting the property ready again, it it it's makes you step back like, do I really want to get rid of this person? Is it to that point where it makes more sense to get rid of them and start over with someone else?
Now, going back to storage, the top three for storage one is totally fixable and it's my problem, but I'm having issues with my gate. I can't get my gate to sync a new customer to our system and it works, but that's not what we're talking about, right? Wasn't expecting that. No, hey, that that was that's on your mind. I mean, that is a problem. Yeah, it's $20,000 gate and a year later I'm still having issues with it. It's supposed to be like an automated they can pay and then they get a code hands off. You don't even have to touch it. It just Absolutely. Yeah. Right then a minute a minute later they can punch it in and it works and yeah it's supposed to be right for 20 for $20,000 I would think. Anyways um I I really don't have anything. I have a call center who deals with all that so I don't have to hear any of that.
Um, you have a call center for the uh self-storage. Do you do all the every do you all do all the property management for your rent to owns or you have your VA? Uh, all that she does is reconcile who's late and not late and sends out emails for me. If there's no payments made from there or um a response from them, then I'll call be like, "Hey, what's going on?" So, um.
Have you had to do in your short career, sorry, to interrupt, have you have you done an eviction? Yes. Or more than one? Just one. Okay. Okay. You couldn't get them out amicably. That was your last option. Is that what happened? Uh, what what ended up happening is that we give them a notice to set the court dates and showed up and and they didn't show up. So I guess I can count that. I didn't get like a judgment or a rate of possession. I I haven't made it to that part yet, luckily. Um, but we did have to go that far and luckily the house wasn't totally destroyed. So.
When you got it back, did you do repairs and sell it or did you sell it as is? No, I did repairs. So, yeah, just just a little bit. It wasn't it wasn't really too much. It was more just like some cosmetic stuff. Okay.
Um, but yeah, but yeah, in storage, you know, I have a a local person that just goes and does checklists for me. They don't bother me. The customers don't bother me. So, I really don't get bothered by much unless it's uh from my team and they're so much easier to deal with. I just do this and you know, they take care of it.
Um, things should not take extremely long in businesses. is you know the the the speed of of of iteration is important I think and the speed of taking action, you know, to to figure out what's working and what's not, you know, you you implement something, you start something and it's not working, okay, change it up a little bit and then change it up and then change it up until it is working and many people I guess you have to decide is it you want the pain now or the pain later, short-term pain or like long-term pain and for me long-term pain is working until I'm 60 or 70 or 80 or 90 with no, you know, retirement plan like you like you were saying or giving all my time to somebody else's company or not to my children versus the short-term pain is the stuff that you and I have gone through and we are still going through. So maybe it's not exactly short-term pain. You can keep going and you can but I guess just the short-term pain now of this of the struggle like burning the candle at you know all the ends and in the beginning you're going on faith. You're a beginner. It sucks to be a beginner. You're learning everything. You're doing new stuff. You're scared and then still you have to iterate iterate you're going on faith. Everyone else this working for them but not me.
So I guess but everyone's journeys like their ultimate goals are so different. And that's a good philosophical thought too is the problems that you're dealing with are uh or that how they affect you are different from what they were when you started obviously. But because you're because you're still doing deals, you're still moving forward, you're still trying to grow, you're still creating new problems for yourself. So, is it worth to try and do your best to avoid them or make them so small to where they don't affect you that much or should you just go all in because you're still going to have them anyway. Yeah.
So, it's Right. Do you hide behind a rock or just let like life pass you by? Because that that's something that I think that I've thought about uh for a while, too. It's like, you know, I can't wait till I it's it's kind of funny. I can't wait to have a big enough portfolio to where I don't have problems or someone else deals with them. Is that what it is? Basically. Yeah.
Yeah. So, so I I hit like that and I was like I don't think that's a thing or you know, because unless I pay someone so well, even then I don't even think they would they couldn't get me involved as the owner, right? Uh, so I don't know that'd be one of my questions that I would ask someone is be like, "Hey, you have all these things, you know, like do you still have problems? Like do you still have stuff that bothers you that you have to deal with or can are you able is there is there a critical point where you can delegate so much that you're just chilling?" I don't know.
Well, you're right about there being levels. I mean, a lot of people they're just so worried about making ends meet or feeding themselves, you know, that they don't have the ability to focus on actually building something. And then when you do get actually enough money that you're like, okay, I got six months in the bank and I can actually breathe, you know, and then that's another level. And then you have another level where, you know, you have six figures in the bank and that's and then you have another level where it's seven figures or that you have too much, you know, and so it's just these different levels where mentally you can be making the money but physically or like or you're making the money physically but you still mentally think that you are a loser, you know. So even though the people that make all the money, they can still be not happy. They can still be miserable. They can still self-doubt. Yeah. Like crazy. So, it's not all about the money, but it certainly helps. The problems are so much you can deal with your problems so much easier. You can Leverage clarity. Great saying. So much more leverageable.
Yeah. I I every So, one of my strengths I I really believe is like analyzing stuff and like creative finance. I love learning about different ways to do deals or or, you know, structure something. And I I think about it like a Batman belt. Like I I have a different tool in my Batman. I'm just pulling out all kind of random stuff, just throwing it. Um, where does he get those tools? I know, right? But, um, no, you you you maybe thought of something like when you get to that million dollars in the bank, whatever. For me personally, just thinking about that now, I would be even more stressed. I believe I'd be on the phone, my CP is like, what do I got to buy this year for like tax deferment? Am I 1031 wanting this? When's my timeline? You know, I I gotta make this deal work and then, you know, should I buy this? Should I sell this here? you know, I I be thinking about stuff like that. Whereas like now I don't have to worry too much about, you know, my gains and losses every year. But when it comes to that amount and you're like, "Oh, I could lose like $100,000 if I don't do this, right?" Taxes. So.
Who knows if you get all that money at one point, but you're usually growing with the money. You know, you don't make it all in one huge payday usually. So, you're growing with it. you know, this year you made twice as much as last year and last year you or now the next year you're going to make almost twice. So, it's like it's sort of although you don't know what to do when you get to that point and I don't know what to do when I get to the next level or two, like I'm going to I'm going I I have faith in myself that I'm going to learn. I'm going to surround myself with the right, you know, financial planners and people and help and coaches. And I've gotten to this point by being, you know, frugal and prudent and, you know, smart decisions. So, it's not like I'm going to make some stupid decision all of a sudden, or at least I hope not. So, no, give yourself that credit and you will have that and you will not be stressed out because you'll have much more so many more tools not just in your belt, but in your mental belt as well. So.
Yeah. Yeah, that's a good point. So. And I want to know I mean I I want to know you for many many more years to come and I don't see that changing and so through the parks through more self-storage through more individual mobile home deals. Thank you so much for being absolutely and even the the community that that you built um like there's so many other people out there doing great things that are very inspiring. Uh I I I don't remember his name right now, but he was up there like asking for um like donations for the people affected by the bad weather and like the Carolinas and stuff and everything. And then yeah, I I can't remember his name right now, but he seems like such a great guy and I've spoken with him very briefly um just on a few things and uh so it's just people like that like the community that you built and I think it's the best Facebook community that I've ever been a part of even like some of the storage ones and other stuff. People are there. Let's do this, let's do this, let's do this. And you know um people really seem to be helping each other out. So, I think you are a big credit to my success and where I've been and just even just taking some of the things that you do and how like giving you are with your time. I've tried to um replicate that in my own life and it's given me so many more opportunities. So, just going out talking to people and trying to build those relationships with others like you, like me, like the person just starting. Who knows where they'll be one day. Thank you so much, Carl.
Yeah. Yeah. Just for people to see like for you to open up, for you to be an open book, talk about this stuff that is not necessarily sexy, but that we all go through like this is the lubrication that we have to like, you know, the mental excitement needs to we have to take the action. And if we're just so depressed or we don't think we can do it or we're so negative to ourel, a lot of people don't have those five people like you were saying surrounding them to boost, help them up. I only have like two or three. It's it's so hard to find people that you gel with that have uh same goals in mind and stuff like that. And investing can be kind of lonely sometimes, you know, when you're out there just doing stuff by yourself and you know, um maybe you don't have those people you can call on and to double check your work or or you do, but you don't want to feel like you're bothering them because, you know, they got their own stuff going on and you're not paying them. Um, I mean, you could, but you know, they're just doing it out of the kindness of their heart and so you might be someone who's not comfortable doing things like that and so it could be kind of lonely and, you know, scared. So yeah, having the community is is great. Just try and engage with it. So.