When someone goes into real estate investing, mobile home parks and parking lots aren’t exactly the first things that come to mind. A mere decade ago, the industry was composed of a few small, scattered players. Today, however, we see bigger companies starting to see the investment value of these properties and the decent returns they provide. Scott Carson talks with real estate investor Kevin Bupp of Sunrise Capital Investors about this type of real estate investing. Kevin has been working in this misunderstood niche for sixteen years and has seen nothing but good years during that time. Listen and learn why investing in mobile home parks and parking lots is so underrated.

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Watch the episode here

 

Listen to the podcast here

 

Why You Should Invest In Mobile Home Parks With Kevin Bupp

We’re honored to have Kevin Bupp join us. You may know him from years ago in fix and flips, rentals and apartment buildings. Kevin has been investing lately in the asset class of mobile homes, parking garages and parking lots as well. If you’re looking for some alternative classes of investments to look into some high cashflowing, low labor-intensive assets, you may want to listen to this episode on mobile home investing and parking lot investments. I was blown away by this episode with Kevin. I took a lot of notes and I’m sure you will do the same thing. If you see anything out there nonperforming of these two asset classes, this is the episode for you.

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We’ve got a very special guest, somebody who I was on a podcast years ago, one of the first podcast I was ever on. I’m glad to have him on because he’s doing some amazing things out there that I’m sure many of you will want to take some notes on. You probably want to follow up on this guy because a lot of people are looking for affordable housing out there. A lot of people are looking to invest in that asset class among some other things that this guy is rock and rolling. This guy is the Founder and CEO of Sunrise Capital Investor, which invests in mobile home parks, parking lots, apartments, offices and single-family homes all across the United States.

He has many years of experience in an up and a down market before in educating investors to locate, acquire, and create higher than average returns from the widely misunderstood niche of mobile home park investing. He shares his expertise through the Mobile Home Academy and also as the host of the Real Estate Investing For Cash Flow Podcast. You have to check that out wherever you listen to podcasts. That podcast has become one of the hottest real estate podcast on iTunes. We’re honored to have the man, the myth, the mobile home investing legend, Mr. Kevin Bupp. How is it going?

Scott, I’m doing great. Thanks for having me. I’m very much looking forward to this. I need to update that bio first off. I’ve aged since I wrote that. I’ve been part of the roller coaster. I’ve played the up, crashed, gone down, come back up again and now we’re going back down, hopefully not back down too far. I’ve been through two cycles or we’re not into this one yet, but it will be a cycle when you look back at history here in a couple of years. In any event, I’m glad to be here. Thanks for having me.

I’m glad to have you as well. Where’s home for you again, Kevin? Where do you live?

I live in Clearwater, Florida.

It’s a gorgeous area. As I say, God’s waiting room most of the time. Let’s dive into this a little bit. We were talking beforehand to catch up a little bit. You’ve been through an up and you were saying something about 2008 was your “having your ass handed to you” business. You and I have seen this a lot before. I also went through a rough time back then being in the mortgage business, the fix and flip side, and having my ass handed to me as well. What lessons did you learn from that more so than anything else that helps you rebuild and helped you maybe sleep a little bit better now that we’re going to see somewhat of a downturn?

It’s one that I’ve reflected on many different times over the years. One was to tamper my ego down. My head was big. I was in my mid to late-twenties at that point. I only knew things going well. I don’t come from a big education. I learned with the community college, grew up in a small town, tended bar through community college and grew up in a blue-collar family. We had everything we needed but we didn’t have a lot and we didn’t have a little. I’m not going to play the whole poor role here but we surely didn’t have a ton. When I started making a lot of money on my own, I was very proud of that, my ego got in the way. I felt like I couldn’t be beaten. I got my ass handed to me in 2008. There are a couple of things that ultimately played out. All my investments were in Florida and it was one of the ground zeros. There are a couple of others throughout the country but it got hammered quite severely. I was heavily invested in single-family homes.

I had a fairly large single-family home portfolio, also multifamily and a few other miscellaneous commercial assets. The single-family stuff is what I had been taught originally. It’s what I built a system around and we get complacent. Once we see things going very good, we get comfortable making money and the system’s working. However, I knew that there were a couple of weak points in buying large portfolios of single-family properties. A couple of those where my business at that time were the inefficiencies. We own stuff in five different counties. It was spread out and our maintenance crew were running from one house to the next house. Our leasing guys were running from one house to the next house. It was a very inefficient model. In addition to that was how our debt was structured. We had a lot of cross-collateralized loans. We would get private money.

We’d buy 8 to 10 homes and then go get a commercial loan or line and pay off that private money. Cross-collateralized those 8 or 10 homes. We then had a bunch of different tranches like that of commercial debt. Number one is the inefficiencies with the single-family model. Number two was the cross-collateralization and also the type of debt we put in place. That was one that hit home once things started going south. We had fairly low leverage across the board. We were at a 66% loan-to-value. In the grand scheme of things, we were safe. However, in Florida, most of our properties within eight months were negative equity. They lost all that value. The part that hit us hard was the type of debt we put on most commercial debt. It’s got a five-year balloon or reset in place. In addition to that, it’s a shorter amortization term. Those factors and the timing of it all.

A lot of our loans were coming due right around that time. There was no equity there. We had some terms and a few of our loans in place that if the values fell below a certain point, they could call the loan due. We had a disaster in our hands. Getting privier on loan terms was a big thing for me. Identifying those inefficiencies in the single-family home side of things was a big part of it or the learning experience. The funny thing about this is that I identified the inefficiencies a few years before all this went down. We started buying multifamily properties but I never stopped the single-family machine because it was there. To me, it made sense and on paper. It looked like we were worth a ton of money.

It never did as well or it was never as stable as my multifamily or commercial properties. Looking back, I wish I would have made the hard decision, made a shift, got away from my comfort zone and put not all my eggs in one basket or another basket. I shifted or pivoted when I knew that the time was right. I didn’t want to get out of that comfortable and complacent zone. Those are some of the things I’ve made myself aware of. Another one was being honest with yourself about, are you a cashflow investor? Everyone talks about passive income and investing for cashflow. If you make up your own definition of that, are you being honest with yourself? I found myself in a situation where we did cashflow but to my standards, it was nowhere near sufficient.

It was not in a position to where there was any hiccup that that cashflow wouldn’t quickly go to a negative state. More so, I fell in love with the equity and what I was worth on paper. At least in the single-family side. I’ve got $30 million of equity that I’ve built. I’ve done such a great job and I’m making cashflow. However, when there was a little bit of blip on the radar screen, things went south very quickly. Instead of making cashflow, we were making up the negative debt payments and our complete model imploded on us. It was a very ugly time. Anyway, the last thing here before we can move on is the scalability of single-family homes.

What I realized was that I wasn’t married back then. I had a lot of time on my hands. I enjoy what I do and I loved hustling back then. The amount of energy it took me to put together a portfolio when things crashed at 122 single-family properties that I owned. The amount of energy in many years took me to put that together. I could have spent a couple of months and go and buy a 120-unit apartment complex and accomplish the same thing. I look back at how I could have better spent my time as far as scalability and vowed to never do that again. I vowed that moving forward, I was going to invest smarter and a much more scalable business model. That’s ultimately how we found out about mobile home parks.

You showed up, got the scars and the T-shirts to go along with that.

A couple of them still.

 

Don’t we all? You learn more about yourself and we all fall in love with those ego metrics. The equity and values on things, but when it comes down to it, we don’t shift off a center unless we’re having something that affect our comfort zone. It’s very comfortable to keep doing business as normal. I talked to a lot of investors and a lot of people doing the same thing. They’ve been doing the same thing and they’re wondering, “Why I can’t find single-family homes. The REOs aren’t there anymore. What do I do? I’m overpaying now.” When you start adjusting your numbers to try to find deals, that’s the kiss of death. You’ve got to adjust and evolve to something. You evolve into the commercial side, apartments, and the mobile home. Let’s talk about it. That’s such a valuable asset class to be in especially with affordability in homes being difficult to find, people are struggling. It’s a great business. Let’s talk about your pivot to the mobile home side.

There’s always been a shortage of affordable housing in the US. This isn’t a new thing. Even all the single-family portfolio or the apartments owned back then was all B-minus, C-class type stuff. It was all workforce housing, whether it was single or multifamily. I liked that space. I understood the demographic that we were serving. I felt very comfortable. It could be a little more challenging with the tenant base. At least it is to those that are used to managing high-end newer properties A-class type things. I took a couple of years away from real estate but I wish I wouldn’t have but it was damaged control for a couple of years. It’s going through the court system judgments, getting served on daily basis. It was an absolute nightmare.

As we know, the courts are backed up that this thing dragged on forever. I took a couple of years away from real estate and I started a few other businesses non-related to real estate to make money and keep my head straight. In about 2011, I got the itch. It never left. The fire was still burning. I knew that I wanted to get back in and I wanted to rebuild this empire that I thought I had. It was an empire because it crumbles quickly. I wanted to build something a little bit more of a stable foundation. Looking back and reflecting, the one thing that seemed to work were my multifamily properties. The only reason that we had to get rid of them is we had a lot of local bank and commercial debt on them.

When those notes came due, I’d already defaulted on a lot of single-family stuff and I couldn’t get new debt. Number one, debt wasn’t available. Number two, my credit was shot by that point in time. We had to fire sell them. We had to get rid of them. We were forced to. Looking back, I realized that was a much more efficient business model. The original plan is to get into multifamily. What I had done for the year 2011, 2012, I spent as much time as I could with not only people that were multifamily that had made it through the downturn, but people that had maybe started getting into that space of post-recession phase.

I wanted to learn how the game had changed. When I say that I stepped away from real estate, I didn’t pay attention to anything other than damage control and keep my mind straight. Lending had completely shifted. It was a new world. I spent a lot of time educating myself on what this new world looked like and how I was going to create this business plan and move forward. During that educational journey, I was introduced by a good friend of mine to a gentleman by the name of Randy. He had been a local banker for many years. He retired from the bank and ended up with three mobile home parks. It’s a fairly large mobile home parks here in Florida.

My friend was like, “You should go have lunch with Randy. He’s a smart guy. He can give you some insights. He’s been a banker for many years. It wasn’t to learn about mobile home parks.” Randy is a good guy. I love meeting new peoples and as they say, “Your net worth is your network.” Randy had been quite successful in his time. I had lunch with Randy and that two-hour lunch turned into, why mobile home parks? Why they make more sense than multifamily? Why I’m stupid because I want to buy multifamily? I should buy mobile home parks. He’s a nice and funny guy. He piqued my interest in many different things about that niche that I hadn’t ever even considered as an investment. He opened my eyes to something I had never realized before.

After I left that lunch meeting, I vowed that I was going to buy a mobile home park. I either wanted to prove or disprove how great these things were. This was 2012 and that’s what I did. I left that lunch and gave myself twelve months. I’m of the mind that if you’re going to pivot and get into something new, even if you’re an experienced real estate investor, if you want to go from buying multifamily to self-storage, you should allow yourself a year. This is like deep dive, bootcamps, reading as much as possible. If it happens sooner, great. This doesn’t happen overnight. It takes time. That’s what I did. I dove in and it took me fourteen months to buy the first property. I bought one in Atlanta. It was the end of 2012 when I bought that first property. I still own that one and worked well. I bought the next and we built a business out of it. We now own parks in thirteen different states and that’s been our core business since then.

Let’s talk about those a little bit. You said thirteen different states. I’m sure Florida is your favorite because it’s the closest to you.

I love Florida and I would love to own more in Florida. We do own one in Central Florida but for the great asset that we like to own, for the quality, and for the type of returns we like to receive, it’s very hard to buy that quality here in Florida and get the type of returns that we’re seeking. We only own one in Florida. I love to own all of them in Florida. It would be much easier. However, that’s not the case. We have stuff up in the Northeast, New York and Michigan. We’ve got stuff as far West in Oklahoma and Kansas. We’ve got stuff in the Southeast, Alabama, Kentucky, Georgia, North Carolina and things like that. We’re all over the Eastern seaboard. We do venture out West a little bit, but no further than Oklahoma.

What makes you excited about mobile homes? When somebody’s seen a park, what are some of the things that get your blood flowing?

One of the interesting things that Randy brought to my attention, this has changed a little bit over the years. Our niche has gone from being under the radar to very much above the radar. Over the years, lots of private equity institutional players are not just tiptoeing into our space, but they’re coming in with hundreds of millions of dollars trying to deploy it in this asset class. It’s shifted over the years. Back then it was very much still a mom and pop unconsolidated niche. There weren’t many large operators that owned a majority of a market or of the market in general. A lot of these mom and pops were either first-generation or second generation.

A lot of these people had a decent idea many years ago. Probably their friends made fun of them when they built these things and they turned into cash cows for them. They own them free and clear. However, what we ran into was a lot of these moms and pops didn’t do a great job of being a business owner. Some did but a lot didn’t. They didn’t view it as a professional business. Their expenses were out of whack. The rents weren’t anywhere near the market or where they should be because they became friends with the residents. There have been many parks we bought that hadn’t raised rents in fifteen years. That was a very common theme. One of the things that attracted us to space was this fragmentation of this niche. We could buy assets that had a lot of value-add potential from these existing owners that were at this point in time, their life were aging out of them.

The average age of owners that we’ve purchased from, at least in the first five years, was 82 years old. Either they’re at the point to where maybe they’re having some health issues or they’re just tired. A lot of these owners worked in the parks. They didn’t own it like you and I might as a professional business. They were out there unclogging drains and they were the Roto-Rooter guy. They were mowing the grass and collecting rents. They were doing everything. A lot of them were getting tired. I saw that as the biggest opportunity. Even back then, multifamily was still very consolidated by a lot of large institutional players and professional operators. Mobile home parks weren’t.

I saw that as a big opportunity for us to get in and buy assets that we could add value to very quickly. We could fix those very minor problems and buy something that truly cashflowed and offered a much higher return than that of a traditional apartment complex. This is the example Randy gave me that piqued my interest. One of the big things is when you take any city in the United States, Tampa, Florida for example, 100-unit, C-grade apartment complex. What type of return you might be seeking there? You might be paying seven cap for that back then. That same 100-unit mobile home park, same C-grade in the same area. You could expect to get that for anywhere between a 9 and 10 cap. This is a few years ago. It’s a different game now. You’re talking 300 basis point yield spread on average as far as returns are concerned from multifamily to mobile home parks.

That was very intriguing to us. I like return and it seemed for the same effort I could get higher returns. To your original question, when we see a park, what excites us? That’s one of the big things I know that I can go in. Most of the problems in mobile home parks are fairly small and easily fixed. For example, infrastructure. Back when a lot of these parks were built, water and sewer wasn’t very expensive. The traditional model was when these park owners built these communities, the people would move their home in. The rest own their own home. It’s paid to rent-a-lot. Included in the rent-a-lot was also the water and sewer charge. Back then, if the infrastructure is brand new, water and sewer wasn’t very expensive. Nowadays, water and sewer is incredibly expensive.

The infrastructure has aged as well. Not only is water and sewer much more expensive, people abuse it, but now you’ve got pipes that are leaking and water that’s going into the ground and not going through a faucet. I could easily look at a P&L and say, “I could save that park $100,000 a year by doing two things. Number one, fixing the leaks, which might cost me $10,000. Number two, spending about another $20,000 in installing submeters at each one of the lots and billing the residents back for their usage.” You could see anywhere between a 34% reduction right then and there because they have to pay for what they use. Little things like that that run rampant in our niche are easily fixable. They excite me when I see that in the P&L because I know that we can fix it easy.

 

A couple of points there. We see that a lot of places where people get excited about having a business. They’re going to retire from that business and they never end up retiring because they’re working a job all the time. Similarly, in the self-storage industry, a lot of mom and pop were in the self-storage facilities. It’s turned into a job versus a hobby for the most part.

You bring up a good point. Self-storage, I’d say that was the original mom-and-pop frontier. Mobile home parks were very similar in nature and both of them have been consolidated greatly over the past years. There are still a lot of mom-and-pops out there. The one challenging thing or the one big difference with mobile home parks and self-storage is that mobile home parks is the only asset class that has a diminishing supply. That creates a very pent up demand from the supply-demand economics. The number of parks is decreasing every year, either due to redevelopment. When it was built many years ago, it was not in the path of progress.

It was out in the middle of nowhere. The city has built around it or the path of progress is running through it. There’s a higher and better use of that land. Developer buys it, builds a shopping center or something of that nature there. Also, a lot of parks fizzle out. A lot of operators are bad operators and they run them into the ground so bad that it’s not worth building back up or restarting again and they go away. Everyone is fighting for the same number of parks that are in existence. It makes a little bit different than self-storage. Self-storage has got new inventory coming on the market each and every year. Lots of it are being built.

Is there a number of pads in the mobile home park that you limit that you are looking at? Are you looking at all types?

Our business models evolved over the years. The first one that we bought which we still own in Atlanta, that one is small. It’s like 30 to 34 lots. We won’t consider anything less than 100. If it happens to be near one of our other communities, we’d consider smaller, but 100 is about the minimum that we’d be looking at. The bigger, the better. You get scales of economy and lots of efficiencies with the larger operation.

That makes sense. We were talking about how you’re also looking to dive into it a little bit different asset class that falls. Let’s talk about what you’ve evolving here. What is that?

We are still hot and heavy on mobile home parks. We intend to own and operate them for the foreseeable future. We’ll continue buying them. It came to my attention a few years ago. I interviewed a guy on my podcast that not only owned and operate it, but he was also the largest transactional broker in the niche. It was parking lots and parking garage basically. It was a very intriguing interview. It was one of those things, where you don’t only hear an idea or you talk to somebody and they give you a piece of knowledge that you didn’t know before. It never goes away. If someone tells you something the next day, you forget it within two minutes. This one thing sticks in the back of your head and it never goes away. That one thing gnawed at me for a good year and a half. We were never in the position to pivot or add an additional asset class into our business model. In 2019, we prepared for it and we started digging our heels in and learn as much as we could about that niche and that industry. I got our first couple of parking lots under contract now.

To us, there are a couple of intrinsic benefits that exist in that niche that were incredibly attractive to us. Number one, it is even more fragmented than mobile home parks were. Seventy percent of parking lot owners own one parking lot, lots of moms and pops. There isn’t anyone out there that has gone through and consolidated that niche. One of the other big ones is that 99% of the people that are in this space are on the operational side. They don’t own the actual lots. If you go park in a downtown area or wherever you might live or where I live, most of the time the individual running that parking lot is a management company. The management companies don’t own these lots for the most part.

There are a few that do but for the most part, they’re management companies and they don’t own the real estate. It was very bizarre to me so much that I went to the largest parking lot expo in Orlando, 20,000 attendees. This is huge. The expo hall was massive. There were 500 vendors there and not one of them had any outbound focus towards the owners of parking lots. It was all technology-driven. It was all geared towards operators, management companies creating a more efficient dynamic pricing model for parking lot operators, what have you. No one was talking about the ownership side of things. Out of this whole four-day event, there was one breakout session that was saying, “If you guys are out there operating these parking lots, why aren’t you getting options on these things? Why aren’t you buying these things? You should want to own the real estate.”

Here’s the beauty of the business model. There are a couple of different models that are in place, but the one that attracts us the most and the one that is the most prevalent is we buy a parking lot. We’re finding either local, regional or national operator that operates in that marketplace. They will sign a 5 or 10-year lease. They handle everything, all the day-to-day. Typically, there’s a 2% to 3% escalator in there on an annual basis. It truly becomes a passive investment from our perspective. The beautiful thing about this is being it’s allowing these moms and pops to own these parking lots, there are still a lot of the mom-and-pops that operate these things themselves.

I know you’ve seen what they call them honor boxes where you put your dollar through the slot and things like that or there’s a parking lot attendant in the summertime collecting the money. Half of the money is not making it to the owner. It’s like value add in multifamily and mobile home parks. That’s a value add in the parking lot niche. I’ll give you an example of a parking lot we have in the contract in North Carolina. It’s owned by my doctor for many years. He bought it for about $300,000. It’s at a signalized corner in downtown Wilmington. It’s a phenomenal market right on restaurant row. It doesn’t get any better.

It’s small like 20 to 24 spaces in total. His son was running it for many years. It’s based on his P&Ls. The most he ever made on an annual basis was $40,000 gross or something like that. I’m sure his son even took some of the money and use it as spending money. He then handed it off to a local mom and pop operator. There are also management companies that are very mom and pop-oriented. They don’t use technology that’s old school. They still have the same issues that the old owner does as far as operations. That operator made him about another $20,000 a year. He sold it for $695,000.

That’s what we have under contract to him. He’s now making $2,700 a month on a year to year lease. He didn’t want to sign a long-term lease. I took that to the biggest operator in that marketplace. They managed 30 parking lots there. They use technology and they can very quickly look at that. They can assess what they would be comfortable paying on an annual lease. Before we even tie up a lot, we got an LOI for $75,000 a year on a lease with 2.5% escalators because they’re going to come in. They’re going to put a digital payment system. They got enforcement. They’re going to find people when they go over their limit or don’t pay or what have you.

The upside there was more than double of what he’s currently being paid by introducing technology. I talked to that operator and he was supposed to tell me. I was like, “What do you guys think that you’re going to make? Anything above that $75,000, that’s your profit.” They’re expecting that lot to do anywhere between $105,000 and $120,000 of gross revenue a year. They’ve managed 600 parking spaces in that area. They can do a quick calculation. There are a lot of opportunities like that in the parking lot niche. For us, we don’t have to add any operational team to our business to add that to our portfolio. We can buy $20 million parking lots and we wouldn’t have to hire a person. I’m don’t have to hire another personal property management team. We don’t have to do anything. We just have to find an operator and sign a lease. It’s going to triple the net of CVS or Walgreens. It’s a beautiful thing.

If we do some quick math on that, you’re saying that the doctor is getting lease. It’s a 10 to 11 cap for you. He was getting about a 4 to 5 cap.

He’s ripping us off. He is a very smart guy. They get stuck in their ways, that no one can do it better than them or their current company that’s doing it. They don’t believe that people don’t carry cash anymore. I never have cash. I just have a card. I’ve been that way for years. I probably should have some cash just in case but I never do. I hate restaurants that I go into and it drives me crazy if they only accept cash because I want to pay with my card. They’re leading so much in the table right now and there’s a lot of other parking lots like that. There are other operators that might be running them that are mismanaging the heck out of them. We’re excited about it.

 

Assuming that’s in a central business district downtown area. This isn’t out in the middle of nowhere. This is in the core of a downtown market. As it sits as a parking lot, there was no lower use than what it currently is. Although we’re not speculators, we’re not going to buy for future development value, it will never be worthless as a parking lot now than what another use could be such as a high-rise office building, retail center, multifamily, what have you. This current lot got a height zoning up to 80 feet. You can go vertical with it. We’re not in that game. I don’t have an interest at this point.

We’re going to buy it and use it as a covered land play, make cashflow, very secure investment for our investors. Most of the time, it’s a double or triple net. It’s a very clean and easy deal to manage. Many years from now, if a developer wants to joint venture and go build something, and help us even more multiply our money, then we might be open to it. In the end-term, we’re going to own a piece of land in a core part of downtown. Unless you’re buying in a declining area like the wrong side of Detroit or something like that, then you should do well in the long-term because they’re not making any more land especially in downtown areas.

Are you financing the parking lots with private money? Are you looking for institutional debt as well to finance it?

How we’ve always done our business is we do it in a fund structure. We’ve closed our second fund, it was all mobile home parks. We’ve only bought mobile home parks up to this point. We are working on another offer which we’ll be going out here. We always do Reg D or 506(c)s. This offering will be a little bit different. It’ll be what we’re going to call as a hybrid offering. It’s going to have mobile home parks and parking lots. As far as the debt’s concerned, I could tell you what we’ve done in the mobile home park space depending on the deal. We’ve used A to Z debt, so Fannie and Freddie. We’ve got some CMBS loans and we’ve got some bank loans depending on the deal location size.

We keep very low leverage as far as the parking lots. Smaller lots like the one I gave an example, our intent based on how we’re buying it, we’re going to buy it all in cash. How we feel and knowing our investor base, the only thing that kills real estate is not a downturn, it’s not the lack of your rents coming in, it’s your debt. The debt is the only thing that could take a real estate investment down. If you get to the bare bones of it, if no one is paying and it can be your taxes then that could take it away as well. For the most part, debt is what upsets a real estate investment.

Our initial intent, we haven’t fully figured it out. For the most part, we intend unless it’s a huge asset $10-plus million. Our intent is to buy the parking lots all cash and not put any leverage on them and then put the normal type of leverage that we would on our mobile home parks. The blended two together should create a great deal of a low-risk investment for our investors and offer us a lot of flexibility in the future should we want to recapitalize or tackle on a line of credit. This gives us a lot of flexibility to run with. I don’t know the full answer to your question but that’s what our intent is.

That’s a full answer. You’ve got the Mobile Home Academy. Are you still teaching classes on that stuff?

It’s not so much. I still have a podcast, so I have a dedicated Mobile Home Park Podcast. I still do the show. There are over 100 episodes up there. I don’t do it as often as my main commercial real estate show. We’ve got busy a couple of years when we launched the Academy and we still sell. You have to dig for it. I don’t advertise it a bunch. I still help people on a monthly basis and we still have students. It became a little bit of a burden. It pulled us the opposite direction of what we needed to be going with our business. Maybe I did something wrong but I found it very difficult to run two full-fledged businesses, educational and also the investment side. I know other people have done it very successfully and I didn’t do it all that well. I didn’t feel them. I scaled back the educational side. You do both, so I should talk to you about how the heck you do it.

It’s like you, you’re busy. You’ve got to run systems and be dedicated. You know that. We’ve got enough friends in the space that do a good job and you learn. Sometimes you’ve got to put the educational side to focus on the deal flow because it gets hot. With what you’re doing in mobile homes, it totally makes sense because that is a hot market. It’s gotten even hotter in the last couple of years because of the big need for that. We see that here in Texas and in other areas. We see that from the different banking relationships that we have, whereas the mobile home class was a portfolio style loan with institution and stuff like that. Banks are looking for that stuff. They’re looking to add that because they see the value.

The first couple of parks we bought, it was either us having to buy it all cash, get a hard money loan, or you’re getting owner finance because it was beating your head against the wall to get a bank to understand that niche. I remember going through that struggle and now, the banks were throwing money at that asset class, which is interesting how the tides turn a little bit in a good way. It’s a beautiful thing.

With everything going on in the market these days, how are you using what you’ve learned in the past and seeing what’s going to happen? We’ve talked before and we won’t see a full-fledged 3 or 4-year recession. We’ll see 12, 18, maybe 24 months at the max. What are some of the things that you and your team look for more as opportunities in this market?

First and foremost, we’re making sure that our current portfolio makes it through these rough months or however long it might play out to be. I don’t want to call it damage control yet. I’m going to be optimistic and think that everything’s going to work itself. However, we got the plan in place and we’ve been strategizing behind that. We never want to get caught in a state of fear where you’re paralyzed and day-to-day you’re like, “This is going crazy.” Our team used this time to strategize this parking lot endeavor. You could say it’s not the right time and we have a million other things going because now we do with what’s going on in the world.

However, we know that this will pass as everything else. Out of this, there will be opportunities that will be paying, unfortunately. Everyone’s going to feel a little bit of pain some more than others. Businesses that were already somewhat on the unstable ground will get shaken up to the point where they might not be able to fully rebound. Surely, I don’t wish that on anyone. We know the old adage is, “You want to buy when there’s blood in the streets.” We’ll have a couple of drops of blood here and there, but we want to look for those opportunities to deploy capital responsibly and find things. We like buying below market value. We like buying great opportunities but I want to make sure that people understand this though.

I see Facebook feeds left and right. I’m a part of many different groups like you are. I see people for the past years have been keeping money on the sidelines, which I’m not going to say it’s a bad decision for them, but I’m of the mind that you can find great deals. If you know exactly what you’re looking for, you can find good opportunities in any market. You just have to look a little harder. You might not find the volume in the last years that you could have years ago. You’ve got to work hard. How I’ve always felt is that if you can get good at finding what it is you’re looking for and creating good, awesome deals and hard markets where there’s a lot of competition, then when things happen like we’re in right now, we’re experiencing, in theory, you should be able to crush it when things loosen up a little bit.

It weeds out some of that competition like the bottom competition that was already unstable and they were creating competition for competition’s sake. I’m optimistically excited about the coming months. I wish everyone the best health. I hope everyone can pull through this. Our economy and the people will bounce back. I’m looking forward to what opportunities might come out of it and we’ll be ready to roll. We’ll be ready to deploy capital and buy deals. Parking lots and mobile home parks, that’s what we’ll be looking for.

What’s the best way for our readers in Note Nation to tap into you, to follow up with you and to connect with you?

 

My website is KevinBupp.com. You can go there. You can listen to my main podcasts, Real Estate Investing For Cashflow. On that website, I’ve also got links to our company website, which is Sunrise Capital Investors. You can get to all the different things that I do from my main website, and then find me on Facebook or LinkedIn as well.

Take some advice from Kevin. If you’ve been through a downturn and gotten kicked in the teeth, you can recover. A lot of people went through rough times. Some people are going through rough times right now but don’t sit there and not keep moving forward and not taking action. There are opportunities in both markets. Instead of sitting there griping about there are no deals, why don’t you get out and market a little bit or change your marketing up a little bit and get things rocking and rolling? Kevin, thanks so much for coming on The Note Closers Show. I appreciate it. We’re going to have you on in the future and talk more about some of these different asset classes too.

Thanks for having me here. I need to get you back on my show as well. It’s been way too long.

Thanks so much for coming on, Kevin. Go out and take some action. We look forward to seeing you all at the top.

Important Links:

• Kevin Bupp
• Sunrise Capital Investor
• Mobile Home Academy
• Real Estate Investing For Cash Flow Podcast
• iTunes – Real Estate Investing for Cash Flow with Kevin Bupp
• Facebook – Kevin Bupp
• LinkedIn – Kevin Bupp
• www.KevinBupp.com

About Kevin Bupp

Kevin Bupp is the Founder & CEO of Sunrise Capital Investors, which invests in mobile home parks, parking lots, apartments, offices, and single family homes all across the US. He has 16 years of experience in educating investors to locate, acquire, and create “higher than average” returns from the widely misunderstood niche of mobile home park investing. He shares his expertise through the Mobile Home Academy and also as the host of The Real Estate Investing for Cashflow Podcast, which has become one of the hottest real estate podcasts on iTunes.

 

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