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  • Andrew Keel

Interview with Brady Hanna and Jeff Boor of Legacy Investments Group




SHOW NOTES


Welcome back to the Passive Mobile Home Park Investing Podcast, hosted by Andrew Keel. On this episode of the Passive Mobile Home Park Investing Podcast, Andrew talks with Brady Hanna and Jeff Boor of Legacy Investments Group. In today’s lively conversation, Andrew, Brady, and Jeff talk about their journey into manufactured housing community management. The guys discuss everything from attending Frank and Dave’s MHU (Mobile Home University) Bootcamp, to how Brady and Jeff operate the day to day operations in their business. Brady and Jeff bring their unique experiences and interesting case studies to share with listeners. They also share their advice on how best to get into the mobile home park business, along with their secrets to success.


Just a few months ago, Brady retired from the corporate world, where he worked as Executive Vice President for a Financial Services company for over 15 years. He helped build that company from 4 employees to over 120 employees with an annual revenue of $60M. While working to build that company, Brady was also building-up a portfolio of rental properties. He started a successful flipping and wholesaling business, built new construction homes and acquired 5 mobile home parks with his partner Jeff Boor. Jeff has a background in corporate consulting where he consulted Fortune 500 companies on implementing projects for over 20 years, before escaping from the rat race & retiring. During his consulting days, Jeff built up a portfolio of single family rental houses and now runs the operations for the mobile home parks. He has been in real estate for over 13 years, owns 10+ SFR’s, and finally retired form the rat race to manage the portfolio. Over the last year Jeff & Brady have filled over 50 lots in their mobile home park’s as they specialize in turning around neglected parks through value add initiatives.


Andrew Keel is the owner of Keel Team, LLC, a Top 100 Owner of Manufactured Housing Communities with over 1,500 lots under management. His team currently manages over 20 manufactured housing communities across ten states - AR, GA, IA, IL, IN, MN, NE, OH, PA and TN. His expertise is in turning around under-managed manufactured housing communities by utilizing proven systems to maximize the occupancy while reducing operating costs. He specializes in bringing in homes to fill vacant lots, implementing utility bill back programs, and improving overall management and operating efficiencies, all of which significantly boost the asset value and net operating income of the communities.


Andrew has been featured on some of the Top Podcasts in the manufactured housing space, click here to listen to his most recent interviews: https://www.keelteam.com/podcast-links. In order to successfully implement his management strategy Andrew's team usually moves on location during the first several months of ownership. Find out more about Andrew's story at AndrewKeel.com.


Are you getting value out of this show? If so, please head over to iTunes and leave the show a quick five-star review. I have a goal of hitting over 100 total 5-star reviews by the end of 2021, and it would mean the absolute world to me if you could help contribute to that. Thanks ahead of time for making my day with your five-star review of the show!


Talking Points:

00:21​ - Welcome to the Passive Mobile Home Park Investing Podcast

00:50​ - Brady and Jeff’s professional history into manufactured housing

06:21​ - The most important things to look out for when investing in mobile home parks 10:00 - More about the Frank and Dave MHU Boot Camp

13:39 - Their Kansas City, Kansas Operation and case studies

19:19​ - Finding deals, investors, and funding

21:07 - The perfect mobile home park

23:58​ - Learning experiences

27:11​ - The toughest part of the business

30:22​ - Their buying criteria

32:00 - Secrets to success

38:17 - Getting a hold of Brady and Jeff

39:15 - Conclusion


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https://www.youtube.com/channel/UCy9uI3KGQmFgABsr9lUtRTQ



Links & Mentions from This Episode:

Brady Hanna’s email: brady@legacymhp.com

Jeff Boor’s email: jeff@legacymhp.com

The MHP Bootcamp: https://www.mobilehomeuniversity.com/mobile-home-park-investing-books-and-courses/mobile-home-park-investors-boot-camp.php

Keel Team's official website: https://www.keelteam.com/

Andrew Keel's official website: https://www.andrewkeel.com/

Andrew Keel LinkedIn: https://www.linkedin.com/in/andrewkeel

Andrew Keel Facebook page: https://www.facebook.com/PassiveMHPin...

Andrew Keel Instagram page: https://www.instagram.com/passivemhpi...

Twitter: @MHPinvestors


TRANSCRIPT


Andrew: Welcome to the Passive Mobile Home Park Investing Podcast. This is your host, Andrew Keel. Today, we have two amazing guests in Mr. Brady Hanna and Jeff Boor of Legacy Investments Group. Before we dive in, I want to ask you guys a quick favor. Would you mind please taking an extra 30 seconds and heading over to iTunes to rate this podcast with 5 stars? Thank you all so much for taking the time to do that. It means a lot. All right, let's dive in. Brady has over 15 years in the financial sector working in credit card processing. Brady escaped the rat race and retired from the corporate world to focus on mobile home parks full-time. He has been in real estate for over 10 years and has done everything from single-family home developments to rentals and even flips. Brady has experienced filling and turning around distressed mobile home parks. Brady and Jeff met and decided to get into mobile home parks in a peculiar way where they were on a party bus going to a charity fundraiser. I'm excited to hear about that, guys. After diving into the MHU boot camp material, they pushed full steam ahead and now own five mobile home communities with just over 300 lots. During 2020—I definitely want to talk about this, guys—they occupied 50 lots by bringing in new and used homes and also renovating several. Brady focuses on the sales and acquisitions, and at the same time, Jeff handles the operations which is no easy feat in and of itself. Jeff has been in corporate consulting for over 20 years, helping corporations implement processes and streamline their businesses. Jeff has been a real estate investor for over 13 years, owns 10+ single-family rentals, and retired from the corporate world at the young age of 36. Brady and Jeff, welcome to the show, guys.

Brady: Thank you.

Jeff: Thank you.

Brady: We're excited to be on.

Andrew: Awesome. Can you start out by telling us about your story and how you guys got into the amazing business of manufactured housing?

Brady: Absolutely. Our background is as you said in our bio. I was always in real estate. I had a full-time day job working for a financial services company, did that for the last 15 years, and always had that idea after reading Rich Dad, Poor Dad as a kid. In college, I wanted to get out of the rat race. I started buying up single-family residences and building up a portfolio there. I had about 10 at that time. I had reconnected with an old buddy of mine from college. I was talking to him and I said, what are you doing? He said, I have single-family residences, too, but now I'm in mobile home parks. I said, well, I've always liked mobile home parks. When I went to college when I went to K State, I lived in a mobile home that my parents had bought for three years, owned by RHP. It was ARC at the time. I was very familiar with mobile homes and parks. I said, you know, I've always wanted to do that. Tell me more. He educated me on it and he said, if you really want to learn more, you need to go to this mobile home boot camp run by Frank Rolfe, one of your recent guests. I thought about it, but I still wasn't ready. Anyway, fast forward a couple of years, I was buying more houses, doing flips, wholesaling houses, and I had talked to my neighbor Jeff here. He was into single-family residential houses as well. We were talking, we went out to lunch, talked more about single-family houses. Then, it was probably a year that went by and we were at a charity event. It's Harvesters. It helps raise money for homeless people and people who need food in Kansas City. They did this like the Taste of Kansas City event. Our neighborhood rented a party bus. We're on the party bus. He was sitting across from me and I looked at him. I said, Boor, you and I are going to buy a mobile home park. He's like, what?

Jeff: I looked at him like he was crazy. He said, let me send you a podcast. He sent me a podcast. It was Kevin Bupp's podcast at the time on the seven reasons why you want to. I had been like you said, invested in single-family homes. I got out of the rat race. I've been doing some volunteer work at the church and the school, enjoying it, but was hungry for something else. After listening to that podcast, I showed up on his back patio that Friday night and said, I'm ready. What's the next step? He's like, we're going to the boot camp. We'd pulled it up. We'd booked it for July. That was a couple of years ago. Then, the ride just started then.

Brady: Frank sends out the written material prior to the boot camp. We made a goal to devour all of that prior to going. We read through, devoured it all, and listened to all of the CDs as well. We actually started marketing to mobile home park owners prior to as well because we're like, we want to get experience so we can ask him actually good questions instead of just learning the basics. We hit the ground running. About two or three months after boot camp, we had our first park under contract and we've been rolling ever since. We've got five currently, we've got another one under contract, and we'll be buying three more parks by the end of the year.

Andrew: That's amazing, guys, wow. First off, congratulations. I had a similar story. I went to the boot camp with Frank and Dave. It seems like a lot, but kudos to you guys that dived in and got your hands dirty. Maybe you can tell us from your time in the space, what are the most important things that you need to look out for when investing in mobile home parks? What are the things that you look for as active operators? What things do you think passive investors need to look for before investing?

Brady: I would say a couple of those things that we look for with every park we go into is really what are those big-ticket items that we're going to run into that could be deal-breakers or just business-enders down the road? Do we look at things like what is that wastewater system? Does it have a wastewater treatment plant? Is it on city water, city sewer? Does it have well, septic, or a lagoon? We've looked and evaluated several parks that had those wastewater treatment plants or lagoons where if that wastewater treatment plant had to end the life and we have to replace it, not only do all of our residents not have a place to put their waste for a couple of weeks until you replace it, but you're out $500,000+ just on replacing that system. That's a big piece. It's really infrastructure because, with these parks, you got to really evaluate that infrastructure to make sure that you're not stuck with really bad or old infrastructure that you're going to have to sink a ton of money into.

Jeff: I would add a couple of things. I'm a big fan of if someone's done it before, why reinvent the wheel? The playbook from the boot camp is fantastic, especially for an initial investor. Our first park was actually a park that was up for auction in my hometown at Great Bend, Kansas which is a small town of 15,000 people. We went against the playbook, but we got it for a fantastic price and experienced a great year of learning why you don't buy parks in small towns. It was a great opportunity, but tons of lessons from that, stick to the metro areas and all that. As you grow, sometimes, deviating a bit from the playbook is helpful. Because we're working on this full-time, we went back to Frank's initial model where we're going to do as much as we can from headquarters. We don't have a park manager in a lot of our turnaround parks right now. We've got rehab crews that are there. We're in-house doing the invoicing, the rent collection, handling, bringing those tenants on, giving them the experience that we want to give them from an operations standpoint, setting the stage, being firm but fair, and all that good stuff. I think that my advice to someone new would be the playbook is a fantastic way to go about it. Everything Brady talked about is in the playbook. Use that as your guide. But then as you grow, don't be afraid to try new things out and see what works for you.

Brady: If you're a passive investor, I would say the most important thing would be really vetting the operator—the person you're going to invest your money with. Make sure they've got experience buying into different parks, in the different areas that they're sending out their funding packages for. Don't just look at their marketing material because everyone can make something pretty by sending some of them off to VAs. I've talked to some guys who wanted to do syndications who hadn't even owned a park yet. They wanted to go syndicate deals with investors. They're asking me to back them because we had the experience. Find an investor who actually is active in it, has bought communities on his own, has experience. Then, I would say make sure that if you call them up, they have time and you can ask them specific questions. They should be able to answer those as well.

Andrew: One thing I recognized that you guys mentioned is it might be a good question to ask an operator if they've been to the Frank and Dave boot camp, something so basic. Have you gone? Have you been educated? I've gone to the boot camp four times. I'm lucky enough that they come to Orlando every year. Since I've been multiple times, I go for networking. There's like 100 people every time I go. I met a guy that was from Louisiana last time. He's like, I own a park right now. It's on a lagoon. The local EPA is wanting to shut it down. He's like, wow, I wish I would've come to this before I bought this park. How many things could be different if I would've come to this first? I'm going to add that to the list. I think that's a good question.

Brady: I think that's good, too.

Jeff: One final thing I thought of, Andrew, is the partnership that I've got with Brady. If you're passive and find a partner with complementary skill sets. I don't know that I'd want to do this by myself, the ups and downs, and the challenges that come. It's great to have a partner. Brady is good with sales and marketing. I've managed my own properties and always have. Operation was my sweet spot. We've brought together skill sets that helped us both be able to contribute to it. But it's also just a lot more fun when you've got someone to go on the adventure with you.

Andrew: I agree with you 100%. There was a guy that has worked with me for five years now. He went to high school with me. We love it when we take over a new acquisition and we move in. You're getting your hands dirty. It's just a different environment. It's fun like you said. That's important. I'm glad to hear you guys are enjoying what you're doing. Those of you that are watching the video of this—I love your setup. Maybe you can tell us about your office here. This is a nice, little view of the command center.

Brady: Yeah. We're actually the first mobile home in one of the parks we acquired a year ago here in Kansas City, Kansas. When we bought the park, the previous owner had a 1983 Commodore. That was his office. It was a 50-foot run-down mobile home. Between this and our park about a block away, there are 132 spaces. We said we're going to be bringing in new homes. We want to have something to showcase, but we also want to have a nice office because we're going to expand. We're going to hire employees. We just hired our first sales and homes coordinator last month. We're going to be hiring several people over the next couple of years. We want to have a nice place for them to work out of. We ended up moving that 1983 Commodore to another park that we have in town, brought in a brand new Clayton home that can be our showroom but then also can be a nice office for us to work out of that we actually enjoy coming to every day. It works great. Since we've brought this home into the front of the park, every single new home now that we bring into our park, we sell usually before it even gets delivered because we just have people who want to upgrade their homes in the park. They trade it into us. We'll rehab it and we use this as credit, and they can move into a new home without a down payment. It works out great.

Andrew: That's fantastic. I love that. Maybe you could tell the listeners a little bit about you guys' operation based out of Kansas City, Kansas, a little bit about the parks you own, maybe give a case study of one of the properties you've purchased and improved. Tell us about the CapEx, what that all looks like.

Brady: I'll give you two different case studies. We'll do the park that we're in right now. We bought this one on January first of 2020. We bought it—it was two parks together—from a guy who had owned it for 20 years. He was old, he was tired. He was kind of an anti-people person, to be honest. People would come to the office here at the park. He would open the door, and say, what do you want? You can't come in. That's how he ran his business. He was too happy. Every tenant in all these parks just didn't like ever having to deal with him. It was hard for us to get that deal. We ended up getting it at a great price. It was 132 lots at that time. Jeff, how many were occupied?

Jeff: Eighty-nine.

Brady: Eighty-nine were occupied of those 132. We bought that park for $2.5 million and we had tried to buy it a year before but he didn't have books. He hadn't filed taxes in seven years. He owed $200,000+ in property taxes, on personal property homes in the park that he just hadn't paid. He didn't have titles. We couldn't get titles. When we ended up finally getting creative and working out a deal, he ended up solo financing it to us. We had to go through an abandoned title process on 40 homes here in the park during COVID to get titles for these homes. We had gone through several different rehab crews rehabbing all of these 40 homes over the last course of the year and over the last 12 months and selling off those homes through the 21st Mortgage's cash program. Fast forward a year, there were 89 occupied and we're bringing in 2 new homes that'll be delivered on Friday that will bring us up to 100%.

Andrew: Wow. That's fantastic, guys. That's amazing. How did you source that deal? Was that direct-to-owner or was that through a broker? How do you source all of your deals?

Brady: All of our deals so far have all been off-market. This one particular was just your cold-call. We've built a database of all the parks within about a four- or five-hour radius of Kansas City, tracked all their data through the GIS maps, and the sector or state websites. I just went through them and called them. This guy didn't have a phone number although he was easily accessible. We ended up googling him and found it obscure that he was a member of the Kansas City Woodworkers’ Guild. He was their treasurer. They had their phone number on this obscure website. We hit it off and he's like, well, let's go down to lunch. We went out to lunch and talked several times. He ended up selling it to us. We had asked him. Once we handed in our contract and we bought the park, he ended up still working in the office for a couple of months. He dropped off a folder of 20 or 30 different postcards to us. He's like, oh, if you ever find this interesting. These are people who wanted to buy the park from. Why did you sell to us? He's like, well, I liked you guys. That was it. Just hitting off with people. The very first park which is our other case study for you, we've bought this in Excelsior Springs, Missouri. It was the first park we bought. We bought two at the same time. But this one was 35 lots. Smaller park to get our teeth wet. We mailed out postcards, did cold-calls again. The owner that had called me is 93 years old. He had owned the park for 30 years. We asked, how much do you want for this? Well, I just like to get out of it what I bought it for 30 years ago.

Andrew: Oh, my goodness.

Brady: We could do that.

Andrew: We can make that work.

Brady: At the time, it was 18 occupied lots. We bought the park. We ended up sub-metering water. Over the course of this last year, I was working a full-time job. Jeff had a part-time consulting gig where he was a 1099 consulting contractor. We're rehabbing 40 homes at the park we're in right now. That park we had let sit for about a year, not really doing much with it because I was working full-time, he was, COVID hit. We said I want to get out of my corporate job. I would like to retire from that where we can just work together side by side and have fun. Why don't we fill this thing up? Jeff said, yeah, let's do it. We ended up finding 15 homes that we brought in, just used homes because Missouri is a HUD state where you have to have a bunch of requirements to move-in homes. It costs an extra $6000 or $7000, but if you bring in a used home, you don't have to do that. We found 15 homes over a matter of a couple of months, found a good mover, partnered, slammed those homes into all of those lots. Then we had a rehab crew go through, rehab all of those, and get those all sold off. That park now is full as well.

Andrew: That is awesome. It just shows you what focused effort can get out of stuff. That's a lot of lots to fill in one year. Normally, people would phase that out, maybe do 5-10 a year. I would say you guys really put the pedal to the metal. Good job, guys. Maybe you can tell us a little bit about how you fund your deals. Do you guys take on investors? Are you guys funding it yourselves? How do you get the money for the CapEx projects you guys are doing?

Brady: When we bought the first several parks, it was just Jeff and I buying ourselves—just 50-50 partnerships with ourselves. We got to talking as these parks all started getting full. At that point, I was retired from my day job. Jeff didn't have a day job. We're like, well, what are we going to do all day? I imagine these parks are fun, but a full park doesn't take nearly as much time as these infill projects. We like to work. We like to do things. We said, let's bring in a partner who's a buddy of mine who has another successful business in Kansas City that's 1 of the top 100 companies in Kansas City. He and I have talked about starting businesses together for 20 years. We all got together, followed the rules of Gino Wickman's Traction, set our 10-year and 3-year goals, and really implemented EOS fully. Now, he's really our third partner that we self-fund all of our deals with. We've got some pretty hefty goals but having 1200 lots here at the end of 3 years and 10,000 lots at the end of 10 years.

Andrew: Wow. Those are some big goals. I see some capital raising in you guys' near future. I’m just throwing that out there. Tell us this, guys, what does the perfect mobile home park look like in your eyes knowing what you know now?

Jeff: Based on the fact that we're working full-time—you said the funding part. I have full parks that we can pick up for a good cap rate. We're not afraid of the infill projects. We've got good rehab crews. We enjoyed doing that here. Getting the value-add from that is probably what we're looking for is kind of the tougher projects. Being in a good metro, something above $40,000 is our goal that has the opportunity for us to raise lot rent and get the lots filled. Our goal is to try to double the value of that park in two years by filling it, refinance those, take the money out, then go lather, rinse, and repeat, and buy a few more parks. Our goal this year is five. Next year is five. Then, if we can fill those up, the refinance is where they start to help self-fund within the machine. That would be the ideal park for us. For a passive investor, those infill projects are a little bit more to take on. But every park that we've bought, and most people are buying, they cash flow from day one. To your point, 5-10 lots a year, you could still do that and not fill them as quickly as you're planning to fill them. That value-add is there for the taking as quickly as you want to fill them. The perfect park for us would be city water, city sewer, direct build in a metro that has the opportunity for us to fill it and increase the value.

Andrew: I'd say mine is something very similar. Make sure you guys save me some of the parks out there.

Brady: I think your target market is a little further east.

Andrew: That's true.

Jeff: We'll let you know when we start calling there.

Brady: And you let us know when you got your moving company closer to Kansas City here.

Andrew: I'd tell you what. We had to shut the website down on the moving company because we were just getting so many people reaching out. That's another interesting business, transport.

Jeff: Huge opportunity.

Andrew: I don't know about you guys. We do a lot of infills as well. That was one of the pain points for us, relying on third parties. Our business success depends on them being able to stick to a schedule. We were having a tough time doing that. That's why we started our own.

Brady: That's on our 3-5-year plans, to do the exact same thing that you did—have our own truck and crews just because we're going to have enough going on. When you're going to pay $1 million in moving fees to move homes, you might as well do it yourself.

Andrew: Yeah. Especially over there in Missouri and some of those other HUD states where you got to do a lot of the site prep and so forth, it gets expensive for sure. What was the biggest learning experience for you guys? Maybe you could share that with us.

Brady: I would say on my end, it would be really to spend a lot of time in developing good partnerships not only internally but with our tenants. We interact with them every day and treat them like people, not just like a number and not just trying to enforce rules because that's what all of them hate. We get tenants all the time who move to us from the RHP parks of the world because they want to be treated like a person. They want to live in a community that lets them get together with each other and just have a true community. But then also partnerships with our contractors. Whether it's our moving companies that we work with, our rehab crews, we really treat them like they're our true partners and we rely on them. But we're going to treat them like gold because our business doesn't move forward if we don't take care of each other.

Jeff: If they're not on our team.

Brady: Our rehab crews have even gone as far as I dropped every other business I had going and I'm only working for you guys because I like you. I like the way you guys do business. You pay me fast and I don't have to go out searching for other business. I can just work with you guys and it makes my day fun, too. That's our goal, to have a win-win relationship with everyone we interact with.

Andrew: I love that. I think that's really important. Going into a new market when you're trying to hire new contractors and establish that trust is very difficult. I would say it's probably one of the most difficult parts. Infill, in and of itself, is the hardest CapEx that you could do in a mobile home park just in terms of the construction and the time necessary. Finding good contractors is difficult. Once you find one like you said, you got to be loyal and you got to keep them. It's not always easy to do because you don't want to get ahead on payments and behind on work. That's something I learned early on. At the same time, you want them to trust you so you don't want to not pay them soon enough. We tried to pay them every Friday and keep up with that, up with the work, but it's tough. I applaud you guys for being so relationship-driven because I think that will be very successful for you guys. It already has been with what you've done so far. That's awesome.

Brady: We had a conversation with our head of rehab crews. He said just yesterday, he's like, wherever you buy a park, we're traveling with you. He said I've already talked to all my guys. I pay them well. He said they're all willing to travel and go wherever you need us to go to help rehab and fill up these parks. It's a testament to that.

Andrew: Maybe you can loan them to me. I got about 30 homes over in Pennsylvania that I need to be rehabbed. Let me know. Tell me, what's been the toughest part of the business for you guys? Maybe you could tell us a little bit about the key metrics you guys watch on a consistent basis.

Jeff: As Brady mentioned, we're tracking EOS. For us, the big things are, are we hitting our goals on parks we want to acquire? Do we have the number of lots that we are expecting to have to keep up with the plan? Are we filling the homes in? It's all about the infill on the homes, occupied lots, rent collection. To Brady's point, one of the things that I've learned is it is about the relationship. For 14 years in single-family homes, I've never evicted anybody. I've always worked with them and convinced the people that need to leave that it's time for them to leave. Thus far here, we can't evict right now with the moratorium that's set on it. But we haven't had to evict anybody yet in the mobile home park business. It's all about conversations, relationships, getting them to do their part, I've enjoyed that part of it, and helping people where you can during COVID. Our collections are still 96%, 97%. I got a few people that we're working with but that's been the biggest lesson. You can work with people and help them there. I think the key metrics for us are basically are they paying? Are we filling this quickly as we need to? Are we staying on pace to buy the parks that we want to buy to keep the engine going?

Brady: That's something we've been really cognizant of continuing to refine. What are those lead indicators and those lag measures that we're tracking on a weekly basis? How do we build those indoor scorecards that are easy to track and make sure that we are on pace or off-pace? What do we need to focus our attention on? As we become very process-driven knowing that we're going to scale this thing, it's really having to think through a lot more than just let's get a home into one empty lot. That's something we've been working on a lot lately. It's a big undertaking but it pays dividends down the road.

Andrew: It totally will. From going through that, I think one of the tougher things for us was hiring because bringing on good people is really important and a bad hire is like taking two steps back instead of one step forward. That was difficult. I would say that the processes—like you said, fine-tuning those is very important. When we started out, all of these little banks that were loaning us the money to buy these parks wanted us to have a bank account with them. They want you to have the operating account. When you get 24 of those, you have all these different logins, and now, you're trying to scale but you have these little banks that have these little nuances, it just becomes very difficult. That was one of the hiccups we ran into. We had to switch all over to Chase and have it all on one platform and one login for everything. That's one of the many hurdles that we've had to come through which I'm sure you guys are just getting started with. Maybe you can tell us a little bit about your buying criteria, your area that you guys like to buy-in. It seems like you want to be close to them where you are in Kansas City. Maybe just shed a little light on that.

Brady: Yeah, absolutely. As we grow, we know we're going to have to expand our area. But right now, our goal is to buy parks within a four-hour radius of Kansas City just by car or just being able to drive to them. We stick with metros above 40,000 people. Size of parks, we have a minimum park size of 50 lots just because we've realized that with those smaller 30-lot parks or so, the means of scale aren't there when you have to pay a manager and if you have a water leak or things like that. It eats away your profit pretty quickly. The minimum lot size is 50. We prefer city utilities, either city water or city sewer. We'll look at well and septic, but we stay away from wastewater treatment plants and lagoons. We prefer being able to build backwater and sewer, but we'll buy parks if it's already being built back or if they're direct-build. Other than that, that's our main criteria. We prefer turnaround parks. We don't have a whole lot of interest to find a park that's already at 95% occupancy and close to market lot rent because there's no way for us to push value. Our whole business plan is just based on finding those parks where we can turn them around, push value, and make it a nice community where it's not currently. That is a win-win.

Andrew: Totally. That's fantastic. The value-add strategy, when it comes to the management of these assets, that's one of the toughest parts for us—the operations and management of it. Jeff, can you tell a little bit about your secrets to success?

Jeff: Yeah. When you said one bad hire, you take two steps back—we inherited a terrible manager at the small town park that we bought. What we realized was there was not a pool of people we could pick from in the park. Our goal was to move a home in, attract someone to come in, and manage the park. We probably would've done that. We decided to flip the park. Luckily, we were able to flip it for a profit based on what we bought it for. We've got a park half-mile down the street that I never go to. I never have to. They bring the money in. As we brought on the last two parks, my thought was let's see what we can do from headquarters. Let's see how much we can handle it versus trying to hire that manager that's going to take more time and more energy. We've got a presence there with rehab crews. Eventually, we will hire the manager which to this point, 50 lots or more is what we're looking at for that expense. But right now, I'm handling it for the five or six parks. Later this year, I'm going to have an operations person I'd bring on to answer the phone. Someone that could sit across from where I am. I can teach them the experience that we want to provide and they can learn firsthand from me versus a remote asset in a town that they may not have taken the job as seriously as we need them to as we're infilling it. One thing that Brady has brought on to be able to do that is we have remote showings now which are working fantastically with a remote lock and a camera in the home. We don't have to have a park manager to show the home. We give them a code. They go see it when it's convenient for them. We actually get to watch the video of their reaction without somebody there pressuring them for the sale or having a conversation with them. Then, we follow up with them and take them to the process. We're trying to do as much as we can from headquarters. So far, it's going well and I think we're going to be able to not necessarily need to have that manager until it's time to just manage the park once we have it full.

Brady: It's forced us to really think through. Thinking through that strategy is—how can we automate these things? How can we, as Jeff says, millenialize these things where it just automates all of these little things that a manager would've done in person? We've digitized our onboarding process. There are online mortgage apps that we've set up a system that will automatically send it to them, follow up with them, automatically schedule those showings as well as far as the smart locks, and send them text messages and email reminders just like you get from your doctor's office. Once they're through that mortgage process, an automated step will send them the background check that they could fill out online and we get notifications. It's that kind of stuff that we don't need a manager to do because there's technology nowadays. If someone's responding to our Facebook marketplace ad, they've got a computer or they've got a phone. They can do all these anyway.

Jeff: They prefer it that way I think, too. I don't know if I'd call it a secret but I would say that my approach is—and we talked about it earlier—all about the relationship. It doesn't matter who I'm dealing with. I want it to be a win-win for both of us. I've got tons of examples of that. It's being able to answer the phone when they call. The one thing that I've learned more so in this space than in other spaces is people just want to be heard. A lot of the people living in the park may not have a family. They may not have friends. A lot of our tenants are older. When they come in and they want to talk for 20 minutes or 30 minutes, it detracts from what I'm doing for that day. But when I listen to them, the PR happens and then their family members want to buy a home, it just makes the community a great place to live in. We've experienced that firsthand here. My wife's fear as we grow, she's like, how do you replicate that three hours away? Some part of that is having the experience come through here first versus the manager that I don't necessarily have as much control over. We're going to try it out, going back to Frank's old ways of doing it back in the early 2000s when Dave had managers and he didn't. I was like, why don't we try that out and see how it works? For now, it's working pretty well. Treat people the way you'd want to be treated. It doesn't matter who it is—tenants or your rehab crew.

Andrew: I love that. I love your hands-on nature and self-management. I'm really excited to watch you guys grow because I think you have a great operation going. We need more operators like you that are reinvesting into these communities, making them better. If you look at the technology piece like you mentioned, none of these older operators that have owned these things is doing that. They barely have websites for these mobile home parks. If you're able to millenialize, I like that term, if you're able to do that, you just systematize the business that much more. Kudos to you guys. I was fortunate enough to meet with the owner of Monarch Investment Group out in Colorado. They own 66,000 apartment complexes. His name's Bob Nicolls. When I met with him, one thing he told me—which rang a bell when you said this—is that he takes each part of his business and then he dissects it. He goes into every single park and lays out a structure and a system of how it should be to make sure that it's easy. It shouldn't be this complex process. Another thing that he mentioned was the queen bee-role in making sure that you're identifying what's the most important part of the business. For us, that's occupancy. I'm sure it's probably the same for you guys. His was renewals for leases. It was different than tenant-owned homes, but I just thought it was important, like what you mentioned, where you dissect each part of the business and then create a system that's replicable. I applaud you for being on top of it and I'm excited to watch you grow. Thank you guys for coming to the show. If listeners want to get a hold of you and chat, maybe be interested in investing or something, what is the best way for them to do so?

Brady: They could reach out to us via email. It'd probably be the best. My email is brady@legacymhp.com and then Jeff's is jeff@legacymhp.com. We keep it simple, but we're very responsive. We're happy to help. We don't syndicate deals but we know a lot of the operators out there. If you have questions about people you're looking to passive invest with in the industry, shoot me an email. I'll tell you who's good, who's not. I'm not going to bad talk anyone, but I'll give you recommendations.

Jeff: We enjoy meeting people, talking with people. We enjoy teaching people and helping. Anybody that has any questions, reach out. We'd love to have conversations to see where you're at, talk about what we're doing. We would love to hear from people.

Andrew: That's generous of you, guys. Thank you again for your time and for coming to the show. It was a pleasure having both of you. That's it for today, folks. Thank you all so much for tuning in.


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