Seasoned investor Tyler Lekas breaks down the multifaceted world of mobile home park investing. Diving deep into the challenges, nuances, and key strategies of the trade, Tyler offers invaluable insights from his years of experience in the field. Whether you're a newbie or a seasoned pro, this discussion promises to shine a light on the pitfalls to avoid and the best practices to embrace.
Key Takeaways:
- Operational Complexities Can Make or Break Returns: Many investors underestimate the myriad of operational challenges in mobile home park investing. From utilities to park-owned homes, it's essential to understand the intricacies of each variable. A miscalculation or oversight can drastically impact ROI.
- Beware of Broker Assumptions: Not all brokers fully grasp the nuances of the mobile home park sector. As Tyler highlights, brokers may oversimplify challenges, like filling vacant pads. Investors need to perform thorough due diligence and avoid taking broker assumptions at face value.
- Insurance is Paramount: Tyler emphasizes the importance of being adequately insured, especially in an asset class as unique as mobile home parks. From ensuring park-owned homes to understanding the complexities of general liability, proper insurance can save investors from potential pitfalls and unexpected costs.
Tyler Lekas | Real Estate Background
- Co-Owner of MHCI Group
- Portfolio:
- Mobile home communities (752 pads, $30MM AUM)
- Based in: Little Rock, AR
- Say hi to him at:
- Best Ever Book: Extreme Ownership by Jocko Willink
- Greatest Lesson: Owning MHCs is way more in-depth than just "owning the dirt and collecting lot rent". Do your due diligence into the asset class before diving in, so you don't bite off more than you can chew.
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Transcript
Slocomb Reed:
Best ever listeners. Welcome to the best real estate investing advice ever show. Today's episode is brought to you by Presario Ventures, a private equity, real estate firm based in the booming Austin, Texas market to learn how you can invest in the future of Texas with Presario Ventures, visit info.presario ventures. That link is in the show notes.
I'm Slocomb Reed. Today we're joined by Tyler Lekas, who's joining us from Little Rock, Arkansas. He's a co-owner of the MHCI Group, which focuses on purchasing distressed mobile home communities in the Southeast. The owner operate, force appreciation, and then sell quickly or cash out refinance. Their current portfolio consists of mobile home communities counting up to 752 pads. That's approximately 30 million in assets under management. Tyler, can you tell us a little bit more about your background?
Tyler Lekas:
Hey, Slocomb. Thanks for having me on here. My background is I came from Wall Street and I managed a hybrid book of retail and institutional business at one of the big wirehouses. I got burnt out on that when I was on my way out the door. My dad actually sent me an article about mobile home parks. So what I did was I looked into mobile home parks and I started analyzing cash flow. I drove through a couple of them and I said, this looks like a really interesting asset class. So in 2017, I started owning and operating mobile home parks. And then in 2018, I actually moved to Florida and bought a park on my own down there. That was my first 55 space deal. And basically that's all she wrote. So that's a little bit of where I came from and how I got started.
Slocomb Reed:
Nice. We recently had Tyler's business partner, Jason Postill on the podcast. That's episode 3299. If you want the opportunity to hear what Tyler and Jason have been up to lately, then go to that episode and you can hear all about what's going on with MHCI today. The conversation Tyler and I are going to have in this episode is more focused around the mistakes they've made along the road the last several years and mistakes that they want our listeners to learn to avoid. Tyler, I understand you have a list of five mobile home park investing mistakes you want to cover. Where do you want to start?
Tyler Lekas:
Just five. I don't want to get too long winded for the listeners here because I could go probably a little too far down the rabbit hole. But here are five biggest mistakes to probably avoid if you're getting in the mobile home park space. Number one is park-owned homes. And if your listeners don't know what a park-owned home is, just imagine a rental. So it's the same thing as a single-family house or an apartment or a town home. So you basically own the mobile home as well as you own the dirt under the mobile home. So you're renting both pieces of real estate out. Again, mobile homes are not really considered real estate. They're considered personal property. But like I said, I won't go down the rabbit hole. So the banks out there, because mobile homes are personal property, they don't consider the income from park-owned homes, the actual home rental, not the lot rental, as part of the cap rate. So when you're underwriting a deal with a lot of park-owned homes, make sure to exclude that park-owned home income, because that's gonna completely change your valuation. Give you an example. Park-owned home, a rental's renting for $700 a month. The lot rent is 300.
So your home rent in that space is $400 a month. Well, if you've got, we'll say 10 pads, at $700 a month, that's $7,000 in income. Well, the problem with that is, is that the only income you can include is really the $300 in lot rent. So it's really $3,000 a month that the bank's actually gonna look at. That's gonna completely change the valuation, it's gonna completely change your cap rate, and it's gonna completely change the DSCR, the debt service coverage rate that the bank's gonna look at. So without getting too long winded again. That's probably our number one mistake.
Slocomb Reed:
I guess I have a comment and then a couple of questions here, Tyler. One of them is that it's, it's the mobile home itself that has actual plumbing and electrical fixtures and heating and cooling appliances. It's the home itself that breaks down over time and depreciates in value over time. I know a lot of mobile home park investors give that same advice and talk about that mistake.
You bring up an interesting point about how banks are looking at it for financing. So two questions here. I want to ask both of them at the same time and then just let you roll with it. The first is what are banks doing with that phantom income? In most cases, my understanding is if you're doing not just pad red, but also mobile home rent, more than 50% of your gross revenue as an operator is going to be coming from the homes themselves personal property, bank doesn't consider it. Is there any sort of borrow ability on that revenue on that income? The second question is in your experience, when you're selling and when you're buying, how much are prospective buyers discounting revenue and NOI profit coming from home rent as opposed to lot rent?
Tyler Lekas:
If the bank is not lending any credence to the POH rent, then the buyer isn't going to as well. I won't talk in hypotheticals. If we were buying a property, banks said we're not lending any credence to the cash flow coming off park owned homes and it's only lot rent. Guess what? We're not lending any credence to that either because we can't get any leverage on it. Most of our returns are going to be based off a levered return, especially in today's environment. We have to have that leverage to make our equity capital work.
So we don't lend any credence really off any of the park owned homes. And the reason for that is, is again, that income is not bankable. There could be other smarter investors out there that have probably bought more deals than us because they do lend credence to that and maybe they come up with more equity down because they say, look, there is some tangible value here to these park owned homes because you are getting real cash flow, you are getting real yield. Your first question was is there any liquidity in those homes? I think you said something like that. Is that what you said, Slocomb liquidity?
Slocomb Reed:
That's a better way to ask the question than I did. Tyler.
Tyler Lekas:
Really interesting. There's a bunch of shadow loan financing corporations out there. One of them, which we use called the 21st mortgage cash program. So if you have a pitched roof, late nineties home or 2000s or 2010s or whatever, the newer, the better those guys, if you have the title for the home don't get me started on titles for mobile homes because it's like the freaking Wild West out there. I can't tell you how many of our park on homes we bought that don't have titles, but we'll say assume you have the title, then what happens is those channel lenders out there will actually allow you to do a mini cash out refi based on the NADA value, the N-A-D-A value, that's like the Kelly blue book of mobile homes. And what they'll say is, if you have the title, send it to us, send us basically all four sides of the mobile home and then a bunch of interior photos. And then what we'll do is we'll put an NADA value on it and we'll put a note on that home and you guys will sign on the PG as the park owner and then we'll actually give you a cash out refi of that at 100 LTV. So if they think the home's worth 12,000, they'll actually check for 12,000. So there is some liquidity there for sure, but the logistics on actually getting that money and seeing a capitalized, not a capitalized return, but actual tangible yield the operational overhaul to get that done. You need a deep team, a very deep team to get the title for the park on home, take pictures, go through all the steps. Cause the channel lender doesn't just want pictures and a little application filled out that wants a lot more than that. So it's a good question though, but you need some breadth within your team and you need some operational expertise because you're not just going to collect that income month one. It's going to take you some time to kind of recapture that.
Slocomb Reed:
What's mistake number two.
Tyler Lekas:
Mistake number two is private utilities. And what I mean by that is it's not that you shouldn't go out and just not buy private utilities at all, but what you should do is the mistake really is, isn't doing a significant deep dive into what the private utilities are at your property, as well as taking a discount for those private utilities. If your market for sale pad in that particular market is 50,000 a pad.
Well, it should be 40,000 a pad if you're buying something with private utilities. Cause you've got higher expenses within those higher expenses. You've got an operator that has to come out and operate the private utilities. You got to do tests on your well or on your septic or on your package plan or on your lagoon. And you also have risks of those things blowing up on you. So if you have a septic tank, the earth stops going with you. Guess what happens? Your septic tank blows up and no longer leeches. Now you got to hook up to city sewer, city water.
So you got to have higher reserves, et cetera. So there's all these different things you got to go into with your eyes open. And a lot of the owners will just say, well, the park down the street sold for me for 50,000 a pad, but it was hooked up to city sewer. Well, who cares? My septic tanks had never had a problem. Well, guess what? A lot of these parks have been around for 50 years and that's the life of the septic system. So you got to go in with your eyes wide open. We've seen too many operators go out there and not do any due diligence on private utilities and they get crushed. So that would be mistake number two.
Do you want to hear three or do you have questions?
Slocomb Reed:
Gotcha. Yeah, go ahead.
Tyler Lekas:
So three is don't ever make the mistake of having a broker come in or reading a broker package and saying, all you got to do is fill 10 vacant lots. That's it. Hey, just go fill the lots. You're all good to go. Well, the problem is a lot of people don't realize if you're not in the business, the operational oversight of filling 10 vacant lots is. Unbelievably difficult because you've got a.
buy either new homes from the factory or used homes. You've got to get those homes on those paths and getting the homes on the paths, there's a ton of different logistical stuff. We've run into problems where the drivers of these homes can't actually make it in the park entrance because they're driving a highway truck versus a city truck and the highway truck physically can't make the turn. So they'll just drop the home in the street. We actually had that happen on one of our houses and we did not know that.
So the guy showed up, dropped in the middle of the street. We had to scramble around, we got fined by the city, clogged up traffic, anyways, it was a whole nightmare. So a lot of people don't understand the nuances and the logistics on trying to get homes on pads. It is not only extremely expensive, but the logistics on getting homes on pads, especially pads that haven't been used in a decade or two decades, is difficult. And then you gotta hook up the sewer, the water, the electric, the whole nine yards while you're there.
Most of the time the sewer lines are gone or they're corroded or they're clogged. So don't ever let a broker come out and sell you. All you got to do is fill up 10 vacant pads and you're out of nine cap. It's going to take a lot of money and a lot of time and a lot of capital. And either you have to be there or you're better be paying somebody really well to make sure they are putting those homes in the correct placement, the correct direction, so that they're not facing the wrong way. Trust me, we've had it all. We've had to move multiple houses into correct positions because I'm kind of
guy on the ground here and I wasn't there to make sure it was all on the right path. So don't ever get tricked by that. Any questions on that, Slocomb?
Slocomb Reed:
You know, I'm sensing a trend here and I want to see if that trend goes through mistakes four and five. So why don't you go ahead with them?
Tyler Lekas:
Mistake four that we would caution operators about is again, utility recapture. So utility recapture for us is a lot of people say, hey, utility bills for this particular property are $3,000 a month.
So all you gotta do is put a bunch of sub-meters on there and guess what will happen? You'll recapture 100% of your first month and everything will be hunky-dory. Well the problem is with a lot of those properties with high utility bills, it's not the residents, it's old water lines. And a lot of people don't realize this either. They think, oh you can hire a company like American Leak Detection. Well American Leak Detection, when they come out, they want a whole bunch of check boxes on the property. They want shut-off valves. Well guess what? If you're buying a lot of these old trailers,
Shutoff valve was destroyed eons ago. So you've got to install all shutoff valves before you close on the property. Because to find the leaks pre-closed, like before you're actually buying the asset, you've got to install shutoff valves on somebody else's property. So that costs extra due diligence, extra time, it's extra risk to you. As well as once you find the leaks or lack thereof, then if you go out and actually build these units back, you have meters break, you have issues with.
internet connectivity on most of these properties because they're in bad areas, etc. So you've got all these issues with sub-meter in a property. It's not just like your plug and play. So we always recommend, if you can, get a city that already has city meters in front of these homes or work with the city to actually install their own sub-meters. It'll save you an unbelievable amount of operational oversight, as well as money in the future, because the city will be taking on those expenses, the leaks and everything else, and not yourself.
So that's mistake number four. Anything on that? Slow Tyler. I recently released an episode of this podcast called why I love dumpsters. And I could very easily pontificate for 15 minutes on why I love shutoff valves. I'm an apartments guy and I'm based in Cincinnati, Ohio. And some of the stuff that I own, some of the stuff that I managed was built just after the civil war.
So, uh, doesn't have original plumbing because there was no indoor plumbing when they were built. And so a lot of it's just Jimmy rigged pipes up every which wall that they could because it was after the fact plumbing installation. And some of that after the fact plumbing installation is many decades old. So I can't tell you how much I love not only a good shutoff valve, but 10 good shutoff valves in a basement just to make sure I know I can isolate everything. Yeah. Well said. You don't know until you know.
Paul Mueller (15:18.806)
The operational piece of this business is what either makes or breaks. Yeah. I'll tell you what. So I hear you. It's painful. Let's go with mistake number five. And mistake number five is being underinsured. We hate writing insurance checks every year. We rarely use them, but I'll give you a real life example. We had a house burn at one of our properties just recently. And to replace that house is probably going to cost us about $70,000. And I never got the insurance on the house completely on me. And now we have basically have an asset that's doing nothing and producing no cashflow.
So getting insurance, whether that's general liability and all the insurance on your park owned homes, because unless you're Blackstone or your last name is Gates, you're going to be buying parks that are turnarounds and buying parks that are turnarounds means you're going to be buying park owned homes. That's just the facts of the matter. Ensure every single one of your park owned homes and make sure that insurance is qualified and in place throughout every single year that you have it, because the amount of effort and energy just going back to mistake number three, to replace that existing home, if it burns, is going to cost you so much money and not only time, but also capital. So being insured, we've seen too many operators, especially mom and pops, that never had insurance on their property. And general liability as well. And the general liability of not even need to go into that. If you don't understand general liability, you got to take a one-on-one real estate crash course. But insuring your park owned homes, you got to get that done because it has cost us tons of money for not doing that. So I would say that's the five biggest mistakes.
Slocomb Reed:
Thank you. I want to run through all five again through my notes and my trend, my theme only ran through the first four. So let's talk about this one. Being underinsured. How often do you see insurance brokers make proposals for insurance for your acquisitions that you believe to be under insuring the property? If I could give an example. I've already referenced the very old housing stock in Cincinnati that I manage. So what we often find is the difference between, I'm not an insurance broker and I'm about to prove that the difference between market value and replacement costs is often quite drastic. And I see insurance brokers propose coverages that will operate as replacement costs, meaning that money will not actually be dispersed to.
The insurance holder, it will be dispersed to contractors to repair or rebuild. And the insurance company will require that it would be rebuilt as it was previously. It could be architect like structural brick construction. Anyways, I often see insurance brokers here not place enough of an emphasis on the reconstruction cost of a property that would be more expensive on today's terms to build and then not add sufficient income replacement in the event that there actually was something devastating to happen on site. Are you seeing things like that happen in the mobile home park space or is it that insurance brokers are proposing the right amount of insurance and investors are trying to tick up the NOI a bit by ticking down their insurance costs?
Tyler Lekas:
Really good question. So the apartment space is going to be a little bit different than our space. If you've talked to an operator with 10,000 units, he's probably seen a whole bunch more than us. But my narrow focus has been basically we get to dictate the value of whatever we think the replacement cost is going to be for our units. So if we can get insurance in place for our units, it costs us about 500 bucks a year to insure a $40,000 home. So if we got a home sitting there and we'll say it was a 1990 three bedroom, two bath champion.
Well, that 1990, it ain't worth 40 grand. However, we can go and insure that home for 40,000 because we know to actually bring in a new home is going to cost us 40,000 and that costs us about 500 bucks a year. So what we found is the insurance companies are pretty lenient on when we come in and we actually do our valuations on the park owned homes that we currently have in inventory. They say whatever value you want, we'll just charge you for it.
If we said 70,000, I'm guessing it'd probably be 800 bucks a year. I'm making it up. Most of our homes are, we think we're worth about 40. However, the general liability, it's almost impossible with the assets that we currently hold to get loss of income insurance. So if a tornado hits one of our mobile homes, and I think you've seen a tornado hit a mobile home park, ain't nothing left. So if a tornado hits one of our mobile home parks, we're toast. Unless we have a bunch of park owned homes in there.
We can't get loss of income insurance at all. So it's weird how specifically in the state of Arkansas, a lot of those insurers have actually pulled out in the last 12 to 18 months. Thirdly, on the GL side, we've just started to get umbrella policies due to investors actually wanting more insurance coverage due to outside toxic risks. We've got a family office that we work with just had a big problem with a carbon monoxide and some other stuff. So they want us to now start putting more umbrella coverage on our mobile home parks and again, two different asset classes. And again, I'm just talking about our business personally, not everybody's business. But again, those are three points that I have there. Loss of business, insuring park owned homes, and then the general liability. We're getting umbrella policies at least on half of our parks now because of this family office we work with. So that's the nuances there, but I totally understand where you're coming from.
Because to get a replacement value of a building these days with all the inflation we've had, I can't imagine how difficult that is. I cannot imagine. And I can't imagine the cost either. So Slocum, what about the insurance that you're seeing in your space? Has it doubled or tripled in the last year? Because I've seen insurance rates just go sky high.
Slocomb Reed:
Yeah, you invest in the Southeast and I'm sure that plays a factor in it. I'm not entirely sure where in the Southeast that has...Across the multifamily space, Florida, of course, has been the hardest hit coastal areas much more significantly than Cincinnati, Ohio. Shout out to the boring Midwest. Our average property insurance increase annually right now is 15%. So not nearly as crazy as the increases that you're seeing in areas that are at higher risk of natural disaster. We still don't like it of course, but we're not being hit nearly as hard. In fact, in a place like Cincinnati, the increase in insurance premiums is that about the same rate, the same percentage as the increases in rents that we're seeing. So frankly, we're just not feeling it all that much here. That's amazing. Combination of several factors. The average elevation here makes it such that we don't have to be as concerned with climate change. We're far away from hurricanes, earthquakes, other issues.
Do get those tornadoes you referenced though. So going back through mistakes one through four, which I'll reiterate in a moment, the theme that I'm seeing here, let's pretend that I'm taking your place Tyler and trying to summarize your points for you. And then you can tell me.
You never want to be underinsured. That should remain plain and simple. The first four points come down to unforeseen operational complexities that lead to requiring a lot more of your time, your effort and expense, taking your due diligence very seriously upfront and making sure that these are things that you can recognize in an opportunity before you buy it or before you go under contract to buy it is critically important and these are the things that bring the most operational complexity to a mobile home park deal. They're the biggest differentiators between investing in the land that people are renting to put a mobile home park on and operating a space filled with utilities and personal property that depreciates in value over time and is expensive to own, insure, borrow against, etc. Those four things are having park owned homes, operating with private utilities instead of public utilities, out of order, but assuming that a utility recapture is going to go smoothly, especially if you have older infrastructure, and then accepting brokers operational assumptions when those brokers are not also mobile home park operators. Is that a fair way to summarize those four points?
Tyler Lekas:
So the brokers thing, just wanted to add something to that real quick. The broker's assumptions, that is true as well. Assuming broker's assumptions. We work with a lot of great brokers, just want to throw that out there, but they're not the best at underwriting deals. They don't understand the nuance. So I completely agree with you there, but more of filling in vacant pads with new homes, so if you've got a hundred space park and they say you got 10 vacant pads there to fill those vacant pads with homes.
is exceptionally difficult. It's one of the toughest turnarounds you're ever going to do. Everything else you nail. I wanted to hone in on that because a lot of people say there's opportunity. I've seen so many packages out there, there's opportunity within fill and within fill it'll be a nine cap or a 10 cap or a 15 cap. The problem is the broker number underwrites the operational costs it takes to actually get a home on a pad. And the amount of expertise and everything that goes into it, it's a nightmare. So brokers assumptions, I agree with you a hundred percent, but I went just a little deeper there because you see a lot of opportunities out there. Hey, fill 50 vacant pads and your park will be, you know, like I said, whatever, 15 cap, but it's just not that simple. So I just want to bring the nuance of that back in. Cause again, a lot of first time operators will probably see those deals out there and think, that can't be that hard.
Slocomb Reed:
Setting aside the first time mobile home park investors, speaking to investors with experience. Tyler, I feel like I'm asking about the market of the moment. The moment, by the way, is the beginning of Q4, 2023, but typically within all investing, real estate operated as a business or investing in a business, operational complexity should lead to opportunity for higher returns. You should be able to buy at a steeper discount based on the NOI that you can produce because that NOI is more complicated to get to. It requires more expertise, savvy, time, human resource, what have you. Your mistakes surround creating false assumptions around operational complexity and recognizing how difficult it's going to be to execute on business plans that include those variables. Are you seeing though in the market right now, opportunities to buy at a steeper discount that are discounts steep enough that if you convert on these kinds of things, it will actually lead to higher returns than if you buy the cut and dry copy paste operationally mobile home parks.
Tyler Lekas:
If you're going to brokers, you absolutely will not. Everything will be at market rate or higher. Regardless of these operational variables. Yeah, they don't care. Yeah, they're going to make you buy it at face value. And we'll just say hypothetically, they do give a discount. The discount's not steep enough for you to make up the yield that you're going to have to put in and the time you're going to have to put in to turn these things around. Everything we do is direct to seller. We send out postcards, we got cold callers, et cetera. So we find off market deals. So I'll give you one example. And again, we bought 122 space property. It was all direct billed utilities. So we didn't have to do anything with utilities and it was all tenant owned homes the operational issues that we had going into that deal was it was 30% delinquent. And probably 90% of that 30% was more than six months and they hadn't been evicted yet. So super mom and pop owner. And it was in a town of 5,000 people. So super small Metro. And we always look for Metro's over 50,000 because you can't fill vacancies if you got a town of 5,000, just doesn't make any sense.
So those were our two hurdles going into it. So we got this property at a significantly steep discount with a great seller care. We bought it for 2 million and we got a $500,000 seller second behind that with a 4% I.O. We had that for 10 years. So really good seller financing in there as well as really good price per pad. So that was a really cookie cutter deal but we took risk on the place and we took risk on the delinquencies.
So those are the two places we took risks. And that was a direct to owner. We went to the trust that was held in the trust and we went direct to the owner. But I don't think you're gonna find that deal on the open market. And I don't think you're gonna find that deal without going direct to the seller. Because if a broker had got ahold of that, probably would have sold for four or four and a half million pretty easily on the open market. So just to get back to your original point, yes, you can find those deals out there and you can find the discounts for those deals.
But if you're just trying to look on Loopnet and Crexie, you're never gonna find them. They're never gonna pop up.
Slocomb Reed:
We need to transition the podcast, but if you want to find mobile home community deals with a significant discount due to operational complexity, you have to take on the operational complexity of how you're gonna work with us.
Tyler Lekas:
Amen, brother. Amen, exactly. Exactly, yeah.
Slocomb Reed:
On that note, Tyler, are you ready for the best ever lightning round?
Tyler Lekas:
Yes, sir.
Slocomb Reed:
What is the best ever book you recently read?
Tyler Lekas:
Extreme Ownership by Jocko Willink.
Slocomb Reed:
I love that book, especially if you get the audible audiobook version because it's narrated by Jocko Willink and Leif Babin. It's a much more intense experience listening to that book. And I'll say there are very few books that I will reread or re-listen to, but that's absolutely one of them. And a big part of it is the narration by Jocko Willink and Leif Babin. What is your best ever way to give back?
Tyler Lekas:
I'm a little different. I usually pick individuals. So I'll pick a individual that comes into my sphere of influence. I don't really like big nonprofits. I don't give to the Red Cross or anything like that. But what I usually do is I try and help one individual on a yearly or bi-yearly basis, whether that's some of these behind other bills or whatever, but that's my best way to give back is picking individuals that are trying to get out and get ahead and I know them and they're going through a tough spot, involved in there. And that's the way I like to do it.
Slocomb Reed:
Interesting question to ask here Tyler and I'll say you can answer it on theme with the top five lists that you just shared. On the deals you have done Tyler, what is the biggest mistake you all have made and the best-ever lesson that resulted from it?
Tyler Lekas:
We bought a 33 space park all park owned homes We convert park owned homes to rent to own homes It offloads a lot of the repairs and maintenance from our staff as well as it makes them homeowners. So it drives a deal and does some other good things for our operations. But we were a little bit green to the business and we gave everybody a notice basically saying, get out or convert. And that doesn't go over to all of people. So we ended up having over a 50% vacancy in the first two months of us owning the property. We thought everybody would want to buy. That was not the correct assumption. And the only thing that saved us was the price. We bought that 33 space for 675,000 and that's the only way we made the debt service that would have taken us down if we wouldn't have bought it at such a good price. And that was probably the biggest mistake we've ever made. That was pretty scary times. I was on site every day.
Slocomb Reed:
Can you summarize the lesson learned there?
Tyler Lekas:
Lesson learned is when you go buy majority park owned home mobile home parks, buy at a discount and don't try and convert the renters too fast, because you will have vacancy.
Slocomb Reed:
And what is your best ever advice?
Tyler Lekas:
Start buying mobile home parks today. They're the best asset class in commercial real estate right now. Best risk adjusted returns.
Slocomb Reed:
Tyler last question. Where can our listeners get in touch with you?
Tyler Lekas:
You can email me at Tyler@mhcigroup.com, or you can look me up on LinkedIn. I don't have Facebook or Instagram or anything like that. Kind of an old fart in that sense, but you can look me up on LinkedIn or email me at tyler@mchigroup.com.
Slocomb Reed:
Those links are in the show notes.
Tyler, thank you. Best Ever listeners, thank you as well for tuning in. If you've gained value from this episode, the top five mistakes to avoid in mobile home park investing, please do subscribe to our show. Leave us a five star review and share this episode with a friend you know we can add value to through our conversation today. Thank you and have a Best Ever day.
