Interview with Elias Weiner from the BoaVida Group

Listen on Apple Podcast here: https://podcasts.apple.com/us/podcast/interview-with-elias-weiner-from-the-boavida-group/id1520681893?i=1000578692560

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 experienced mobile home park owner/ operator Elias Weiner from the BoaVida Group. Today Andrew and Elias converse about how the mobile home park business has changed, interest rates and cap rates when refinancing, different value-add initiatives and the upcoming tiny homes movement.

Elias is the founder and President at The BoaVida Group. The BoaVida Group is a mobile home park and RV park real estate investment company that owns and operates over 165 properties with more than 20,000 home spaces. Elias is the 10th largest owner and operator of manufactured housing communities in the country.

***Andrew Keel and Keel Team Real Estate Investments (Keel Team, LLC) do not endorse any interviewee. This interview is for informational purposes only and should not be depended upon for investment purposes. ***

Andrew Keel is the owner of Keel Team, LLC, a Top 100 Owner of Manufactured Housing Communities with over 2,000 lots under management. His team currently manages over 30 manufactured housing communities across more than ten states. 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.

Would you like to see mobile home park projects in progress? If so, follow us on Instagram: @passivemhpinvesting for photos and awesome videos from our recent mobile home park acquisitions.

Talking Points:

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

02:38 – Elias Weiner’s story

10:05 – Raising money: syndications versus investment funds (in mobile home park investing)

14:10 – The toughest hurdle for MHP operators

18:20 – Management of mobile home parks

19:58 – How Elias’ mobile home park investment strategy has changed over the years

22:24 – Utilities in mobile home parks

25:33 – Value add components inside manufactured housing communities

27:30 – The best investment opportunity right now (MHP related)

31:14 – Projections for rent growth

32:40 – Interest rates and cap rates (Are MHP’s recession resistant?)

36:13 – The most important things that passive investors need to look for before they invest into mobile home parks

39:10 – Tiny homes movement

40:27 – Getting a hold of Elias Weiner

41:55 – Conclusion

SUBSCRIBE TO PASSIVE MOBILE HOME PARK INVESTING PODCAST YOUTUBE CHANNEL https://www.youtube.com/channel/UCy9uI3KGQmFgABsr9lUtRTQ

Links & Mentions from This Episode:

BonaVida Group: https://www.theboavidagroup.com/

Elias Email: eli@theboavidagroup.com

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/PassiveMHPinvestingPodcast

Andrew Keel Instagram Page: https://www.instagram.com/passivemhpinvesting/

Twitter: @MHPinvestors

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TRANSCRIPT

Andrew: Welcome to the Passive Mobile Home Park Investing Podcast. This is your host, Andrew Keel. Today, we have an amazing guest in Mr. Elias Weiner, who is the founder and president of the BoaVida Group.

Before we dive in, I want to ask you a real quick favor. Would you mind taking an extra 30 seconds and heading over to iTunes to rate this podcast with 5 stars? This helps us get more listeners, and it means the absolute world to me. Thanks for making my day with that five-star review of the show.

All right, let’s dive in. Elias is the founder and president of the BoaVida Group. The BoaVida Group is a mobile home park and RV park, real estate investment company, that owns and operates 165 properties with more than 20,000 spaces. He is the 10th largest owner and operator of manufactured housing communities in the country and the largest owner his age. Elias, we are excited to welcome you to the show.

Elias: I do apologize. Every once in a while, there’s a cut because I’m in Mexico right now. It’s a typical operation over here. Sometimes things work and sometimes they don’t.

I used to say for fun, the largest operator my age, but I don’t know if that’s true anymore. It’s weighted in favor since originally, it was an old person’s business. But now you got all these young dudes getting into it.

In fact, I was spending time with some of the new brokers in the business and they’re all young dudes now. That’s a big change from what it used to be. It used to be, a young broker would be a 60-year-old broker. But now you got these 26-year-old dudes full of testosterone out there hustling, trying to find new deals. It definitely changed, probably for the good. It’s a lot of fun, too.

Andrew: Yeah, definitely stirring up some deals that that otherwise wouldn’t be. Elias, I’m excited to just learn about your career. Would you mind starting out by just telling us about your story? How in the world did you get into manufactured housing in the first place?

Elias: Yeah. But first, I want to know, how long have you been doing this podcast? Tell me a little bit about this.

Andrew: I started this in March of 2020 when the shutdown happened for Covid. This was my Covid side project. I was quarantined, if you will, and started doing this podcast. It’s just been tremendous.

I’ve met a ton of operators and I’ve learned a lot. The biggest value I’ve taken away is that as I’ve learned a lot about just mobile home parks in general, I have a lot of contacts now that I can ask questions on if their specialty is different than mine.

Elias: What’s your rundown? You’ve been buying parks for how long?

Andrew: Seven years. Not as long as you.

Elias: I started when I was two years old. I’m only 24 now.

Andrew: Okay.

Elias: I started about 22 years ago. I bought my first park in Northern California for $300,000. I got a $60,000 loan and the seller financed the rest. Basically, I bought a bunch of used homes in a drug park, cleaned out the drug park, tripled the value, and refinanced it. I didn’t know what I was doing. And then rinse and repeat.

I went and bought another park up in Eureka. I did the same thing. Actually, my very first park, I still own it. I refinanced it again for $1.2 million a few years after that. I’m not too sure what it’s worth today, but it just still keeps paying out. We have a buy and hold strategy. Everyone wants to sell something, but I get a rash. I’m allergic to it, so I try not to sell it.

Andrew: That’s my strategy as well.

Elias: My father was a timber guy and he was in the timber business. From the timber business, he would be in the land business. Then he would have land he would subdivide. He’d buy 10 homes from the mobile home dealer at a time, put it on the land, that would help sell the land.

Then he realized, okay, if I’ve got a dealership, I get the homes cheaper. Then I get a bunch of people looking at the cool homes. They don’t have land, so then he’d sell them land.

I always worked for him in construction and stuff. But when I was going to Davis, I was running out of money and there was a mobile home park. Actually, I was working at Denny’s. The first month, I was a busboy. For the second month, I was a server. In the third month, I was the night manager.

After that, the gal that ran the place, I don’t know. I didn’t like the way it was going, so I had to get out of there. I told my dad that I was working at Denny’s, he actually laughed at me. I thought it was a good job because you could go in there and cook yourself up some popcorn shrimp after a night of having fun. It was a good place as a college student to get some free food.

There was a park there in Davis that had vacancies in a market that never should have any vacancies. There was this pink home that was sitting there for a year, never being lived in. It was peach on the outside, like weird peach carpets. The lady that was awesome, she ordered the home, but she just did a bad job of picking colors. They weren’t able to sell it, so my dad said, well, we’re not going to bring any homes in this park.

Anyway, he suggested that there’s a park here that they want us to bring homes into and sell homes, so on the dealership side of the business. We went and checked it out. He didn’t want to do anything because they couldn’t sell that home. My dad was never a teacher. He never had the patience for that, but everyone in his real estate office, I would just sit there and even the chain-smokers and stuff, I would just try to absorb everything I could from them.

What I would do is, yeah, so any little nuggets I could get from them, but they taught me how to sell. I went and placed an ad in Davis, how much down, how much a month, two bedrooms, two baths, and the phone started bouncing off the table. I sold that home really quick.

Anyway, that summer, I basically sold like 12 homes. I went over to the apartment complex that I lived in in South Davis. I wasn’t supposed to do this, but I put all these notices up on everyone’s door. I said, why rent when you can buy and with my phone number. And I sold like 12 homes that way over the summer.

The guy that manages the place, he came over and he’s like, you can’t do this. He was a different character, too, so he let me get away with it. I sold the home so fast that we weren’t selling for the right price. We weren’t making what we thought we were supposed to make.

My dad was trying to figure out the land home business. I didn’t have the resources, so I went out and bought a truck and learned how to set the homes up. We’d crawl underneath the homes, putting them together, and doing everything wrong. I had to get my own construction crew and stuff like that.

Fast forward to the story, I ended up starting my own company with an old partner in the Bay Area, because the San Francisco Bay Area business was a different business. You go and buy a home for $40,000, you take that home and throw it away, then you go buy a brand new home from the factory for $40,000. You put that in the space, but you would have a storage agreement for the lot.

Today, those same parks are probably $2500 space rents. Back then, they were $650 space rents. I spent $20,000 fixing the home up or setting it up and then you’d sell it for $150,000. You’re flipping homes like you used to do in Bay Area parks. That was a good business, but it was a very capital-intensive business.

All those homes we were throwing away, we ended up taking up to that park in Oroville, California and filling up that park with those nice used homes. I don’t know what year I bought the first park. It was 2001, maybe. Then 2007–2008 came along, we started figuring out how to raise money with investors, started exploring outside of California, and just kept growing it.

Now, actually, we’re at, I think, 176 properties, about 23,000 spaces. This year, we’d probably closed well over $100 million, maybe $150 million in deals. We have about another $100 million under contract.

Andrew: Wow, that is amazing. That is really cool. There seems to be like a huge jump from your first park into raising money. Maybe you could just tell me where I’m at. I’m doing individual syndications. Are you doing like a fund?

Elias: We used to do that. I did that all the way until 2018. What would happen is we don’t sell, we refinance. We’ll go in there, solve the problems, increase the value, and then refinance, and get all the money back, first, the investor.

What we do is we don’t charge any acquisition fees, disposition fees, asset management fees. I’m not a big fan of the fees. I understand why people do them, but the incentives are bad. You’re incentivized to buy stuff and to sell stuff, not to solve real problems and create real value and hold forever.

Because of that, in 2018, there were just too many refis and too many people who were getting money back and they wanted to put it back in with me, so my money kept getting bumped. In 2017–2018, I was unable to put my money to work as much as I could. There were plenty of homerun deals that I didn’t put a dime into that I wanted to, investors didn’t want me to.

Most syndicators want that syndicator to put money in. That’s not typical for me, because we have a really good track record. What I decided to do was basically use my money to build a team that could source deals all over the country and get more comfortable with all these other markets. When we did that, that opened up to, okay, so now we can have the deal flow.

The other issue is, if you’re making money on a quarterly basis and then you’re having all these random, every quarter now is several refinances. I like to call them you’re harvesting these properties. What we wanted when I spoke with a lot of investors was a vehicle where we could put our money in throughout the year as we got money.

I opened up a fund that’s pretty much open from April to the end of the year that people can just plug their profits into, invite their friends, and then hopefully we’ll look at 1000 deals to see if we can find 20 or 30 deals that make sense.

The other thing that the fund does is on the more risky deals, like the RV parks, the high-end destination RV parks, or the big fixer uppers that we got to completely renovate the park, kick out, just major cleanup parks, those are higher risk, but maybe you’d refinance them in year two, year three, or something like that.

I was only letting the investors that had more money in those deals because there is more risk. There’s more volatility, especially with the RV. you’re not as safe with the four cycles of the economy in an RV park as you are with a mobile home park. It’s just really that simple. But if you do a fund, and you have 30 parks you buy, and you have two high-end RV parks in there, then that’s fine.

Day one, you’d walk into an awesome cash flow, but you’re going to have that volatility that you’re not going to have on that beautiful 4-star, 4½ cap institutional deal. Yeah, that’s a combination of deals. It really works out good, where we can…

Andrew: Get balance and hit the returns.

Elias: Yeah.

Andrew: Yeah, good balance across the portfolio. That is really cool. That’s a great idea. A lot of people are getting into parks right now. They’re the hot girl at the dance. What do you think is the toughest hurdle for operators getting into the space?

Elias: I don’t think it’s raising money. There’s a lot of finance people that get into the business, and they’re not real estate people. I’ll lose a deal because […] underwrites filling up a park with a bunch of vacancies. I’ll underwrite 25 homes a year, 24 homes a year.

I have 1000 homes on order from the factories right now. I’m probably in the top five at home orders in the country. If you find that someone’s underwriting, bringing in 90 homes in a year, they probably don’t understand how that works, especially in today’s world. I’ve literally had people outbid me by a million dollars on deals, because they’re underwriting it like that.

It’s tough, because like Charlie Munger says, invest in a business that an idiot can run because at some point, an idiot will run it. That’s the beauty about this business. We think that we’re really good operators. Because we started in the mobile home dealership side of the business, we think we can really do a good job underwriting these.

We understand dealing with contractors, how long things take, and properly underwrite solving those problems. But I bought from other syndicators. They’ve made a huge profit, and they did a terrible job. But they still made money because their supply and demand is so much in our favor.

It’s almost like a sad thing because if we can build more parks, if the government would get out of our way with the permits and fees and it just doesn’t pencil, then we could just add more housing. Maybe our rents wouldn’t go up as much, but that’d be okay because we could build more and there’d be more opportunities there. Supply and demand is so much in our favor in this business that you can be an idiot and still make money.

Andrew: That’s true. I love Charlie. Love him and Warren Buffet.

Elias: I don’t have a whole lot of advice, except for the more you can get involved in the beginning on, like how the dealership side of the business works. I’ve got a guy, Chris Lemos, that works for me. He is a rock star. When he came to work for me, he was willing to do anything I asked to get in the mobile home business. He did the research, young guy, hard-working, great work ethic.

He wanted to figure out who he could team up with to get in the business, so I had him do mobile home sales, so the sales side of the business. Now he runs our sales division. We have a three-person titling team for home titles. He’s on these weekly meetings with onsite managers and regional managers.

The only reason that you’re not selling a home is because if there’s a vacant space, there’s nothing there. That’s the difference from a vacancy in an apartment. If you would let someone be in a tent on your space, then you could fill it. You just have to get the home there and get it move-in ready. Then if it’s not selling, it’s your fault. It’s always something really silly and really stupid.

The marketing isn’t hitting. It’s getting ghosted. There’s always something that if you ask enough questions, you figure it out and then all of a sudden, it sells or leases up. He’s responsible for having 1000 homes on order. I don’t know what our monthly sales is, but it’s a big number.

Andrew: A thousand homes on order, that’s insane. Tell me about your organization. Tell me what other team members you have to run that type of property management company. I take it, you manage all in-house, right?

Elias: Mostly. Out of 176 properties, there are 26 of them that we third-party. We also work with M. Shapiro and True Built. They’ve done a great job for us in specific areas that they specialize in.

We don’t really have an ego about that. M. Shapiro have better relationships than us in Michigan. Basically, we’ve got a team of zone leaders that work with all of our regional managers across the country. I’ve got an open door policy. I’m available to anybody at any time.

I don’t know if you noticed or not, but people sometimes say they can’t believe how easy it is to find me. I think my wife was complaining about that, though. Our acquisition team, we’ve got a great guy running now. I guess it’s a four-person acquisition team. We’ve got two full-time great loan people. All they do is refinance and acquisition loans. If you can imagine, we’re refinancing 10 parks a year or more.

Andrew: Wow. That’s awesome, man. That is so cool. How has your mobile home park investing strategy changed over your years in the business? Maybe what those initial parks look like? Has it changed at all? Are you still buying the same quality, the same size, that kind of stuff, today?

Elias: I’ve been buying a lot bigger, nicer stuff. But at the same time, if it’s not available, then it depends. Because when you look at your team, what you don’t want to do is go buy a big construction project in a place you have no resources. That’ll put you in a lot of trouble. I see other people doing that and I make the joke that, okay, there’s a park I’m going to be able to buy in five years.

I’m kidding, but because I know the pains of the development side or the renovation of these parks and how wrong you can be on your underwriting, there are no cost controls right now. Tell me you underwrite something today and it’s going to be like that. You have very little control.

But if you see a team member or a regional manager and they’re crushing it in their state or they’ve got 7–10 properties and it’s just smooth, they’re just succeeding, and then there’s an opportunity in that area, or maybe it’s a big fixer upper that you think they can handle, we look at it like that, which is nice with the fund because you can just mix up different types of properties.

We’ll buy a 2-star park and turn it into a 2½-star park. That’s the best it’ll ever be. It will get repaved, it’ll get painted, and it’ll get some tougher cleanup notices, but it’s a trailer park.

We have mobile home parks. We have really nice mobile home parks and then we have really awesome manufactured home communities. But if we can go in and make it cleaner, safer, give the residents value and also great value for our investors, then we do the deal. I have no intention of ever going public or anything like that. It doesn’t have to look a certain way.

I would say that my investment strategy hasn’t changed as much as my resources. My resources have changed so that maybe the most discipline I need is to not do a small deal. It’s hub-and-spoke if they can handle it.

Right now in Arizona, I’ve got a park under contract that’s right next to another park, that I know the onsite manager is doing a phenomenal job. I know she’s probably a little bored. She’d love to get a pay raise, so why not give her a pay raise and give her that other park?

On our revenue, it’s not going to move the needle, but will I be able to increase the value of that park by 50% in the next 5 years? Yeah, no problem. It still makes sense to do it. That part of a team would be happy to do it, and that’s the feedback that we got.

I’m different in that case where I’m not looking it, because I’m not looking to create the perfect portfolio. The perfect mobile home park is when people drive to a beautiful senior park and they’re like, okay, I’ll pay more for this. Okay, but you’re just buying a bunch of problems because they don’t have anything to do except they’ll go to the office and complain.

Also, when the economy gets tough, that’s the toughest part to sell homes in. Even though it’s a beautiful park, it’s only seniors. What you really want to do in all of these parks, with new single wides and old single wides, but you want everything nice. You can make it nice. You can put the money in to make it nice. Old single wise, new single wise, old double wides, new double wides, all age. Now you have a price point for everyone, right?

Andrew: Yeah. What about the utilities? Do you get picky on utilities at all? In your perfect mobile home park, is that city utilities, obviously?

Elias: I’m more picky now. We have tons of parks with well and septic in probably one of the toughest states, California. When I go out of state, I’m typically going bigger and I’m going less.

Andrew: Less private, more public utilities?

Elias: Yeah.

Andrew: Wow, that’s awesome.

Elias: Think about it like this. The perfect attorney is not the attorney that says there are risks, don’t do the deal. They would have a business mind. They would say, there is risk and here’s what the risk is worth.

It’s the same thing with the well and septic. If you can get a $2 million discount on a $500,000 problem, then you just made $1.5 million. I like $1.5 million.

Andrew: I think most people would. That’s a great way to look at things. Tell me about the value-add. I mean, 1000 homes on order. Would you say infill is still the toughest value-add component in 25 homes a year per park? Is that a good average? What type of boots on the ground personality you need to accomplish that?

Elias: I think that infill is the easiest.

Andrew: Wow.

Elias: If you can find a nice, clean park with a bunch of vacancies, and all you have to do is fill it up, and supply and demand is totally on your side, then that’s the fastest way to double the value of the park. The other way is you raise rents and upset people, so you really have to take your time.

The other way is passing through the utilities, installing water meters, making sure everything is itemized just like your house and my house. Bringing homes in, that’s why it’s so important to have that dialed. It’s more about a lot of people trying to save too much money hiring bad people, bad contractors. Have you had that issue?

Andrew: Oh, yeah. I’ve infilled. Most of our parks are in the Midwest. We’re dealing with a more chuck-in-a-truck type of contractor most often that has a side business that installs mobile homes and maybe has a tow truck. It’s just making sure we’re following up and managing them appropriately so that we’re getting what we’re paying for, but we’ve had bad experiences.

Where do you feel is the best opportunity right now? Would that be in infill? If we’re talking about passive investing in mobile home parks, is it going after value-add parks? Is that the lowest hanging fruit, or is it developing new mobile home parks? What do you think is the best investment opportunity?

Elias: I think it’s too tough. I look at it every once in a while if I get a slow date or something, but that’s too tough. You just have to be open. You got to just keep looking at different deals.

There’s this saying that, oh, you make the most money on the deal you don’t do. Have you heard that?

Andrew: I have.

Elias: Yeah, I don’t like that saying. I think it’s stupid. Think about all the deals that you didn’t do in mobile homes that you would have made money on.

Let’s say there’s one of those deals and you lose 100% of your money, but then you did all those other deals. The max you could have lost was 100% of your million dollars in the one deal. But if you did the nine other deals that you looked at that you know you should have done, what if you 5X’d your money in just one of those deals, and then you just made decent money on the rest?

The biggest risk is not doing anything, is just sitting there idle. I think of money like I don’t care about it that much. I think about it as it’s sitting on the counter underneath the heat lamp. You’re in the diner and they put the money up there, the heat lamp is just cooking it and it’s getting all nasty. The longer you sit it there, the more worthless it becomes.

What you have to do is you have to look for a good enough deal. What’s the best deal that you can find at the time? Because people are concerned about opportunity cost, if you find an amazing deal, Andrew, and you don’t have the money because you just did a deal that you think is a base hit, because if you find a basic deal, you should do the basic deal. If you’re only looking for homerun deals, maybe you’ll only find homerun deals, but maybe it’ll take you five years. But if you come to me and you say, hey, I found a homerun deal, I want a partner, and then it’s such a good deal, you just negotiate whatever deal you want with me. Because if you find a great deal, you can find the money.

Andrew: That’s a really interesting perspective. I’m naturally just more cautious. I was telling someone earlier today that every mobile home park we’ve bought, we’ve added 3–10 items to our due diligence checklist at just every single deal.

We haven’t done 100, but we’ve done 33. Every deal, we’ve added a handful of things to our due diligence that we learned, that we didn’t check. I would love to maybe hear about your processes, due diligence, and maybe some mistakes you’ve made.

Elias: That’s good and you should have all those. None of them on their own should be a reason not to do that deal, but they should all come with a value of what you need because value matters. The price that you pay today matters. That’s why interest rates, inflation, recession, none of that matters. It’s what you pay today for the park.

Andrew: That’s interesting. I wrote that down. The price you pay today matters. And I wrote down your comment about the attorney. Here’s the risk and here’s what it’s worth.

What do you project for rent growth in some of these markets? How do you project that? Do you base it off of inflation? Do you base it off of apartment rents? How are you basing it?

Elias: I look a lot at apartment rents, I look at apartment occupancies. When you start looking at mobile home parks, it doesn’t necessarily mean anything. They’ve been owned for 30–40 years for the same people, and they’re doing $5 rent increases every year. You got to look at occupancies.

I tend to take my time to get where I need to go. I make it up in turnover and on infill at the turnover rate. I’ll typically figure out what I think the true market rent is, and then I’ll make sure that I’m there or just past there in year five. Usually in mobile home parks, the true market rent is a lot higher.

Andrew: Do it incrementally, right?

Elias: Yeah.

Andrew: Do it incrementally, not rip the band aid off at once.

Elias: You got to think about it, it’s a partnership with you and the residents. You don’t want to ever put them in a bad situation, but you got to get them to market. If you can do it over 3–5 years, then that’s how you do it.

Andrew: Tell us about interest rates, cap rates. What do you think they’re going to look like as we move forward into this uncertain climate?

Elias: I don’t think about it that much. I get asked about it all the time. I don’t think it’s important. In all my pro formas, we use a much higher interest rate on a refi and our projections. I might buy something for a 4 cap and get like a 4% interest rate when I buy it, but then I’m projecting 6½% refinance.

The only thing that matters is the debt service coverage ratio in year five. In other words, after I solve those 5 problems, can I get the 1.25 or 1.35 that the bank wants on the DSCR or so? If I can do that, then the deal works, and then I buy it.

Here’s what I would want. I want as much volatility as possible. I want interest rates to go up high. Inflation doesn’t hurt me, especially because I have rent control properties in multiple states. I’d much rather pay a higher interest rate today and a lower price today than a lower interest rate and a higher price. That’s where it goes back to the price you pay today matters

Andrew: That’s a good point. That’s interesting.

Elias: And that goes back to the finance people getting in the business, because they’re finance people doing real estate, and then there are real estate people that need to understand finance. That’s the difference. I’ll even take that one step further in the business that you and I are in. We need to be mobile home dealers.

Most mobile home dealers never figured out the park stuff, got rich, and went bankrupt. It’s horrible how much money they made and how much money they lost, and they never figured out the park side of the business. They just want that quick check.

If you understand the dealership side of the business and then you understand the real estate side of the business, then the finance. But the problem is with those other people coming into the business, they’re finance people, and then they get into real estate but they don’t know anything about the dealership side. For them, they’re making, I don’t know if arbitrage is the right word, float, or whatever.

A lot of them can’t do deals, or backhand deals, or ask for price reductions because of interest rates. In the interest rate, I’m not planning on having that loan for more than five years anyway, hopefully. They charged me 7½. I don’t care. Today, if I’m getting something that has 50 vacancies and I think I can fill them and double the value of the park, who cares?

Andrew: Yeah, it changes everything. Wow.

Elias: You’re not going to let anyone watch this, right?

Andrew: No, just a few people. That’s all.

Elias: We don’t want anyone to know this type of stuff.

Andrew: Yeah, this is top secret.

Elias: We want everyone to stop buying. Don’t buy anything. Interest rates are going to crush you.

Andrew: Yeah, mobile home parks are terrible to manage. They’re hard to manage.

Elias: Yeah. If you buy mobile home parks out there, I want you to be free to go to bed every night. Do a little mantra and just tell yourself that the recession is coming, don’t buy anything. Cash is king, cash is king, and stay out of the mobile home park market.

Andrew: Let me ask you this. This is one question I ask all my guests. What do you think are the most important things that passive investors—we’re talking investors in your fund—need to look out for and know before they invest into mobile home parks?

Elias: I don’t think it’s anything different. I think the operator matters. Buffett (years ago) used to travel around and actually visit with the managers before investing. When you have access to someone like you or someone like me, and they can come into the office, meet us, see the operation and stuff like that, that’s important. But also, you got to look at how they’re compensating.

If someone is collecting a 4% acquisition fee, a 1% asset management fee, and then the split’s bigger, but the problem is they’re incentivized when they need money. I literally know a guy who’s a really great guy to hang out with and talk to, but every time he needs to buy a big ticket item for his personal life, he buys something, he buys a park or he sells a park, because he just collects fees. It’s not about creating long-term value for everybody.

The beauty of real estate investing is, first of all, multifamily, whether it’s apartments or mobile home parks, are one of the most predictable safest types of real estate investing. There’s always going to be recession, recovery, expansion, hyper supply. Once you get to affordable housing, you’re doing good in all four cycles.

If they understand that, and even if they don’t, the great thing compared to the stock market is they can’t push a button so easy to sell. That’s a good thing. Now, if you could make it the same thing for the syndicator.

What happens is you end up making 1X or 2X on your money instead of 10X on your money. The long compounded growth comes in something where supply and demand is 100% on your side. It’s inevitable.

Andrew: Long compounded growth, inevitable. That’s what I just wrote down. I love that. Keith Wasserman, I think is his name, that I follow on Twitter. Does that ring a bell at all?

Elias: I don’t think so.

Andrew: You don’t know him? That’s what he talks about on Twitter constantly. He does a bunch of apartment stuff. It’s long compounded growth. You can’t beat it, like it’s going to happen. I love that.

Over the next five years, give us your prediction. What’s going to happen in the market? What’s going to happen with mobile home parks? Do you think there’s any new tiny homes or any new invention that’s going to put mobile home parks out of business?

Elias: No, for the last thing. Tiny homes have always been a thing that people thought was cool when I first started the business selling park models and RV parks more than 22 years ago. I don’t know what’s going to change in the business. It’s not going to be anything I’m going to be able to predict.

It’s really just as simple as if you think that the government or someone’s going to solve the affordable housing problem, then you shouldn’t invest in mobile home parks. If you think that there’s probably no chance of that, then you’re probably pretty safe investing in mobile home parks.

Andrew: It’s a good way to look at it. Thank you so much for coming on the show and dropping all these golden nuggets. What would be the best way for someone to get a hold of you if they would like to do so?

Elias: Basically, if you go to our website, theboavidagroup.com. You can also email me directly at eli@theboavidagroup.com. If you’re interested in investing, we get you set up with our BoaVida 2022 Fund Presentation, and that’ll answer a lot of questions. You can actually hop on a Zoom call with me. We’re pretty easy to find.

Andrew: Awesome. Thanks for taking time. I know you’re at a surf camp right now in Mexico. I really appreciate you taking the time to hop on here and joining me for the podcast.

Elias: This is fun. I always like talking about mobile home parks. When I go on these trips, I’m usually just surfing my butt off in the morning and then working most of the day.

It just so happens that I got kicked out of the water this morning because I started seeing lightning and that scared me. But I caught a few really good waves. I’m looking out the window here and seeing it’s starting to clean up. There might be an evening session in my dinner.

Andrew: There you go. Awesome, man. Thanks again for coming on. I really appreciate all the information. That’s it for today, folks. Thank you all so much for tuning in.