Victory Day For Vijay And Sumeet

In World War II, V-Day was the day that Germany surrendered and victory was proclaimed. In this event, we interview Vijay and Sumeet on their victory in buying four parks in less than one year. Discussions include how they found each property, how they financed them, what the turn-around plan was, lessons learned, amount of time spent in managing them, and related topics that will be greatly of interest in evaluating whether or not to invest in mobile home parks.

The host is Frank Rolfe, who not only trained Vijay and Sumeet in the Mobile Home Park Investor’s Boot Camp, but also is the co-owner of the 5th largest portfolio of mobile home parks in the U.S. He will keep the discussion focused and lively and completely fact-filled.

We believe you will come away with a wide array of important information and perspectives, all crammed into roughly an hour.

Victory Day For Vijay And Sumeet - Transcript

Frank Rolfe: Welcome to our lecture series event, V-Day for Vijay and Sumeet. This is Frank Rolfe. I'm very glad to have everyone here. We're going to talk about two people who went to our boot camp. They went out in the marketplace, they found a mobile home park that they liked, and we're going to find out all about their journey so far in the mobile home park business. So Vijay and Sumeet, are you here with us?

Vijay: Yes.

Sumeet: Yeah, I'm here Frank. Thanks.

Frank Rolfe: Great. Well we're excited to have you here. So let's just start off with some very, very basic background. Vijay, I k now you're from Arizona. Sumeet, you're in New York. What got you interested in the whole mobile home park sector? Why would that even come to mind as something you would have any interest in at all?


Vijay: Sumeet and myself have been friends for 10 years. Five years ago we started a multi family development project together in the Midwest in Nebraska, an area we both lived. That project now five years later is nearing completion in September, roughly 100 apartment units. During that process, both the length of it and then also during the process in searching for other assets to acquire, apartments like a lot of asset classes now including mobile home parks, just a very competitive space. I might have also looked at outside of real estate, some other businesses to buy. My background a little bit varied, but in real estate development, in banking, and then worked for a family office for several years. I'm looking at the kind of durable business, something with a moat. Mobile home parks had been in the back of my mind for about a decade. I've got kind of emails to myself from 2010 to look into the industry. After Sumeet and I started looking for apartment complexes to buy, didn't really have a lot of luck. I said I'm going to do the boot camp, bite the bullet here and see if there's really something here. It's definitely one of the best decisions that I've ever made.


Frank Rolfe: All right. And let me ask you guys, in other words mobile home parks have a terrible stereotype. When I bought Glenhaven very first thing I thought was uh-oh, I need to get a pistol. I won't be safe in there. What were your initial just stereotypes about the industry? Surely in the past growing up, driving by mobile home parks, what did you think of the product itself? Were you frightened by it or were you okay with it? What were your thoughts?


Sumeet: My impression of the mobile home park industry was probably like everybody else's, Frank. You know also kind of like what you described with your first park. Had driven by a bunch of mobile home parks in your area. Kind of live in a rural area in New York so quite a few parks. But my wife was born in a mobile home. Not in a park per se but just in a mobile home itself so I knew what a mobile home looked like and her grandmother lived in a mobile home. I had some familiarity with the product, but we didn't have an intimate knowledge of what park life was all about.


Frank Rolfe: All right. Let me ask you just on the front end, so you had as most Americans do, kind of a poor image of the industry which is perfectly reasonable because the media always portrays it horrible. But what have you found so far as mobile home park owners? Does it fit the stereotype? Have you found the stereotype was wrong? How have your thoughts changed on the actual product itself? Not from a financial perspective, but just literally the product? How has that changed in the time you've owned parks?


Vijay: I think mine hasn't changed significantly. I would say across the four parks we own, just working under the belief trying to be positive that most people are good people, most people want to do the right thing, and everything in life is kind of just log numbers. You have enough tenants, you interact with enough people, you're going to have bad actors. Our parks are all roughly 50 to 60 pads. We largely have very good people, pay rent on time, want to do the right thing. But of course we've got evictions. Whether it's bad luck, fortune, or other issues in the park. Potentially the tenants may have a drug dealer in one of the parks, the proverbial drug dealer, but by and large it's been very positive. Like anything, there's a lot of misconceptions out there in a lot of different areas. Kind of looking an inch deep can uncover a lot of information that's contrary to popular belief or conventional wisdom which we know isn't always wisdom.


Sumeet: I've had a chance to walk all our parks. I feel very comfortable in all our parks. Haven't seen any kind of issues that would make me concerned at any time, day or night. I think we've been really fortunate in the parks that we have acquired that, like Vijay was saying by and large the tenants are really good people, they're hard working or they're retirees. I've just felt very comfortable and safe in all our parks, and happy to take people through our parks as well. And everybody feels very comfortable. So I haven't seen kind of the 8 Mile or kind of the typical things that people think about when they think about mobile home parks. I think we've been really, really lucky with our tenant base. It's been a really good experience so far.


Frank Rolfe: Good. So you had this interest in the mobile home park as an investment class, went to the boot camp, thought let's go out and look at a park. First off, what coming out of boot camp, let's start off with the region. What regions were you interested in? America you've got 50 states, 49 have parks in them, but even on a macro since there's entire regions. Where were you looking initially? Where did you want to buy something?


Vijay: I kind of grew up in the DC area, Sumeet grew up in Tennessee, and we both spent time in the Midwest and Nebraska for many years. We kind of had this common world view both really liked the Midwest, see a lot of value in the Midwest. I've been in Arizona for the last three years. Don't really see a lot of value and not a lot to be desired in certain aspects. So we initially looked at a park in Tennessee. We looked at it for quite a while and there were some infrastructure issues and pricing issues there and so tabled that. Then just really started focusing in kind of Nebraska, Iowa, South Dakota, and found our first park through a contact that I had done some business with before, a real estate broker.


Frank Rolfe: Okay, so you were looking for mostly kind of same markets we do, kind of Great Plains Midwest. Is that kind of what the region was?


Sumeet: Correct.


Frank Rolfe: Okay. Then before you even began the search, what kind of attributes were you looking for in a target park? Like what size, what condition, utilities? What was the game plan?


Vijay: We were following kind of the playbook from the boot camp, so 100,000 plus metro ideally. 1,000 plus, 3 bedroom rent. Public utilities again in an ideal park, reasonable density, all of that is not a deal breaker so 7 or 10 pads per acre. School systems, would the park do well in a test ad so how are the school systems in the market. Then obviously a park that's not being widely marketed and sold by an institutional broker.


Frank Rolfe: Gotcha. All right, so you guys have purchased how many parks since you went to the boot camp back in July of '20, how many have you bought so far?


Vijay: We're at four parks.


Frank Rolfe: Okay. So let's break down each of those individually, so let's start with park number one. What state was the first park you bought located in?


Sumeet: Nebraska.


Frank Rolfe: Nebraska, okay. So tell people the story of that first park. Give us like the details of the size, number of park owned homes, how the water sewer was built, all that kind of stuff.


Vijay: Park is 46 pads, two stick built homes, commercial building. Public water and sewer. No park owned homes so 46 tenant owned homes. 100% occupancy. Very good density of kind of on 14 acres. Mom and pop owned. Had been in the family for over 50 years, new apartments across the street just went up in the last 12 months. Good school system, so really met and checked all the boxes.


Frank Rolfe: Gotcha. How did you find this one? Was it from a broker or cold call? How did this come on your radar?


Vijay: This was a broker who is a commercial real estate broker in the market. Has been in the market for 30 years, very well connected. Never sold a park in his 30 year career. I had done a couple small transactions with him in the past, known him upwards of 10 years. Even going into the boot camp and then during the boot camp just reached out to a handful of brokers I know and just said if you guys come across any parks very serious and would like to buy something in this market.


Frank Rolfe: And then how did you finance this first park? Was it seller carry or bank debt? What was the financing source?


Sumeet: We had bank debt on this deal.


Frank Rolfe: All right. So and I guess the turnaround on this was just what just raising rent? Was there water/sewer bill back or what were your key drivers on this first property?


Sumeet: We believed the market rent was really low. The market rent was high for the area but this park was particularly low, probably about $150 below market. Mom and pop had a long history of kind of having good water use through the city. That kind of had not been ever capitalized on. So we went ahead and sub-metered the park and billed back water/sewer. That was kind of our other game plan for this park.


Frank Rolfe: Okay. So just a straight up plan of buying this thing. It sounds like very clean park, city water, city sewer, no park owned homes. Totally full so the plan is just bill back water/sewer, raise rent which would increase your NOI by roughly $200 a pad a month, correct?


Vijay: Correct.


Frank Rolfe: Okay, which times 46 is obviously going to have a really happy ending so that's a pretty simple deal. Then what was the second state that you bought a park in?


Vijay: Second park was in South Dakota.


Frank Rolfe: South Dakota, okay. Then tell us the details in that park. How big and city water, et cetera.


Vijay: 55 pads, 39 occupied, city water/sewer. The tenants were paying utilities through a lump system. Lot rents kind of below market. Pretty well located, 3 miles from downtown area. Met all the basics of metro population. Several hundred thousand 3 bedroom home price of $1,150 or $1,200. Good school systems, nearby parks.


Frank Rolfe: Okay. And how did that one come on your radar screen? Where did that come from?


Sumeet: That was through another broker when we were in the apartment hunting game. We had come across a broker in the city and just had kept in touch with him. Again, just kind of talking to him pretty frequently about apartments at that time. Then mentioned to him that we were getting into mobile home parks and turned out he was really interested in mobile home parks himself as a broker. He presented us with kind of a deal off market that he had come across through a seller that he knew well. Kind of just transitioned from buying apartments from him to buying mobile home park from him.


Frank Rolfe: All right. On that one then I guess the turnaround plan is since you're already getting water/sewer bill back it really is raising rent, filling lots correct?


Sumeet: Exactly.


Frank Rolfe: That one you have a little extra dimension of not only increasing NOI which you already have, but then additionally increasing NOI by bringing more homes in. On the homes you bring in, do you have any idea at this point are you bringing new homes, used homes? What's the plan on that?


Sumeet: We've got kind of a combination plan in mind. We've already started with some used homes and we'll bring in some new homes through 21st Mortgage.


Frank Rolfe: Gotcha, okay. All right. And then as far as under market rent, how much under market do you think they are?


Vijay: About $100.


Frank Rolfe: About $100, okay. That makes complete sense. So then what was the third state you bought a park in?


Vijay: The third and fourth park were spawned off the first park. The third park was in Iowa. The broker on park one worked with a broker in his office for this park three that had a client who owned a park, was maybe interested in selling. The broker, his colleague pointed us to this park which we'll revisit here sequentially, but the fourth park was referred to by the appraiser on the first park, the first deal on that appraiser for one of the large brokerage houses. They were getting an REO park in South Dakota and that was park four. So really the first deal spawned three deals.


Frank Rolfe: Gotcha, which is how it goes in life, these things all tie back in some mystical way right. It's kind of strange. It's like American history itself, you look back at all the people like Daniel Boone et cetera, they all end up having met each other earlier on in their career out in the wilderness somewhere. So this seems it's always a small world here. And I forgot to ask you on the South Dakota park, how did you all finance park two? Was it bank, seller, combo, what was the park financing plan?


Sumeet: That was bank financing as well.


Frank Rolfe: Bank financing, okay. Now let's move on to the Iowa park. What were the speccs on the Iowa park?


Vijay: 68 lots, 65 occupied. Rent somewhere between $100 and $150 under market. City water/sewer. A decent density. A large parcel. It's kind of a 30 acre parcel although only a portion of it is used for the park. Good school system, $170-180,000 median home price. $1,150 3 bedroom rents. X Factor on that is park gave us some heartburn was a large Lonnie dealer in this park, and yeah met most or all of the basic requirements.


Frank Rolfe: What was the lending source? Was it seller, bank , or how did that work?


Vijay: This was a bank. All four deals were bank debt, five year term, roughly 4% interest. 20 to 25 year AM for three of them and then one was shorter.


Frank Rolfe: All right. What about the fourth park which was I guess back to South Dakota, what were the speccs on that?


Sumeet: That was 45 pads, 22 occupied, had a duplex on it. City water/sewer. Again like three miles from downtown or two miles from downtown, just really good location. Next to a nice elementary school. Lot rents there were probably $50 below market, but just kind of the plan there was to raise rents eventually and then also to in-fill the park. They also really weren't paying utilities, water/sewer, so we were going to plan on billing back water/sewer which we've done.


Frank Rolfe: All right. So right off the bat guys when you look at these four parks, park number one just on the rent raising there's over $1 million of value you can create out of that one deal. Park number two just on the rent raising there's $1 million of value in that deal. Park number three, same story. Park number four obviously that one is the most challenged of the four because you've got to do a lot of occupancy increase, but clearly there's at least $1 million of value and pretty easy flight plan on all four properties.

That would beg the question of anyone listening is how in the world did you find four parks of that quality? Because you have city water/sewer on all of them. You have the right size on all of them. You have stabilized occupancy on three of the four. All the bells and whistles, you're way under market. You can harvest $1 million just on rent increase alone. So how in the world did you pull that off? Some people are going to say wow that's crazy they were able to find four like that in such a short span of time. We're talking only July of 2020 to now, you're not even at a year. How did you pull this off? What was your magic skill or are there just enough parks out there that you were able to find them because they're around? How did you do this?


Vijay: Prayer. No, I mean I would say a couple of things. I've thought a lot about this and we haven't put a park under contract in four or five months now and had a very quick first three or four months. Psychologically I'm wondering are we ever going to be able to buy a park again, and Sumeet laughs. But I think when I look at it, I'd say one you kind of have to swing to hit. You have to be in the market to get lucky. You have to be in the market to stumble upon that deal at the right time. We made the commitment kind of in July that we were going to buy parks. Talked to everybody we knew that we thought may be able to help us. Attorneys, appraisers, bankers, brokers, spouses, family members that we're going to buy parks. I think that's part of it.

I think the second thing that I would mention is just in terms of four parks in six, seven, eight months is definitely the team. Because I don't think either of us could have done this alone. If you can work with somebody that totally has buy-in, that you can call it’s not 9-5 Monday to Friday. I think someone who is always available that just cares, it definitely is much easier to build a business when weekends are available, at 6 a.m. and 9 p.m. That has its own benefits and costs, but I would say just that the partner has just been huge.


Sumeet: I would echo that. I think one of the common themes too is we just had long term relationships with certain people that really did favor us as we were getting into the park business. We had no intention of ever buying a park from these people five or 10 years ago, as long as we had known them. But as soon as we decided to really focus on parks and having those relationships, came back I think in a positive way. We just all believe in treating people well and so I think it's just maybe a little bit of good karma coming back in some ways, but also just being really active and hungry, and just you know constant with these people to try and get deals.


Frank Rolfe: Would you guys say for someone listening who is considering the mobile home park business, would you say there's still opportunity out there based on your example? Or were you just the world's greatest park buyers of all time?


Sumeet: No, I don't think we're the world's greatest park buyers. I think we got a little lucky which is good. No, there are parks out there for sure. Like I said, a little bit more pessimistic than I am but moving forward… We both believe that things will continue to be rosy in terms of finding deals, putting them under contract, doing the due diligence. We feel like there are parks out there still for guys like us who are just coming out of boot camp, and obviously the bigger players are out there too.


Vijay: We feel the opportunity is huge, and it's going to be that way for a while. You know Sumeet in New York State, we've kind of looked literally quite nationally in 49 states, not looking New York as maybe the one ironically. Arizona has its own maybe challenges, so maybe we can land a park in a non-outside of Maricopa County. But haven't really looked here. A little bit of a disadvantage has been not living… I mean if we were living in a market like in the Midwest where you have 1,000 or 2,000 parks, I would be driving these streets every day personally. Looking to maybe that change or do I relocate, do we relocate. Also, echo Sumeet's comment about karma. We make every effort to be transparent, honest, and absolutely responsive. Because we've all dealt with people that don't operate that way. I don't personally care for it. I know Sumeet is huge integrity. So I do think that the broker that helped us on that first deal, we've been fairly good to him for a very long time.


Frank Rolfe: It sounds like you guys are fully engaged in the concept of win/win deal making which is the same thing that Dave and I do. When you do win/win good things seem to happen because the word of mouth spreads. People like working with you and they tell others, so that helps. Since you're a win/win group, if you had been a win/lose negotiator or win/lose business person you probably would have ended up with maybe park number one, because the broker would say I can't stand these guys and don't want to work with them again. The seller would tell all their friends, tell everyone never sell a park to these people. Obviously that helps contribute right?


Sumeet: Right, right.


Frank Rolfe: Okay. So tell me what was your scariest, most difficult moment on the due diligence on these four parks. At what point on one of them did you think yeah I don't know if I want to buy this anymore? Did you have any strange potholes, cliffhangers, weird things, phase one issues, survey problems? Anything that freaked you out on the diligence side?


Sumeet: I guess I could say from my standpoint, and Vijay may have a different moment, but from my standpoint the first park we ever bought. It's a very scary moment when you're buying that first park to begin with because you've never done it before. We followed all the things that you recommended and did the phase one and all the rest, the survey and et cetera. But I think we were maybe a day or two before close and I had been in constant contact with the city water guy just to kind of get an idea of the water usage, just to make sure things were as they were being reported. Like I said, they weren't billing back the water and sewer at this point so I wanted to get a handle on what the water and sewer expenses were.

I think maybe two days before we were supposed to close, the water guy from the city called me and he said, "There's a huge amount of water leaks in this park. It has spiked to an absurd amount of water." By the way, we're like the highest water user in this city so they keep an eye on our park pretty closely. And he called us and he said that usage has just gone astronomically high. So kind of finding the issue a day or two before close was kind of nerve-wracking, and really the story was we thought maybe the whole park had to be kind of redone, but I know you had said in your experience you'd only had one park in all your parks that had to actually be re-piped. So I kind of felt good that probably wasn't the case, but we did have to get to the bottom of it.

The seller did actually figure it out before we closed, and it was just a water line had broken. So that was kind of my little bit of a nerve-wracking moment but nothing too crazy. We were still going to buy the park pretty much regardless of what you mentioned. We could raise rents and we could bill back water/sewer and it was already occupied, all kind of perfect setup otherwise. But that was kind of my personal nerve-wracking moment.


Vijay: I would say that was a memorable moment. Dealing with a Lonnie dealer in deal three, occupies half the park. On the flip said, lot rents are incredibly low relative to market. The park was also a flip from somebody who bought it fairly recently so that was a huge red flag. So that park raised, the Lonnie dealer, had to handle that Lonnie dealer and so we ultimately papers and agreement with the Lonnie dealer where they couldn't move the homes out of the park for a certain amount of time. We in exchange for that period kind of capped the rent increases. We had no indication that Lonnie dealer would ever leave. We didn't think they would leave with the age and condition of the homes, looking at how long the tenants had been there, the cost to move homes, the lack of availability of who could move them, the lack of ability of a park to move them to. But when they're 50-55% of the park definitely cause for concern because other than that Lonnie dealer, everything about that park was great and in this metro didn't feel like we'd have too many opportunities to buy parks.


Frank Rolfe: Gotcha, okay. And what, since you bought these four, what's your scariest moment been in operating them? Have you had any day where you're like man, that was the worst day ever? Like a resident sue you over the rent or any horrible stories on that?


Vijay: No real horrible stories. I can tell you in the last week, evicting a tenant from one park. We gave them plenty of chances. We gave them an extra month. We try to really work with people and just be reasonable. I would guess more than market or what a lot of other people would do. But this tenant shows up with an attorney in an eviction and said he has never been able to reach us, and just totally not true. So that was three hours ago got that call, but that doesn’t really… it's not really scary.

One of the two parks in South Dakota we had a plumbing inspection, everything done, survey, the phase one, and then plumbing repair occurred two weeks ago and we were told the park, part of the piping is orange work. You know sitting there looking and I'm like how could that be orange work? I'm almost certain we had that inspection done by the plumber. Sumeet and I were discussing it and called the plumbing company and they said one portion of the piping of that park was orange work but the rest is PVC. So that was at least a little bit of a relief, but at some point we were just juggling so many balls and just kind of trying to keep these places that we were worried we just forgot to have that done.


Sumeet: I think our winter was a little bit rough in the Midwest this year which led to a lot of infrastructure issues. We had one sewer line blockage, we had a couple water lines that decided to freeze over and then burst. Had some infrastructure issues. One of our parks in South Dakota, they found that maybe some kids or an adult or whoever had really wanted to get to the infrastructure of the park had dropped a couple of broomsticks down the sewer line manhole cover, so that was an expensive fix. But things like that I guess were probably the winter was really rough in that way where you're kind of thinking is this ever going to end, day after day some water line issue or sewer blockage, or whatever it may be.


Frank Rolfe: Then what was your best moment ever? At what moment did you say man am I glad I got in the mobile home park business, or man am I glad I bought that park? Any good stories?


Vijay: Yeah. In the past week or so through Rent Manager, which we're kind of learning by the day and really like the program, we've kind of used their VPO - virtual post office - feature. Get it set up, press one after the water meters are installed. Meters are reading correctly on that first park, everything is set up, and so kind of hit send and our invoices went out. Just kind of realizing some of techs efficiencies in the management side of the business. Small victories since we're only a couple hundred pads. Sumeet and I are doing it all ourselves so that's another kind of impetus to scale is just to be able to hire a little bit of help on that end.


Frank Rolfe: Gotcha. So you use Rent Manager the same way we use them, so you're also on Rent Manager correct?


Sumeet: yes.


Frank Rolfe: And are you guys using the VOIP system to record incoming calls and all that different stuff?


Vijay: We have not gotten to that level, but anything you do we want to do.


Frank Rolfe: Okay. Rent Manager has so much potential that no one realizes it has, it's crazy. I think the average person using Rent Manager only uses maybe 20% of its capability, and we keep finding more stuff it actually does which is crazy. But yeah, you can actually, and like who is calling they have an internal rent management thing that will record all the calls coming into your office if you just set it up. It's amazing. So it will tell you how many calls you had. It will even tell you effectively how many of those were answered. It's wild stuff going on. So how much time would you say you spend per week managing these four parks total would you think? Just as far as watching the gauges, making sure the manager is logging the rent correctly, writing checks? About how many hours a week would you say?


Vijay: I would say it varies widely obviously and maybe a little bit more because of the Rent Manager onboarding. We're still learning Rent Manager, but probably for me right now two to three hours a day. I'd probably say like 15 hours a week, something like that.


Frank Rolfe: Okay, so probably about four hours a park.


Vijay: Something like that, and then Sumeet as well.


Frank Rolfe: Gotcha, okay. Tell me as far as the lessons learned. So what key lessons learned? If you think back to when you got in the business and you had some ideas back then of what it might be like and stuff, through today, what are some of the key things that you've learned that were moments in which you said a-ha this is entirely different than what I thought? Or whoa this is the way to do this? What have been your big brainstorms that you found so far?


Sumeet: I think for me one of the things I've really noticed in our parks is the strength of your onsite manager really makes your life easier or harder . We found that we got our first park, we found a great manager. He lives onsite, just totally checked in with the tenants and does things right. He's an educated guy, he knows what he's doing. The strength of our team, the manager that we've got onsite that really does make our lives easier. Then we've got other parks where we have to be more involved day to day, just because we don't have as strong a manager. I think really that manager piece is something that I've taken a lesson from so far more than I would have appreciated before.


Frank Rolfe: What about on the buying side? Any lessons learned on the parks you bought? Do you like the current size you're buying? Do you like the attributes they've got? Any thoughts on the actual physical product itself?


Vijay: We love the public water/sewer. Really no park owned homes across the portfolio. We're lucky in that regard. I think size kind of running 40 to 70 pads, really like that size. That's really a product of where we've been able to be competitive. We would like larger parks like most buyers, but if all of our parks are 40 to 70 pads I think we'd be totally happy continuing to acquire solely in that space. Trying to build that network of brokers, have them have confidence in us that we can close and do what we say we're going to do and all the things that we would want if we were in their shoes, and not waste their time. It has definitely been very positive kind of meeting people in this community, in mobile home parks.


Frank Rolfe: Any lessons learned as far as the regions that you're in? Do you still like states like Nebraska, South Dakota, Iowa? Still happy with those, happy with that region?


Sumeet: Yeah, we're super happy with it. We knew the region before we bought parks, but obviously hadn't dealt with a lot of tenants. I think we've been really pleased with kind of the tenant base, the stability, the dependability of their payments. We just, I'd say the only thing I would say negative is how cold it gets. Like I said, it can cause some infrastructure issues, but outside of that we really like the area that we're in. we like the people that are there, so we've got nothing but positive things to say.


Frank Rolfe: Gotcha. So really from a lessons learned perspective it's been going extremely smooth and according to plan for the most part. [38;44]

Sumeet: For the most part, yes.


Frank Rolfe: Okay. And then let's talk about plan. So what is the future plan? How big are you trying to grow it? Do you have any goals on size or anything like that at this point?


Vijay: I think we've got a common kind of desire and vision. Just we like kind of build mentality. Having financial security and independence like most things is terrific, and amazing characteristics, and a byproduct. But I think we both look forward to just building. To some degree, probably limited by deals and capital as we seemingly see parks being marketed by the month at higher and higher prices, just wondering where the future of the industry is going. We think it's incredibly positive, if you're a buyer, you're going to be forced to pay higher and higher prices over time given the liquidity of the asset, the "financability" of it, all of those factors which make it such an attractive asset.

We're also looking to expand outside of the Midwest. If we could buy all of our parks in four or five states in the Midwest we'd be totally happy with it, but not sure if we'd be limiting ourselves in terms of opportunities. When those opportunities become available who knows, so we looked at east coast, southwest, southeast. I think we're pretty flexible in terms of where to buy.


Frank Rolfe: Okay. Since so Vijay you're in Arizona and Sumeet you're in New York. People might ask well how come you don't just buy within a four or five hour radius of where you are there. What are your thoughts on those markets, because you're not… the parks you have now are in no way near where you live. Has that been a concern for you or are you just you don't see any tie in between where you live and where you want to invest?


Sumeet: I think coming out of the boot camp we knew that New York was probably not the first state we would look into buying parks, just based on historical issues in New York and rent control, taxes in New York have always been quite high. New York, drive a four or five hour radius just didn't want to be in the northeast again to start. We preferred areas that we kind of had more connections to and that was in the Midwest. Vijay being in Arizona, a hyper competitive market, insane pricing for a lot of parks there. It was just kind of one of those things that we'll still look in these areas, but we didn't really choose them as our first option I guess.


Frank Rolfe: Gotcha. Let's talk about the industry itself going forward. When you talk to people, do you tell them you own trailer parks, mobile home parks, or manufactured home communities? What are the normal words that you say in regular conversation?


Vijay: I say mobile home park.


Sumeet: Yeah.


Vijay: I don't know if I've ever used "manufactured housing community." That's obviously technically correct, but I don't necessarily have anything against it, but I say the common parlance is mobile home park.


Frank Rolfe: Yeah, it's those crazy guys that if you had been to an industry event just a few years ago, that was their number one most important topic in the world was that we could no longer ever say the word mobile home park. In fact I was ostracized. I was banned from speaking at any future MHI event because I refused to pander to the concept that we could only say "manufactured home community" because no one says those words. Yet you see just since you went to boot camp or slightly before that, John Oliver's take on the industry that all park owners are evil, and inherently evil. Do you see this as an evil industry? Are we doing good? Are we bringing old parks back to life? What is your take on this dialog that has run through society now of capitalism/socialism regarding mobile home parks? Are we doing good things bringing these parks back to life or are we supposed to not do that? How do you see all these issues now that you're park owners?


Sumeet: I really feel we are bringing parks back to life. Some parks are already great. We know that and they're out there, and they look like neighborhoods. You'd be just as comfortable there as you would any neighborhood in America, but we've got parks in our portfolio that we are bringing back to life. For example, one of our parks we're putting in new roads. Those roads haven't been touched in 40 years, and those tenants have been driving over terrible roads for 40 years or 20 years or whatever it may be. I think we're putting in capital to make the infrastructure more appealing. Landscaping, fencing, all the stuff that you kind of taught us. I think that it's going to bring a better quality of life to those tenants.

So I think the industry is great. I think we're making a life for people that is comfortable and safe, and affordable. So all those things I think are positive. We see the demand is not really slowing down anytime soon for affordable housing in our markets, and many markets around the country. I have nothing but positive things and feelings about what we're doing in our parks to really kind of turn them around if they need to be turned around, or infill them, or make them look more beautiful, or whatever it may be.


Vijay: I echo that. The housing crisis that's going on in this country, parks there's just a lot of misconceptions and people that have misconceptions never really put in the effort to actually understand what's going on. I've toured parks down here in Arizona. Carlisle bought four large parks down here in the last 12 months. Those parks, they're incredible. So obviously our first park was family owned for 70 years, incredible. All tenant owned homes, great infrastructure, great location. I would personally live in that park with no problem. I'd live in that park and keep the door unlocked. And great people live there. I think as an industry if we can kind of work together to alleviate or address some of these misconceptions I think everybody would be better off, including the tenants because it doesn't really do them a favor for all these stigmas to be out there.


Frank Rolfe: I agree. What do you think about the product itself? If you had a crystal ball, where do you see the mobile home park product being 50 years from now? Do you think it'll still look like it does now? Would it be tiny homes? Would it be young people? If you look at the parks, like the parks you've got and you look at photos of when they were built, they probably don't really resemble how the parks look today. The homes are different, cars are different, people were different. So these things do grow over time, typically for the better.

I've rarely seen a before and after picture of a park, even in its zenith in the 60s, that didn't look better today. Because the homes were kind of goofy looking back then. They didn't have washers and dryers, and it was a little different kind of living back then. But at the same time, we're as fully advanced as we could be. I'm not for example impressed with what mobile homes look like on the outside. I think there's still big room for improvement on that. But where do you see this 50 years from now? If we were having the same conversation in 2071 and I said, "So did you ever think it would be this way back in 2021?" Where do you see things going and changing, or do you think we're at the peak right now? What do you think as far as the actual product?


Sumeet: I think the product can definitely improve. I think in 50 years the home will look even better than it does today. Like you mentioned, Frank, if you look at a home from today versus 50 years ago or 40 years ago, these homes do look better. Technology has improved them. Shingle roofs, vinyl siding. I think we're going to continue to see an improvement in the quality of the home. If you go in a new home today some of the interiors look absolutely fantastic, and comparable to any stick built home out there. I think that s the floor plans may get better, the interiors will continue to improve and evolve, the exteriors as well. I think as new materials and new technology shows up, the homes are going to get better and better.

I think a lot more parks are going to be rehabilitated. We know there's only a limited amount that can be built new, if any. So I think the ones that are there are going to continue to be bought and purchased by people who have a vested interest in seeing the community improve. I think that's what we're going to see moving forward is just the quality of the communities are going to get better I think.


Frank Rolfe: Do you think the industry's reach will change over time? Do you think we can re-attract younger people into this product? Or have you already seen a lot of younger people in the parks you have now? Do you think the client base will change or morph over time?


Vijay: We've seen more young people than I thought we would. It would make sense to me to see stigmas hopefully go away over time for parks, and they're more widely accepted, and really better understood. Understanding I just the key. I can definitely kind of see the parks catering to a much wider audience, whether that's younger people or whatever segment of the demographic you're talking about. [49;56]

Frank Rolfe: Have you ever had one of those moments where you're in one of your properties and you saw something that was so startling that it just blew your mind? My two were one property I was driving through in Illinois. This is a very old property we brought back to life, but still it had pretty rough and tumble customers. And so I'm sitting in the car, on the phone, in the park and suddenly a guy walks out of a mobile home and he is dressed literally like something off the cover of the preppy handbook. He had on khaki pants, a button down shirt, a blue blazer, and Sperry topsiders. Walks out of the home, gets in the car, and it blew me away. I thought I have literally the Brooks Brothers catalog guy living in the park, that was the one time.

The other time I was driving through the park and I saw some kids having a tea party that was decked out straight out of the Neiman Marcus catalog. I mean it had everything. Candelabra on the table, the kind of willowy princess tent thing over it. It was absolutely insane. It looked like something out of a Mackenzie Child catalog, and again I was blown away. Do you ever have those moments? Do you ever see in your parks moments where you're stereotype, the average American stereotype would be so phenomenally crushed that it would make people… just blow them away? Have you had those moments yet or am I the only that has had that so far?


Vijay: Yeah. I think plenty of those moments. I would say just the quality and kindness of some of our tenants. One tenant had skirting taken off for some work under their trailer and it wasn't put back on correctly. Was kind of thrown in the yard, maybe inadvertently so he called very upset, and his grandfather had given him the home, and kind of been in the family for a few decades. He just felt he was kind of disrespected by this third party vendor. Kind of got to know him, apologized, do whatever we can to replace it.

Kind of come to find out he's got extensive plumbing and handyman skills. If anybody else needs help in the park or you guys need any help on stick built properties, I'm happy to help you, just give me a call. Here's the best way to reach me, here's my hours. I was blown away. I mean I haven't come across too many people like that outside of mobile home parks. And there's a couple stories like that. Small data set, but I think a lot of people would just be shocked.


Sumeet: That same guy just happens to be super generous also mows a number of people's yards for them. We had another guy in another park who plows a little area for other people in the winter with his little riding lawnmower with a plow on it. There are those people in the parks that you find that are just really truly fantastic people that are generous and altruistic.


Frank Rolfe: Okay guys. And on that note, what about the fellowship of community owners? And I don't know how many of your… you've obviously talked to at least four because you've bought from them, but you probably have talked to others. You may have talked to neighboring community owners to where you're located at, on such items as a home rehab or evictions attorney. Have you ever met a nicer group of people than park owners? Or has your experience not been like that? What do you find as far as that strange fellowship of the trailer park that all owners are kind of involved in?


Vijay: Yeah, it's been fantastic. I haven't met a nicer group of people anywhere else, whether it's in office building in downtown Washington DC or with the development team, or whatever. I know for Sumeet and others he's lived and worked, it's incredible. I think there's a lot of misconceptions to be broken down.


Sumeet: I think we've actually bonded a lot with these sellers as you talk about. Even after the sale, we still communicate very frequently. They don't have other parks to sell us. We're not looking for anything to gain from continuing the relationship, but they've just been really, really helpful even after the sale if we've got a question, or just want to talk parks, or the way they did something or whatever. They've just been more than generous. I feel like it's been a really good relationship that we've experienced. We reach out to all kinds of park owners around the country because we just want to keep forming relationships, and maybe one day they'll want to sell and we'll be somebody they want to sell to.

We really just kind of tried to connect with as many park owners as we can around the country, and have found that they've been really helpful, nice to speak with. We've shared stories, learned about their business, what we could take from that and use in our business. It's just been back and forth really helpful. We try to help those who, we're a little bit ahead of as well. It's just a good group of folks that we've come across.


Frank Rolfe: I agree. And because of that don't you find it a little offensive when people in the media portray community owners as mean and evil? I'm still to meet the mean and evil community owner, right? When I was in the billboard business, sure, everyone in the billboard business, many of them were mean and evil and would try and rip off anybody for $1. But I don't really see that in this industry. So would you guys agree with that? The industry has just a terrible bad stereotype for no earthly reason.


Vijay: Yeah, absolutely. I mean part of what I feel like the fight is to some degree is just financial literacy. Financial literacy is just such a problem in the US, I mean everywhere. It doesn't matter if someone went to college or didn't go to college, or they have a graduate degree or if they're a brain surgeon or whatever. Financial literacy is just rampant. So to tell somebody lot rents were X 30 or 40 years ago, they should be Y today, the concept of inflation, this is what the concept of inflation is, how it effects this nominal value today, I think there's just a lot that just does not register with certain people. Just to kind of some of them if they just took a second and breathe, and kind of look through the economics, what are the alternatives. Owning a park is not free. You get gross rent, you've got expenses to pay. I think there's just maybe a wider problem that's kind of at hand as well.


Frank Rolfe: Yeah, I totally agree. Well guys, you've been so nice to be on here telling people about the industry and what it's really like. Let me ask you this. If someone was to listen to this, wanted you to give them either a thumbs up, a thumbs down, or a thumbs wavering as far as getting into the industry what would it be? Thumbs up, wavering, or thumbs down?


Sumeet: Two big thumbs up as far as my perspective, and Vijay is very inline with my thoughts. But yeah, it's been a great industry so far to us Frank. We've only been in it less than a year, but I couldn't be more proud to be a park owner.


Vijay: 100% and Frank, I mean thank you. Profound thanks. We talk about you every day. We ask ourselves, "What would Frank do?" We try to find the podcast that references the issue at hand, so none of it would have happened without your boot camp, without you. There's just no chance. We wouldn't own any parks and we would have never gotten into the business.


Frank Rolfe: Guys, I appreciate that. Again, everything goes full circle. As all these communities get brought back to life it improves the value of the industry as a whole. It has always been our intent to get the industry the same level of respect as apartment, which you guys note you've been in that industry. A lot of it because it has had the worst PR ever as far as national group, and the other part being there were many decades where community owners let the properties fall into horrible condition. I've bought those, and I know by now you guys have also bought those.

So we're just hoping the industry can ultimately get a better rap based on what it deserves for making them better. Everyone kind of plays off each other. You improve a community. We also own communities in the states you're in, and if your communities look nicer then it makes people more positive about the industry, makes them more likely to move into a mobile home park, maybe the ones that we own. It really all collectively ties together I think in the end. You guys found those parks to begin with, it's a small world and everything is kind of tied together.

Let me ask you this, is somebody has a question again on your specific story, if they were to email us the question and we send it off, would you be okay with answering questions from people listening to this who might have a question just on your story or your experience in Nebraska, South Dakota, and Iowa? Would that be okay.


Sumeet: Yeah, absolutely.


Vijay: Absolutely.


Frank Rolfe: Okay. We really appreciate that. Again, we appreciate you taking the time out of your busy schedule to be here, to talk about the industry because it's an unusual topic that most people don't know anything about, and obviously the average person has the same negative stereotypes that you shared, that I shared early on but people just got to know it better they would find it to be an entirely different thing in reality than it is in the unfortunate stereotypes and myths that it has. So that pretty much concludes this lecture series event. Again, we appreciate everyone for taking the time to be here with us. If you have any questions for Vijay or Sumeet feel free to email them to Brandon, he can pass them on. Again guys, really appreciate you taking the time. Thanks everyone for being here, and we'll talk to everyone again soon.


Vijay: Thank you. Thanks Frank.


Frank Rolfe: Thanks.