Interview with Gabe Petersen from Kaizen Properties

Listen on Apple Podcast here: https://podcasts.apple.com/us/podcast/interview-with-gabe-petersen-from-kaizen-properties/id1520681893?i=1000597600166

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 Gabe Petersen from Kaizen Properties. Gabe and Andrew discuss utility infrastructure in Gabe’s 1st mobile home park and how Gabe got educated on due diligence within the mobile home park space. Gabe also shares what he would have done differently before buying a mobile home park and his take on how the impending recession will affect mobile home parks and self-storage.

Gabe Petersen is the founder of Kaizen Properties and the host of The Real Estate Investing Club podcast. Gabe started his career as a management consultant for Fortune 500 companies in Seattle, Washington, he soon realized the corporate world did not fit the vision he had for his life. It wasn’t until he bought his first broken-down triplex in Tacoma, Washington that he truly found his path in real estate. He now repositions commercial real estate across the United States – with a special focus on RV and Mobile home parks.

***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.

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 200 total 5-star reviews by the end of 2023, 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.

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

01:23 – How Gabe Petersen got started in real estate

04:18 – Gabe’s first mobile home park purchase

08:48 – Gabe’s current portfolio

10:42 – Education on mobile home parks and RV parks

12:40 – Gabe’s move to Self-Storage

13:25 – The hardest part of the business

16:35 – Self-Storage versus Mobile Home Parks

21:56 – The most important things that passive investors need to look out for before investing in mobile home parks

27:49 – The impending recession and mobile home parks

29:07 – “Your tenant base is the most fragile”

31:15 – Gabe’s perfect mobile home park

32:07 – Getting a hold of Gabe Petersen

32:26 – Conclusion

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Links & Mentions from This Episode:

The Real Estate Investing Club: https://www.therealestateinvestingclub.com/?r_done=1

Gabe’s Email: gabe@therealestateinvestingclub.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. Gabe Petersen.

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 five stars? This helps us get more listeners, and it means the absolute world to me. Thanks for making my day with that review of the show. All right, let’s dive in.

Gabe is the founder of Kaizen Properties and the host of The Real Estate Investing Club podcast. Gabe started his career as a management consultant for Fortune 500 companies in Seattle, Washington. He soon realized the corporate world did not fit the vision he had for his life.

It wasn’t until he bought his first broken down triplex in Tacoma, Washington, that he truly found his path and real estate. He now repositions commercial real estate across the US with a special focus on RV and mobile home parks. Gabe, we’re excited to welcome you to the show.

Gabe: Andrew, thanks for having me on.

Andrew: Let’s start out by just hearing a little bit about your story, and how in the world you ended up in manufactured housing.

Gabe: Pretty much every person in real estate that I’ve talked to, my story is definitely not linear. I feel like that is what you see in real estate. People don’t jump. They’re starting on one path, they go a different direction, and they end up in real estate, and they’re loving it. That’s the same thing for me.

Like I said, I got started in corporate. I was in Microsoft, but I always knew that I wanted to do my own thing. I wanted to have my own business. I really wanted to create my own schedule that was my main focus.

I was working at Microsoft. I was trying different things. I’ve built an ecommerce company. I jumped into digital marketing, all these different side businesses, trying to find a way out, trying to find a way to make money, passive income on the side. It wasn’t until, like I said, I did that first triplex in Tacoma.

I did a flip. Obviously, flips take a lot of effort. Hats off to all the flippers out there. It is quite a business. But I did a flip. I think we made $86,000 on that first flip. That was the most I’d ever seen in a check. I was like, okay, there’s something to real estate. This makes sense.

That was in 2014. It was a long time ago. I didn’t really jump into RV, mobile home parks, or even jump into real estate full-time until 2019–2020. There’s a long period there where I was working corporate, and I was still on the side. I was flipping houses, I was doing wholesales, just dabbling. It took me about six years to finally make the decision and jump full-time into real estate.

I got there. Let’s see, it was 2019, 2018-ish. I’ve done some flips, I’ve done some wholesales. I just got to the point where I need to make the decision and make that jump, get into it full-time. I had been networking a lot, meeting people. Somebody I had met was going into mobile home parks. They had taken a course, I can’t remember. It was the guy who does a pretty popular course.

Andrew: Frank Rolfe, the MHU boot camp?

Gabe: Yeah, that’s it, MHU boot camp.

Andrew: MGU boot camp? Awesome.

Gabe: He did that. He was really interested in mobile home parks. He talked to me about it. I’d actually been thinking about going into multifamily, but then he sold me on mobile home parks. You own the dirt. You don’t have the broken toilets, all that jazz. I said, all right, let’s do it.

We focused on mobile home parks, started marketing. It took us probably eight months before we bought the first one, six or eight months. But once we bought the first one, we got that turned around pretty quickly making some good cash flow. A couple of months after that, we bought the next one.

Andrew: That’s fantastic. When was your very first mobile home park purchase?

Gabe: I think we closed at the very end of 2018.

Andrew: Tell us about that park. Was it an RV park, an MH park? What did it look like? Where’s it located compared to where you’re located?

Gabe: It’s in George Washington. It’s just this little dot of a city in Washington State on the east coast of the mountains. Interesting backstory to that city. This guy wanted to create a theme city in the theme of George Washington, that era of history. He was a potato farmer, and that was his main business. He had all the skills in potatoes, but he didn’t have the skills in redevelopment.

He got started, but he didn’t actually do anything with it. But he still owns all the land and all the businesses in George. He was parceling them off and selling them.

We reached out to him, and we got great seller financing terms. He gave us 10% down. It was three-something interest, we got it for five years. But it was in rough shape. It was not your class A mobile home park at all.

Andrew: Those are the best ones. Those are the best ones that cut your teeth on, the ones that are a little rougher. You got a firsthand experience.

Gabe: Yeah, for sure. There’s a lot of learning. That’s for sure. It was a mixed use mobile home RV. Actually, there were more RVs than there were mobile homes there. They’re long-term-stay RVs, though, so it acted like a mobile home park.

Most of the workers there worked in the neighboring farms. This area was very farm-oriented farmland. There were a lot of Hispanics, which was great, because earlier, I learned Spanish and I got to bring that out of my pocket and speak with the residents.

Andrew: How many lots was that one?

Gabe: It was 27 lots. Actually, just now, I called the city yesterday. We’re looking to expand, we’re going to add. Hopefully, we’ll be able to double the footprint. At least we got quite a bit of land in that area that we can expand into, but it was in rough shape.

Like I said, there’s been a lot of changes. We had to redo the entire sewer system. A lot of the pedicels had to be replaced. There is a duplex or I don’t know if it’s a duplex, but there’s just a really rundown house on the property. We originally were thinking we were going to turn it into a unit that the property manager could live on, but we ended up buying another property that was pretty close, another RV mobile home park, so she lives on that property.

We still have this house. We haven’t done anything with it. We really should. The end goal was to flip it and make it nice, but it’s still there. That was the first one. A lot of scars from that one, but it was a good learning experience.

Andrew: Tell me about the sewer system. Was it private sewer, I’m assuming? What did that look like having to replace all that?

Gabe: That was public up to the street. It happened probably six months into owning it. One of the tenants let us know that there was backflow. We fixed that backflow. A couple of months later, it happened again. We fixed that one. A couple of months later, it happened again. We just kept having this recurring issue, and you’re like, what is the deal?

We eventually dug up a portion. This area is really flat. The land is very flat. People grow these huge really, really tall trees to reduce the wind. I love trees, except for when they’re in the mobile home parks, because those dang roots. The trees had gotten into the roots and just completely decimated these lines. We had to dig them up and put in PVC.

Andrew: Wow. What was it made of when you bought it? What were the sewer lines made of?

Gabe: I think it was concrete.

Andrew: Okay, concrete or like clay?

Gabe: Yeah. I’m not good at just judging based on looks, but it was like one of those two.

Andrew: Got you. Now, that was 27 lots, cut your teeth. How many lots are you up to now? Do you have more parks? What does it look like since 2018?

Gabe: After that, we bought another RV mobile home park. That one had 44 lots. That one is doing great. That one’s on septic and well, which everybody, when you’re learning about mobile home parks, they all say don’t get septic and well. The numbers on this were just way, way good. The seller gave us 2.67% interest, which is 10% down seller financing. We’d be dumb not to do this.

It turned out to be a great park. It used to be a KOA. I don’t know if it was a KOA, but that style of property. It had this really big, convenience store/apartment unit/external public restrooms on the front of it, which is perfect for our property manager to live in. And then there was a whole bunch of mobile homes and then long-term stay RVs.

We brought that one in. That one, again, had a lot of things we had to do. We had to replace the septic system, which I had no idea septic systems are so expensive. That was the first septic system I’ve ever replaced. It cost $36,000, and I was just like, Jesus Christ. How do you do this?

That one’s doing really well. Again, we own both of these. Right now, they’re doing great. Since that second one, I got really interested in just other asset classes. I looked at self storage, so I bought six self storage facilities last year, and that brings us to today.

Andrew: Got you. You just have the two parks under 100 lots. That’s what you’re focusing on. It’s RV-MH split, right?

Gabe: Yup.

Andrew: My big question for you is, how did you get educated on mobile home parks and RV parks before diving in? And what did that look like? I know you said you had a friend that attended the boot camp. Are you both partners with that friend and both of these deals?

Gabe: Yup. We partnered on both the deals. It was really just looking online and reading about people who have gone through it. I listened to a podcast back in the day. Dang, I can’t remember the podcast either. I listened to a guy who does mobile home parks, his podcast. It was really just going through bigger pockets and reading about what other people have done.

In real estate, I always like to say it’s not rocket science. You need to have a general framework and understanding of underwriting and finances when you get into a park. But outside of that, if you get reports, if you have somebody come out and do inspections, it’s not super crazy. We learned a bit and then we jumped in. We got our hands dirty, and we’ve gone from there.

Andrew: It does seem like you got burned a little bit on the sewer, on both of these. It had to get replaced. What do you think you could have done differently in due diligence that maybe you learned? If you bought a third mobile home park, maybe you do differently, since these two, the sewer issues popped up pretty soon thereafter you closed?

Gabe: Sewer scope, obviously. Just go in there and get them scoped. We didn’t get the line scope when we bought that first one. We just had someone go out there. I think what they did is they actually looked at the mobile homes thinking that we own the mobile homes, but we don’t. We actually did when we bought it. We owned a few of the mobile homes. We promptly sold them to the tenants. What I think didn’t happen was a scope of the actual sewer line.

Andrew: Yeah, that’s big. Then the move to self storage, maybe you could share some light on that. I’ve gotten into self storage as well. But I’d be curious why you moved away from mobile home parks. Was there something wrong with these? Maybe you could just talk briefly on that.

Gabe: We were in mobile home parks. The properties themselves performed really well. I always say, there is an absolute need for evictions. It’s a necessary part of the process, but it’s not something I truly enjoy. I was looking at other asset classes that don’t have somebody living on the property, so I looked at industrial and self storage. I really liked self storage just because it’s very easy to automate, so I jumped in.

Andrew: Tell me, would you say that that was the hardest part of the business or the toughest part of the business for you, was the eviction process?

Gabe: For mobile home parks? Yeah.

Andrew: Okay. Is it in the states you’re operating in? Is it a little bit more restrictive being in Washington compared to other states from an eviction standpoint?

Gabe: I haven’t owned mobile home parks outside of Washington state. They’re both in Washington, so I can’t really compare it to anything. When I speak with other investors, other operators, they say that Washington is difficult, but I can’t really make a judgment there.

Andrew: How long does it take from start to finish typically to get someone out?

Gabe: So far, we have been successful using cash for keys. We haven’t had to go through the full eviction process. It’s just that the drama that ensues when the eviction process does start. With self storage, I have no qualms if somebody is not paying their rent and they’re putting their stuff in one of the units.

I have no issue of starting the eviction process, but with mobile home parks, it can get difficult. It’s just one of the things that you have to deal with. A good thing is it’s a necessary part of the operations of the business, but it’s just something, and I had always wanted to check out other asset classes. It’s just something I decided to try out.

Andrew: Got you. You got into these first two. It seems scrappy, right? They’re a mix of MH, and RV, and there is some seller financing, which seems like you got some really good terms on. Has your strategy changed at all since getting into these two? Is there a new strategy that you would say on your next deal that you’re looking for?

Gabe: Yeah. Now I’m looking at bigger properties. I’m still looking at self storage. I have my eyes open for really good mobile home RV park deals, but we’re not actively investing a lot of dollars into our marketing for off-market stuff. I generally only look at off-market deals. I don’t look at broker deals. Not that there aren’t good deals out there with brokers, just I don’t do that.

Now, I’m doing my first syndication with an 80,000 square foot self storage facility coming up here soon. The last deal I did was relatively large, too, for self storage, and we raised capital for that. Now, I’m looking more at the syndication model. I haven’t done it yet, so don’t ask me questions on how it goes. I’m learning right now.

Andrew: No, that’s awesome. That’s really cool, and I totally get that and without going down the rabbit hole of talking too much about storage, because I do like some aspects of storage. But as I step back and I look at my portfolio, we have 11 self storage facilities and 33 mobile home parks. I prefer mobile home parks. If I could pick the same income, the same cap rate, I would choose mobile home parks. I’d be curious to see what you would pick.

Gabe: There are pluses and minuses for both.

Andrew: What are those? Maybe you can just elaborate a little bit on that.

Gabe: When you own an asset, it really comes down to property management. Can you find good property management? Can you get good systems in place and somebody who can adhere to those systems and really run the business well?

For mobile home parks, I found it difficult to find good property management. That is the hang up that I had with mobile home RV parks, not that they’re not out there. Obviously, you can find really good property managers. I’m sure you have really good property managers. It’s just more difficult.

With self storage, I ended up finding a really good third-party property manager who is just crushing it. It got to the point where I was just like, okay, this person is in place, she’s really good. Their team is really good.

The problem with self storage is, first of all, you have way more people than you do with mobile home parks. A $3 million self storage facility is going to have 500 people. A $3 million mobile home park could even have like 50 people. There’s a huge difference in the number of people that you’re dealing with.

Also with self storage, one of the biggest issues that I’ve figured out with self storage is vandalism. We just have so much vandalism. It might be the locations that we own our properties in. We’ve been battling that a lot.

Actually, we haven’t really been talking just about RV parks. We’ve been talking about long-term stay mobile home-esque parks. I was thinking of just RV. It’s something I haven’t done, but it is something that I might be interested in just because you have this opportunity to be a little bit more creative in the alteration of the property, making it really enticing to people to bring in their short-term stay RVs.

This is a long way to say. I’m not sure which one I like better. There are pluses and minuses to both right now. I’m in self storage.

Andrew: I think, also, like you’re saying, you’re upgrading. You’re going with an 80,000 square foot storage facility. In MH, if you go after an 80-, 90-lot mobile home park that’s all tenant-owned homes, that’s going to be a lot different to manage than the smaller ones that you have currently that have that RV component.

I think the big thing comes down to the low turnover. It’s been proven in my portfolio that less than 5% of the tenant-owned homes move out every year. When people own their homes, they stay regardless. They’re there, and that just provides more stability of the income, of the cash flow, and has more reliability. That’s the one thing.

In storage, the pricing is such a big component in managing that from a revenue management and dynamic pricing standpoint. Also, if you’re in a big market, it’s counterintuitive in a sense because you’re competing with these REITs that have a whole team of people just working on pricing. If you don’t check it every week, and they drop their prices on their 5 x 10s, all of a sudden, you’re going to notice your move out some 5 x 10s, and you’re like, wait a minute, what’s going on here? Oh, well, they cut their pricing, they have a new promotion, or something like that.

The RV parks, I think, are interesting. But again, it’s the stability of the income stream. I always think of the worst case scenario, like a recession. What is an RV park going to look like? I know a lot of guys are all big on RV parks right now, because you can get in at some attractive cap rates. You can add value different ways.

Someone told me that you can provide golf carts, and then they’re charging people to use the golf cart while they’re in the RV park. It’s more recreational. They come there and they added some recreational stuff, like a waterpark that was like these blobs and things that they can play on, and they charge per day. It was interesting, because those are ways you add value and increase the NOI.

Again, when you’re in the middle of a recession, do you think people are going to be paying for those little add-ons? I think at the end of the day, they’re going to be paying for their lot rent where they stay. Same thing with storage. I think it’s interesting. It does have a proven track record in recessions, but it is still new as an asset class overall. Anyway, I know we went down that rabbit hole.

Gabe: That is another thing that I thought about for storage. How solid is the need, I guess, out there in society? Obviously, storage is not a necessity. In mobile home parks, people are living in these parks. This is where their house is, this is where their roof is, and that’s a need.

That’s something that we need in society, but self storage is not necessarily a need. It’s a nice-to-have. Like you said, the previous recessions in history, I didn’t live through them, but I’ve looked at charts. Self storage has proven to be recession-resistant. I don’t know if that means anything, but I still come back to the fact that it’s not a necessity in your life. It’s just nice to have.

Andrew: Let’s go back here. This is a question I asked all my guests. What are the most important things that passive investors—if we’re putting on a syndication, those LP investors—need to look out for before investing into a mobile home park? What would you look at? If you were going to invest in another operator, what would you make sure to ask the operator or check before investing in that deal?

Gabe: The first thing is just track record. Have they done this before? Do they know what they’re doing? Do they have a plan? I had people invest in my deals when I was very, very new, and I thank them for that. I think they did, because I had a plan, even though I didn’t have a track record.

Obviously, it’s better to invest with people who have a track record. You said you have 36 parks, so somebody like you who has tons of parks, has a lot of experience. That’s obviously a better sign than somebody who doesn’t. So track record, a plan, and then if you’re investing passively, it’s always a good idea to just understand the basics of how to underwrite a park.

You don’t necessarily have to go through the entire process, but just being able to understand how the finances and how P&L works for mobile home park would be good, because then you can ask for it and just do your own little bit of due diligence, and decide whether or not the plan that they tell you is a reasonable plan. If they’re expecting to double the rents, and you don’t think that’s possible, then that could be a red flag.

Andrew: Also, just from an ethical standpoint, do you want to be involved in a deal where the operator is creating value just by going to these people and saying, okay, your rent’s $250 a month right now, next year, it’s going to be $500 a month? That to me seems like a very lazy way to squeeze NOI, where when you’re filling vacant lots, you’re rehabbing empty homes, you’re doing some capital improvements to the property, that’s forced equity. That’s putting true value into that.

Some of these private equity firms, from the research I’ve done, they’re using an equation based off of other metrics, like median home price, and they’re saying, oh, well, based on this metric, lot rents should be X in this market. Even though all the market rents are $300 a month, it should be $500 a month, so we’re just going to go and rip the band aid off. That’s why we’re getting a bad name in some of these bad articles that are coming out, and I agree.

Going back to the underwriting question or the underwriting point on reviewing underwriting just from a basic level, one thing I’ve seen a lot of, because I’ve invested passively this year in five deals in mobile home park and in one RV-MH type of deal, and one thing I’ve seen is some operators that are capitalizing the park-owned home income.

It looks really good, the numbers are really great, but they’re capitalizing at a seven- or eight-cap, the park-owned home income, where a bank is not going to do that, an appraiser is not going to do that. If you don’t understand what that means, the numbers could look a lot better than they actually will turn out.

Gabe: That is my biggest pet peeve with looking at broker deals. There are specific brokers out there who are really good about it, but a lot of brokers, when they’re selling mobile home parks, they capitalize the park-owned home income. It looks like a 15 cap, and then you go into it, you’re like, this isn’t half of that. But yeah, that’s a great point.

Andrew: Just a real breakdown of what that is, the lot rent is what gets capitalized to determine the value of the property. If a lot rent is $300 a month, you would take that times however many lots, and divide that by a cap rate that the property is trading at, and that’s the value of the property.

Now if you have $300 a month lot rent, but you have $600 a month park-owned home rent, because you’re doing street rentals, you don’t capitalize the $600 a month fully like you would the $300 a month lot rent. It’s getting in the weeds, but I think at a high level, you just need to differentiate the two. Park-owned home income and tenant-owned home lot rent income are two different things.

You’re coming on track record, I 100% agree. That’s the number one thing you would look at. I think you and I got started because people took risks on us. They were rewarded for those risks. Because they took more of a chance, they were rewarded more.

If you’re investing in a newer operator, you better be getting the best in the industry terms from the deal. The experience part, all I kept thinking about when you’re saying experience is while I’ve made mistakes, I’ve made a lot of mistakes and learned from those. I was doing a podcast a couple of weeks ago, and I was saying, we started with a 50-point due diligence checklist, and every single deal we’ve bought, we’ve added something new to that checklist. It’s up to 300 checkpoints now.

It’s learning, and it’s having sewer issues, like the ones you had, which I’ve had the same issue, where we should have scoped the lines and we didn’t, trying to save money up front. But now, it’s like, no, we’re going to do that every single time.

Gabe: We’re doing that. This is happening.

Andrew: Yeah, because then you find out stuff, and you can negotiate with the seller while you still have leverage to get a reduction. Or hey, I did the scope, it cost me $3000, but there were roots in the lines on this lot, and this lot, and this lot. Mr. Seller, I want you to go ahead and jet those lines and get them cleaned out before we close. That’s a very clean ask of a seller. But then after the deal is closed, you can’t do that. Those were some good points there.

Let’s just talk about this briefly. With the way the economy is heading, with way higher interest rates, and everybody is just questioning what 2023 is going to look like, how do you think specifically mobile home parks will fare during this impending recession?

Gabe: If you look back in history—and again, I haven’t gotten on through previous recessions, I’m new to the recession game, but I’ve read a bunch about them—mobile home parks, I think they fared at the best. When you’re talking about asset classes, mobile home parks are the most recession-resistant, which when you think about it, they’re the cheapest, most affordable form of housing.

Housing is the very building block of life. The first need that you get outside of food and water is housing. It makes sense that mobile home parks are one of the most recession, if not, the most recession-resistant asset class out there. I don’t think mobile home parks are going to be affected that much.

It was stuff like I own. It’s a hybrid between mobile home and RV. Even that, I don’t think it’s going to be affected that much, although they will be affected more because it’s a lot easier to drive an RV out of a park than it is to get an entire home out of a park. But on the whole, I don’t think they’re going to be affected that much.

Andrew: What do you think about when people say, hey, your tenant base is the most fragile? They’re the low income tenant base, the low income people that are most affected in recession. How do you think that will play out?

Gabe: If you got good operators, they’ll know how to help their tenants. If we ever have a tenant who’s falling behind on rent, we have contacts with our housing authority. We give them the contact information on a first name basis with the person in the housing authority, and we just call them up.

Or if this person needs help, then they can get assistance. If a person is in your park, and they’re running into financial issues, and you’re a good operator, you’re going to help them stay in your park.

Then the other thing, obviously, is not to jack up the rents during a recession, because if they’re more price sensitive, then that will definitely affect their daily life.

Andrew: Those are two really good points. Thanks for sharing that. Also, going back to the eviction conversation, as a park owner, same thing in storage. You never want to evict or auction off units. When you auction off units, everybody thinks, oh, you make all this money. No, you almost always lose when you auction off a storage unit.

Gabe: Yeah, it’s all junk.

Andrew: It’s all just junk. The same thing in mobile home parks. When you have to go through an eviction process, you’re never going to get that money back. You’re losing all of those costs. So we do the cash for keys program, where we literally say, hey, before we file this eviction and go down this road, hey, we’ll pay you X amount, whatever that is, because we’re going to pay the attorney that amount anyway.

How about we ask them? Hey, how many days do you need? Okay, we’ll give you the X amount of days, and we’ll pay you this so that you get a soft landing somewhere else. Like you said, you want to try to help them all you can, but then at a certain point, the cash for keys becomes a vital option. That’s why we almost never get to the eviction process, because it’s not a win for anybody. It’s a lose-lose.

Gabe, we’re running a little long on time here. Last question, what does the perfect mobile home park look like in your eyes from your time in the space, and why?

Gabe: The perfect mobile home park, I guess it depends on whether you’re buying the park or owning the park. If you’re owning the park, then it’s a 100-unit mobile home park that has paved streets, streetlights, everybody’s got their own mailbox, manicured lawns, all that stuff. It’s just a beautiful mobile home park.

If I’m buying it, then it is a 100-space mobile home park that’s in a good area of town, but it’s rougher. It’s got some abandoned homes in there, it’s got some issues, some hair on the deal, and it’s a seller who’s very willing to negotiate seller financing.

Andrew: I love it. Congrats to you and your success, Gabe. If any of our listeners would like to get a hold of you, what’s the best way for them to do so?

Gabe: The best way to reach out is just check out the podcast website. It’s therealestateinvestingclub.com. If you want to email me, it’s just gabe@therealestateinvestingclub.com. That’s it. I appreciate you having me on.

Andrew: Yeah, thank you so much for coming on the show today.

Gabe: Absolutely.

Andrew: That’s it for today, folks. Thank you so much for tuning in.