This is the story of a guy who turned two mobile home parks into $3.5 million in the bank and $150,000 per year in management fees, and that’s without even selling them! The only way the owner would talk to me was by remaining completely anonymous and having no reference to where his parks are located at, given the degree of political friction in America today. But the story is so uplifting and positive that we thought it needed to be heard. So call it a celebration of optimism. And capitalism. It’s a story that’s truly American.
2 Parks. $3.5M Banked. $150K/Year Without Selling. - Transcript
0:00:00.1 Frank Rolfe: Many people think America is going down the drain. In fact, Warren Buffett recently said that the brilliant period of the American economy was in fact over. And it's very easy to get depressed because you look at all the different articles and the statistics and things just don't look rosy at all. Lots of layoffs, lots of numbers that just don't compute anymore. End of ACA health subsidies. Things could not look bleaker.
0:00:24.5 Frank Rolfe: But at the same time, there is still hope and promise in America. And we wanted to get this guy on because he's an amazing success story of how you can make a fortune in the mobile home park business. But we live in very politically trying times today, as we all know. So the only way we could get him on here was to not use his name or the park or where the parks are located at. So we're gonna refer to him affectionately now as Surfer Dude because he likes to surf. And we thought that might be a good descriptive name and it will kind of tie into the discussion as we go. So this will be a story of optimism and capitalism. And so we're calling this basically finding optimism in capitalism because although 40% of America now identifies as socialist. Being a socialist is kind of surrender, it's kind of giving up. Because it's so much more fun to be capitalist and successful than to be socialist. And so hopefully this will be a message that resonates with a lot of people who are particularly looking for direction right now in investing, because as we know, a lot of investments have kind of seen their best days. So, Surfer Dude, are you here with us?
0:01:40.0 Surfer Dude: I'm here, Frank. Thanks for having me.
0:01:41.7 Frank Rolfe: Well, we are delighted to have you. And again, we're not gonna discuss your parks, the park names, the park locations, or any of those statistics. We are just gonna discuss the background story of how you pulled it all off. And so let's just start off going way back in time. How did you ever even think of mobile home parks to begin with? How did mobile home parks even get on your radar screen as an investment?
0:02:04.3 Surfer Dude: Well, it's a good question. I was essentially looking for yield on apartment buildings and I just couldn't... I'd already had success with single-family rental homes and whatnot right after the recession, obviously, when single-family homes you could buy them for nothing. And I just couldn't make the math work on apartment buildings when maintenance and repairs were accounted for. I just couldn't make the numbers work. And so kept doing a lot of research. I'm a big research guy. And essentially I had a friend at the time who had been to your boot camp. Very successful guy, he actually owns a lot of parks. And he had suggested that I look into mobile home parks. And I was just kind of like, I don't know about that, whatever. And then basically he's just like, "Hey, if you're looking for the best risk-adjusted returns and the highest cap rates," and this was about a decade ago, he's like, "You want to look into parks and go to this boot camp thing."
0:03:08.6 Surfer Dude: So off I went to boot camp. And that was, gosh, about a decade-ish ago. And the boot camp I went to was pretty exciting because, I won't disclose where it was at and whatnot, but there was some protesters and some signs and some things that were hot. And to me it was just like, okay, I've always been a little bit of a contrarian by nature. And I was like, okay, I'm in the right place here. If this is something that people are against and people aren't knowing about, then to me that meant potential opportunity. And as I continued to learn for probably another six or ten months with MHU Investor Club and podcasts, et cetera, it started to make a lot of sense to me. And off I went on calling on parks and looking at deals, which to find my first deal probably took me about two years.
0:04:02.2 Surfer Dude: I was in and out of contract and doing due diligence on, I think, four parks before I bought my first park. So there is definitely a learning process in order to get the really good deals. But that's essentially how I got into the business. And yeah, multiple things can be true, right? The news is always bad, but it also, at the same time, objectively, there's never been a better time to be alive or to be an entrepreneur, even in America with everything going on right now. And so I always just looked at like, okay, well, I can't control the Strait of Hormuz, I can't control the recession, COVID. I can't control any of these things. But what can I do? What's the next step that I can do to make a win for myself and my family, given how the chessboard is laid out? And so affordable housing made a lot of sense. Mobile home parks made a lot of sense, and that's essentially how and why I got into the business.
0:04:57.5 Frank Rolfe: Let's go back for a minute, because I have also, I share your same belief. I've been shown apartment deals now for, oh man, 40 years or more. When I sold my billboard business, everyone came to me trying to get me to invest in apartment projects. And I would look through the numbers I was being presented with and I would always say, "Well, guys, what about fixing stuff up? What about having to replace this or that? How about if we have to fix the roof?" And everyone would always tell me, "Oh yeah, well, we're gonna sell before that." Right. And I could never figure out how there was any money in it. I mean, I disappointed many of my childhood friends and neighbors because there's so many people in the multifamily space. They're brokers, they're lenders, I mean, you name it. But I couldn't figure it out. I tried so hard. It was something that I thought, "Oh, I must be missing something because so many people dig it," but I couldn't figure it out. And yeah, so there's a lot of spillover right now between multifamily and mobile home parks. A lot of multifamily people are having problems. I mean, if you look right now, statistically, the fastest declining segment or the fastest growing segment of conduit default, loan default, is multifamily. So maybe you and I weren't crazy to not go into that niche. That niche is looking really, really kind of rough, right? So you had this idea, "Hey, I'm gonna go into mobile home parks." Came to boot camp, which I assume you liked, right? Worked well for you?
0:06:29.6 Surfer Dude: Oh yeah, best event I've ever been to. By far.
0:06:33.4 Frank Rolfe: Okay, so now you're going out there looking at the parks. And when you were looking at the parks, what was your sorting criteria initially when you started up? You were looking for, how did you pick out what you wanted? I mean, geographically, size, were you looking for turnarounds, were you looking to fill vacant lots? What were you looking for?
0:06:52.9 Surfer Dude: Good question. So depends on which park, right? So for my first park, I was looking for... I have family in a certain area, and so I was looking for something that was going to be drivable to where family is that I often visit. And so something I could get to relatively quick was kind of on the docket for the first park. Also, I wanted city utilities and I wanted tenant-owned homes and no floodplain, that kind of stuff. I wasn't concerned about age of home. My first park did have a little bit of density, but not too bad. So there's no perfect park. But the first park, I didn't want to take on a bunch of park-owned homes or fill a bunch of vacant lots or anything like that. So my first park was city utilities, 100% occupied, 100% tenant-owned homes. And it was 30 lots. And so I bought that over seven years ago, and I feel like that was a really great place to get yield because in that 30 to 50 lot range, you weren't competing with a lot of the big guys that were looking at 100-plus lots or 200-plus lots. You could get just an insane cap rate.
0:08:06.6 Frank Rolfe: So give you an idea on that, 30-lot park is in the major MSA. I'll just say the lot rent today is almost $600 a month, plus I bill back for water, sewer, and trash. All tenant-owned homes, city utilities. And I bought that park for $400,000, $420,000 to be exact. And it was fully occupied. So 30 occupied at $600 lot rent, and it was at $330 lot rent when I closed. You're talking about, what does that come out to, $12,000 per occupied lot? So I was buying below replacement costs, right? And so that was a little bit of, well, I would say luck, but I'd been in and out of several deals over a couple of years to get to that first deal. I was patient, right? I'm a salesperson. So in sales, you want to be aggressively aggressive, but in investing, you want to be aggressively patient, right? So you want to be like a tiger in the bush, looking for prey on the hunt, but striking when the time is right. And that's what I was able to do on that first deal, because I knew that first deal was gonna set my trajectory for my future deals as well. And so my second deal... Sorry, go ahead.
0:09:16.5 Frank Rolfe: I was gonna say, and let's be honest, you make your own luck, right? I mean, there is such a thing as luck. If I go in a casino and I play blackjack and I win, there was the element of luck, but there was also the element that I did risk my time, my capital to go to the casino. And then additionally, there is some degree of skill even then on whether to say hit me or not. I don't gamble, so this is a terrible analogy. But the same is true in the park business because you created your luck in finding this deal through enormous volume, right? I assume you looked at a lot of deals, right?
0:09:35.2 Surfer Dude: Exactly. Yeah. Enormous volume.
0:09:53.9 Frank Rolfe: And so someone listening to this and saying, "Oh, gosh, it took him two years to find it." Number one, you probably had extremely rigid underwriting of what you were trying to buy, right? Because your very first deal, you did not want to make a mistake. So you're very, very focused. And number two, you were looking at a lot of deals trying to find the best one, right? Same thing as a smart buyer of used cars would do where you plow through every used car available on AutoTrader, looking at every photograph, calling every seller. What's the story on the car? What are the options on the car? What's the best price you could do? That to me, that is what separates the people who do incredibly well as you have from the people who don't do as well, is the amount of volume you hit, right? Because when you hit big volume, you always seem to win. So on this first deal, let's talk about mechanics for a minute. So the first deal, how did you find it? Broker, cold call, direct mail? Where'd the first deal come from?
0:10:53.8 Surfer Dude: Oh my God, it's a really good question. I'll add one thing to that too. Enormous volume when you're new, but also when you're new, combining enormous volume with enormous study. Because knowing that you don't know anything means that you don't have any skills or experience, so you have to study a lot. I'd listen to all these people on these podcasts and I'd listen to MHU calls and I'm like, everybody's making all these mistakes. And I was like, that's the dumbest thing ever. Why don't I just learn from Frank's mistakes over 30 years and Dave's mistakes and all these other people? I don't need to make any of these mistakes. All the mistakes have already been made for me, right? Because I'm not a pioneer, I'm a copycat, right? So I never understood the, "Oh, you got to go out there and make your own mistakes." Yeah, you're gonna make some mistakes, but you don't need to make catastrophic mistakes that are avoidable if you combine enormous volume with enormous study, right? And so that was also something I was doing while I was doing all the volume. I was learning the whole time. Anything I could get my hands on, didn't matter if it was a three-hour call with you, I listened to every single word, right? So I had your experience and all the mistakes in me as I was doing this, even though I was brand new. Obviously, you learn the most after you buy a park, but still, you can learn a ton before you ever do a deal.
0:12:10.0 Surfer Dude: And so your follow-up question there was... Sorry, I did my own little sermon. What was your question to me about the mechanics of the deal?
0:12:16.8 Frank Rolfe: Well, no, no, no, that's a great point. Yeah, how did you find the deal? And then additionally, right, how'd you find the thing?
0:12:23.5 Surfer Dude: So the deal, okay, so first deal came from, and this is connecting the dots going backwards, always wild. So my first deal came from, I was direct cold calling mom-and-pop owners, and I was under contract on this park and I really liked the park. I had a great relationship with the seller. This thing could have been a screaming deal, but it was 100% in the 100-year floodplain. And I even looked at site aerial maps where this thing used to have 96 units, it was down to like 40. There was reports of catastrophic flood. It was also in a floodway as well. It was just like I couldn't touch the thing. And so, but the lady wanted to sell. Her husband built the park. It was definitely an asset that somebody would buy for sure, given the location, et ceteraetera., even though it was in a floodplain. And so what I did is I took this lead that I had and I sent it to a broker, one of a broker that we all kind of have known has been on the call before. And I just said, "Hey, man, here's a deal for you. I got a relationship with this lady. I told her about you. She's ready to list. Good luck selling. And hey, if you find anything in this area, like a pocket listing or something, if you wouldn't mind letting me know," right? Just not thinking anything would ever come of it, right? But I was just like, okay, I'll give a broker a carrot and who knows, maybe he'll bring me a deal someday. And sure enough, two months later he's like, "Hey, I got a deal in that area. It's a great little deal and I think you should take a look at it." And that was the first park that I ended up buying.
0:13:55.0 Frank Rolfe: And how did you finance your first park?
0:13:56.5 Surfer Dude: So you never know.
0:13:57.5 Frank Rolfe: That's a struggle for some people, financing. How did you finance that first park? Seller carry or a bank or how did you do that?
0:14:03.7 Surfer Dude: Good question. Yeah, so very first one, I actually just did local bank financing, full recourse. And I didn't really like quarterly reports and I had kind of other cash and assets and things like that. And so I ended up just paying it off since it was only $400 grand. After the first like 18 months, I just paid it off, which is not necessarily smart, but when you're buying something that's 30 occupied for $12,000 per occupied pad, you can still pay it off and you're still getting a 20%... It was probably like an 18 cap or something, 20 cap, something like that. And so I paid it off just because I wanted to, but I used a local bank for that first one.
0:14:43.0 Frank Rolfe: Okay. And then between the first one and the second one, how big a frame of time was that? So you went to boot camp and two years later you bought park one. Then how far after park one did you buy park two?
0:14:54.0 Surfer Dude: Yeah, so May of 2019, I bought the first park and then COVID hit, right? And I closed on my second park in December of 2021 because essentially I was under contract on it and COVID closed the world down. I couldn't even get on a flight. But what I noticed is I had 100% collections all through COVID. I never even missed one rent. We never even got a late payment on the 30 occupied park that I had because the tenants, it was a Hispanic community, they've been there for years, obviously they wanted to pay their rent, they didn't want to get... And I had a good manager, et cetera. And so I was like, "This is great," right? And so when opportunity number two came for my second park, I was a little bit, I won't say more aggressive than I should have been, but I was more familiar with like, oh, wow, this works. And so I closed on the second one December of 2021. That one was 52 pads and it had maybe like 20 park-owned homes. So that one was a little bit heavier lift than the first one. Ended up turning it around and that one is under contract right now. I'd say that'd be like a single in baseball. I had partners in that deal and stuff. That one will do pretty well. It'll do about a million dollars in profit. I'm 53% owner of that one. And so that's park two. That one's for sale just because didn't want to hold that one long term. And it was in a different MSA than the first one, so I wasn't really adding on to my kind of local economies of scale there. And so that park that I bought in December of 2021, we're going to close on that sale here in about six or seven weeks.
0:16:39.1 Frank Rolfe: Okay. And then is there a park three?
0:16:41.2 Surfer Dude: Yeah, the third park is the best one. This one I stole. I remember having a call with you because I... Again, I'm just a student, I'm a copycat. I never wanted to be a pioneer. I'm an entrepreneur, but just an entrepreneur that copies what other entrepreneurs have done before me. And I remember doing a deal review like I always do with you and you're like, "Dude, you're buying this thing for like a third of replacement costs. Like, you don't have a choice, you have to buy it." Right? I remember you said that to me. And this thing was 40 pads occupied right down the street from the first park. City utilities, all tenant-owned homes. And I bought this one for $350,000. And it's the same thing. It's a $600 lot rent now plus bill back for water, sewer, and trash. And so I bought it for less than $10,000 per occupied pad.
0:17:30.4 Surfer Dude: PVC sewer pipes, good infrastructure, no density, no floodplain, no floodway, just... I mean, again, here's the thing about luck. My best friend said this to me because I told him, I was like, "Hey, I got lucky on this one because I called mom and pop directly, but I was not calling them to buy their park. I was calling them because I call every park in my MSA every year to get rent comps." So I was calling the guy just to say, "Hey man, what's your rent gonna be this year? Blah, blah," right? I talk to all the owners in my MSA every year, which I think a lot of park owners don't do, right? That's where the work behind luck is good. And he's like, "Hey, I'm looking to sell." And I was like, "Oh, okay, cool man. You want me to call you in a month or two and kind of see where you're at?" And he's like, "I'm dying. Like, I'm ready to sell tomorrow. Like, we can just talk right now." And I was like, "Okay." And so ended up getting that thing under contract for $30,000 down on a seller finance note for five years, non-recourse, for $350 grand, and ended up paying that one off as well. And I remember telling my buddy, I was like, "Hey, I got lucky on this one." And he's like, "You got lucky or you were playing around the rim?" Right? So, basketball analogy, right? Like, hey, you're gonna get lucky more often if you're playing around the rim. Right? So if you're down there getting rebounds and you're playing by the rim, you're probably gonna put one in eventually. Right? And so even though that one definitely had an element of like I wasn't directly trying to buy his park and that was by far my best deal, that's how that one came. And that one I bought in September of 2022. And so I can continue from there. Basically, you want me to go into kind of the recent event, how the story ended, that two-park package?
0:19:11.3 Frank Rolfe: Yeah, let's go over that for a minute here. Okay, so here you are. You've had park number one and park number three, and then park number two that you're in the process of selling. Right? So we're not even gonna count park number two in the movie here, although I assume if you make a million profit and you've got partners in it, it's not a bad day, clearly. But let's talk about park number one and park number three, because that's what's really interesting here. So you get park one and park three, and you've owned park three now for what, three...
0:19:45.0 Surfer Dude: Park three, three and a half years. Yeah, three and a half years.
0:19:49.2 Frank Rolfe: Three and a half years. And you've owned park number one for what, like...
0:19:52.5 Surfer Dude: Seven years exactly. Seven years exactly.
0:19:56.4 Frank Rolfe: Okay. Right. And so a lot of people would think the end of the movie now is he's selling park number two, so we're about to say that you sold park number one and sold park number three. But that's not what happened. What Surfer Dude did, he did a cash-out refi. And what a cash-out refi means is if you buy a mobile home park and you can expand the net income by 50%, in other words, if it made $100,000 a year, if you could get up to $150,000 through raising rent, filling lots, cutting costs, based on the fact that banks typically lend at 70% loan to value, that means you would get all your money back. But in this case, he didn't just go up 50%. It's not just the story of cash-out refi where he gets his capital back. The other part of the movie is if you've done an exemplary job of pushing net income, when you go to do the cash-out refi, they're going to run a cap rate and they're going to do typically 70% loan to value based on appraisal. And he had bought these parks so well and had done everything correctly and raised the rent and managed the costs, that the wild ending of the movie and the big reveal here, kind of like if we were on a show on HGTV and now we're going to show the big reveal of the house after it's remodeled, is you were able to do a cash-out refi and take out how much, Surfer Dude?
0:21:16.3 Surfer Dude: Yeah, yep. $3.5 million. We got a $5 million dollar valuation.
0:21:20.6 Frank Rolfe: $3.5 million. So in other words...
0:21:23.9 Surfer Dude: Non-recourse.
0:21:24.2 Frank Rolfe: You were able to get three... Non-recourse and additionally tax-free for the most part, right?
0:22:42.6 Surfer Dude: Tax-free. Tax-free. Right. So...
0:22:42.9 Frank Rolfe: So that's quite a success story, I think we would all say. But that's not even the end of the movie, right? Because the other part of the movie is he still owns these two parks. So he is still going to manage them and bring in the money and pay the bills and pay the mortgage. But your spread is what? What do you anticipate your net income will be on these two parks despite getting $3.5 million dollars in your account, non-recourse, tax-free? How much additionally are you making annually on these two parks just from managing them?
0:22:43.2 Surfer Dude: Yeah. So depending on where the expenses land, they're still going to cash flow between $10,000 and $12,000 per month. Because they actually should have given me a $4 million dollar wire on the non-recourse note, but their last part of due diligence on their end is that they started calling a bunch of real estate brokers getting second opinions. So that didn't go my way even though the numbers made sense. But the only advantage to having the smaller loan amount of $3.5 million is that my cash flow is going to be much higher because I got five years interest only at 6.4%. And so I'm still going to cash flow between $10,000 or $12,000 a month and we're going to be pushing rents another $90 this summer.
0:22:43.5 Frank Rolfe: Right. So not only did you get $3.5 million dollars back, non-recourse, which means no one can ever take it away from you, and then additionally you're now making about $120,000 to $150,000 a year managing the parks. And then on top of that, the third element is within 10 years you can then either cash-out refi them again based on the new valuation or you can sell them, right?
0:22:55.2 Surfer Dude: Yep.
0:23:06.9 Frank Rolfe: So it's pretty much the best deal on earth, right?
0:23:09.2 Surfer Dude: Yeah. I mean, the return...
0:23:10.2 Frank Rolfe: You look at that and say, "No freaking way, that's impossible." Right.
0:23:13.4 Surfer Dude: The IRR is probably 40 to 50%, maybe 60% if you include cash flows that I made along the way, because my all-in was about $750,000 and we just got a value over $5 million in mixed ownership of about five years. And so that's still possible for people that are out there that are actually looking for the deals, combining a tremendous amount of volume with a tremendous amount of learning and they're really going for it. And again, especially in my perception, when you're still playing in that 30 to 50 lot game and you're not competing with people that are big, that are going for big deals, lower cap rates, that are going for 100, 200-plus lot parks. And especially because CMBS lets you package these things together typically if they're close, like my parks were about 15 minutes away from each other, but Starwood let me package them together, that becomes a great way to do it if you don't want to compete against everybody and their mother going after the same 100-lot, 200-lot park.
0:24:13.9 Frank Rolfe: Right. So now if you're a capitalist listening to this, your initial question would be, "This has got to be a fraud. There's no way you could do that well with a transaction, right? But let's talk about how it's possible. So if someone's listening to this, I can tell you right now, can you do this in multifamily? No. Could you do it in single family? No. Could you do it in retail? No. How about office? Not a chance. Storage? Uh-uh, never happening. There's no sector that this is possible in other than mobile home parks. Would you agree with that statement? Have you ever seen anybody else who can buy it for $700,000 and then have it reappraised at $5 million?
0:24:52.0 Surfer Dude: 100%. I mean, even the single families I was buying post the great financial crisis and I was buying these things for nothing, I never got a return like this.
0:25:00.5 Frank Rolfe: Right. So then the question people would have is, okay, if this is legit, if this isn't just some goofy made-up late-night TV infomercial, right, what caused that to occur? Well, simple. Number one, you bought them for less than the value when you bought them, right? Mom and pop wanted to sell them bad enough, they sold them at a bargain. That'd be step number one.
0:25:20.3 Surfer Dude: Yep.
0:25:20.9 Frank Rolfe: Number two, you pushed the rents a lot on them, right?
0:25:26.2 Surfer Dude: Yep.
0:25:26.4 Frank Rolfe: And I think you filled some vacancy along the way, did you not?
0:25:31.4 Surfer Dude: Yeah. Filled a few, but not much. Really only filled about six at park three.
0:25:34.5 Frank Rolfe: Yeah.
0:25:37.6 Surfer Dude: The first park was already 100% occupied.
0:25:40.0 Frank Rolfe: Yeah. So if you don't think this is attainable, call me, because I can give you hundreds of examples of mobile home park stories of this kind of metric of success. This is what mobile home parks are about. It's the final frontier of real estate where you can still go in and buy stuff way less than it's worth and then push that income up enormously just by applying good business standards. But if you're a socialist listening to this, you're gonna say, "Well, Surfer Dude must be enormously evil because there's no way you can make money like that unless you're evil." But let's dissect that for a minute, okay? In the entire story here, it's been a win-win for all parties involved. The seller wanted to sell badly, and so he saved the seller's day. He made the seller's day. That guy went out and he sold the mobile home park and he probably moved to Florida. And right now he's in a condo on the beach, looking out on the ocean, happy as can be. He didn't get harmed. And the tenants, they got the things then professionally managed, so their quality of life went up. I'm sure the parks prior to your ownership, as most mom-and-pops, they probably lost interest. Probably it was not the same style of living environment. And yes, the rents did go up.
0:26:51.5 Frank Rolfe: And remember, the rents have gone up a ton over the last seven years, right? I mean, during the Biden era alone, the cost of all goods went up by what, almost like 50%? So it's not like, oh, only mobile home park lot rents went up. So the tradeoff was they got what customers want, which is professional management, which means that the water really works, the roads don't have potholes, and they're willing to pay up for that. So no, sorry, they're happy with it. And then you might say, "Well, he must have ripped off the banks. That's it. The banks must be screwed." No, the banks can't be screwed in our industry because we're an income property business, right? So your loans were built on the actual income these parks provide. And then even then, they discount them by 30%. But yet if it was a rip-off, you wouldn't be stuck in them, right? If it was a rip-off, you wouldn't refinance, you'd sell them and run away. And on top of that, if it was a rip-off, you couldn't be making positive cash flow managing the parks. So that story for socialists is this is a win-win-win-win. There is actually no party in this movie that was in any way harmed or has any regrets about any of it at all.
0:28:01.7 Surfer Dude: Yeah, that's [0:28:01.9] ____
0:28:03.1 Frank Rolfe: Let's paint a picture on lifestyle for a minute, okay? Because back when you owned the parks, how much time did you expend on these parks? Were you just on the phone, going out there every day? How often were you out at the mobile home parks or doing anything with the mobile home parks?
0:28:20.4 Surfer Dude: Funny question. So, yeah, twice a year. Just because I make it a priority to go there twice a year. And I go there for basically a day just to take a look. And now it's basically like twice a year, but really I drive out there for like two hours. There's not much really to look at or happening. And that's essentially it. In terms of hours per week at this point, now that everything's 100% full, I mean, a couple hours maybe. I mean, you're just talking about license renewals, insurance renewals, stuff that's a couple hours a week, basically. When I was doing the turnaround on Park 2 with the park-owned homes and getting those rehabbed and sold, et cetera., that was a little bit more during that turnaround. But then once it was done, it's done. Coming from the sales business to just do something once and get recurring revenue forever, or for years and years, is pretty, pretty amazing. And so, yeah, the amount of time it takes is not much. And you don't really need to go there because if you have good management, people you trust, technology, et cetera., you can do a lot with pictures and FaceTime. To actually go there, even if your manager's freaking out, usually it's not a big deal. "Hey, send me some photos," and then you just figure it out. And so, yeah, in terms of workload, I mean, a couple hours a week at this point.
0:29:46.4 Frank Rolfe: Yeah. And I've been interviewing people on parks they've owned for 20, 25 years now. The standard response from most park owners I've interviewed, and I've done hundreds of interviews, is four hours a week. And does that sound about right? I mean, now your parks are stabilized if you average all together.
0:30:05.8 Surfer Dude: Yeah, if you were to average it all together, yeah, that would be about right.
0:30:08.4 Frank Rolfe: Okay. So the capitalist listening to this is saying, "Wait a minute, this is like the best industry ever because you can make a ton of money and it has very low management time." And that is entirely true, right? So you can't shoot it down. The socialist would say, "Now wait a minute now, hold the presses here. This is inherently unfair that Surfer Dude was able to buy a couple properties and pull $3.5 million out and make $120,000 to $150,000 a year and then have the ability to go out and do this all over again 10 years from now when the notes go up." And the answer to that is, yes, it is seemingly unfair, but only for those who don't try. Right? This opportunity is out there for anyone, whether you have a lot of capital, don't have any capital, done real estate, not done real estate before. I can give many examples of people who walked into the business stone cold, even more cold than you are because you at least had a sales background. I mean, I know people, I interviewed a woman who was a piano teacher at a college. You can't really get any more introverted than that, and she pulled off a home run. So I guess the bottom line is, maybe you should change your affiliation if you're socialist back to capitalist, because it's a whole lot more fun having lots of money in the bank and not sweating about life than the alternative. And you've got what, two kids, correct?
0:31:31.5 Surfer Dude: Two kids, yep. Five and three.
0:31:32.3 Frank Rolfe: Two kids, all right. Right. So you've got almost no time commitment at all. You have $3.5 million in the bank and you're making about $120,000 to $150,000. You're managing these parks that take you about two hours a week to manage, correct?
0:31:44.5 Surfer Dude: Pretty great. Yep, pretty great.
0:31:45.8 Frank Rolfe: So what's your life like, Surfer Dude? Because you do surf, right? You're a West Coast guy who likes surfing.
0:31:54.7 Surfer Dude: Yep.
0:31:55.5 Frank Rolfe: So what is a day in your life like today now that you've got this accomplished? Like, what are your biggest concerns or what do you do or how do you spend your time?
0:32:04.4 Surfer Dude: It's truly amazing. I have to pinch myself sometimes because there is no workday. Monday rolls around, it doesn't matter. Like I told you today, you're my only call this week. Not just today, this week. I get to spend mornings with my family and with my kids until 9:00, 9:30, 10:00 AM, and then I go to the gym for a couple hours, and then I eat lunch, and then I'll hop in front of the computer for a couple hours, and then I'm basically done.
0:32:38.5 Surfer Dude: It's pretty incredible, man. It's truly, truly like a dream. My wife doesn't have to work, I don't have to work. We never have to work again with our setup. And yeah just that... People say money only solves financial problems. I would make the argument that money does buy happiness if it's spent correctly. And so what I mean by that is if you spend it on lifestyle and the relieving of stress and the fact that we can enjoy the things that are most important, which is our hobbies and our family and our friends and our activities, then I would actually make the argument that money definitely can help you buy happiness. I don't think stuff buys happiness, but I think that money does when you're buying a lifestyle of low stress, low hassle, lots of time, lots of family, friends, leisure, hobbies, then that certainly helps. When people say money doesn't buy happiness, they're thinking about a Rolls-Royce or a Bentley or something like that. Those things will just become your car eventually. But when you use the money to buy freedom, I would argue that people died for freedom, right? So freedom absolutely increases happiness. And when you have financial autonomy, that's a noble pursuit worth fighting and giving everything for. And so that's why it all comes down to, like you always talk about, Frank, enthusiasm. And so even though I have a sales background, anybody can pull this off if you desire it. Desire is the conduit of creation and you can create it if you want it bad enough. And so that's what I would say there. And to the socialist point of view, I would say this. Even though my lot rents, it was funny because Starwood made me go back seven years with my rent roll from when I bought the first park, which I thought was weird, but I did it. Almost all 30 people that were there seven years ago at $330 lot rent are still there today at $600 lot rent plus utilities. Nobody has a gun to their head. Nobody's making them stay. A studio apartment that's 300 square feet in the same MSA rents out for $750 a month plus utilities.
0:34:48.0 Frank Rolfe: We have to really be aware of what we're comparing our product to. A lot of people get caught up in the other MH rent comps and stuff, and I do all that too. But it's like when you look at a two-bedroom apartment and a three-bedroom apartment and it's going for $1,200, $1,300, $1,600 a month in the same MSA, and even though I did a $90 rent raise last year and I'm doing the same this year, $600 bucks, I'm still a bargain. So in terms of everybody winning, absolutely. There's nowhere else they can live for this cheap where they have quiet, safe, affordable yard, detached housing, park in front of their front door, no neighbors knocking on their walls. They can do whatever they want to the inside of their home. It's just we have to be aware of the preeminent product that we have in the market and probably give ourselves more credit than we currently do.
0:35:38.8 Frank Rolfe: Absolutely. People ask me all the time, "Hey, how come you teach about mobile home parks? Why do you do that?" It's for stories like Surfer Dude's story here. Because I remember when he called me on the deal reviews. I remember when he called me on the cash-out refi thing. I mean, you got to love happy stories. America's filled with nothing but bad stories anymore. I mean, I don't care which news channel you watch, it's pretty terrible.
0:36:02.5 Frank Rolfe: But there still are good things going on if you put out the effort, take the gamble, if you learn what you're doing. America is filled with opportunity still. This is not a story from 20 years ago. This is a story from right now. This just happened. And so I thought it was important to get him on here just to let people know that you don't have to be depressed. You can still do great stuff with your life. You can have a great life. You can take control of your finances. It's all attainable. So if that sounds interesting to you, we'd love to have you look at the site at MHU, come to boot camp, go out, buy parks, be like Surfer Dude. But I just find it very exciting to have participated in his adventure here. And again, we appreciate you being on here because in a bleak world, we need a little optimism out here. This is a story most people won't talk about, their success in our industry, because of all the negative political issues today with socialism and everyone else. But if you are a socialist listening to this, you might want to change camps. Capitalism's a lot more fun, wouldn't you say, Surfer Dude? Is capitalism not a better way to go?
0:37:14.1 Surfer Dude: I couldn't agree more. And Frank, thank you for everything you've done for me. You've been an incredible mentor. And going to boot camp almost a decade ago, you guys know how good Frank is when you're learning from him, but his level of engagement and passion and willingness to help the little guy is truly astounding. You just don't find that in people. And so, Frank, I can never repay the debt that I owe to you for helping me, just some little guy going out there looking at little parks, trying to make it, and you still gave me the same level of effort that you give to everybody else. And so I just can't thank you enough.
0:37:54.3 Frank Rolfe: Well, I think when we started this adventure, the deal was if you ever succeeded, you were gonna send me a pizza. So I'm just looking forward to that pizza delivery sometime soon. And again, we appreciate everyone being here and listening to this very, very happy story. And again, if you're interested in mobile home parks, we'd love to help you, and just thanks everyone for being here. So thanks a lot, Surfer Dude, for sharing your story. It's an amazing story, and we hope to talk to everyone again soon.